Ford's China conundrum: Big profits, bribery allegations
Ford assembly line manager Liu Chan stands in front of the final stage of assembly at Ford's sprawling assembly plant in the Southwestern city of Chongqing. Most of the nearly million vehicles Ford sold in China last year were made here. Workers interviewed by Marketplace say competition for jobs at the plant is so fierce that some aspiring workers pay bribes to Ford's local HR department to secure positions. Ford has launched an internal investigation as a result of the allegations.
At the end of Ford’s assembly line in Chongqing, Plant Manager Greg Brown is counting cars. “If we stand here an hour, we should count 63 cars going by here,” Brown says, peering at a digital sign above us displaying the number of cars that have come off the line already today. “We’re scheduled to build 1,281 vehicles today.”
Ford sold its first passenger car in China in 2003. Last year, it sold close to a million.
Most of them are assembled here in the Southwestern Chinese metropolis of Chongqing, Ford’s largest manufacturing hub outside Michigan. It’s a joint venture with Chinese automaker Chang’an. “In Chongqing, we’re in a fantastic spot, because the growing auto market is out here in the middle and in the West,” says Scott Chang, spokesman for Ford. “So being in Chongqing gives us a great advantage.”
Another advantage is a near endless supply of cheap labor. The Chongqing region is home to low wages, and tens of millions of farmers eager to make more money at a factory close to home. The twenty-first century autoworker is someone like Liu Chan. He's a short, thin assembly line manager wearing a navy blue work suit emblazoned with the joint venture’s official name Chang’an Ford. “I work at the final stage of the assembly line, making adjustments to vehicles coming off the line,” says Liu inside the plant’s break room.
Liu says he works eight hours a day, with few chances for overtime. He has two kids, he owns a Ford Focus, and his wife works here, too. Ford has handpicked Liu to speak with me, and managers won’t let him discuss salary, overtime rates, no numbers.
“But this is Marketplace,” I say to his managers, “we do the numbers.”
Nope, says Ford – those numbers are secret.
So after my day at Ford is through, I return to the factory gates without the looming presence of Ford management, where other workers help me do the numbers.
“My base salary is higher than average - a little over 1,800 yuan a month,” says a worker named Xu.
His salary is equal to $1.80 an hour. Xu works on the assembly line at the plant. He shows me his Ford ID badge, but he asks that his full name not be used. Xu says with overtime and bonuses, he makes around $10,000 (U.S.) a year – enough to buy a modest apartment nearby for his wife, child and his wife’s parents.
He says he feels lucky to have this job. “The workload is very demanding, hours are long, and it’s very tiring,” says Xu, “But my salary is very high compared to work at any other factory around here.”
Xu says getting a job at Ford is so competitive that some people resort to bribing employees in Ford’s HR department just to secure a position at the plant. “It’s pretty common for the most coveted jobs at the company like the quality control department,” says Xu. “They usually have to pay between 3,000 to 5,000 yuan," which works out to be $500-900. “If you’re a woman, it’ll cost you more than double that.”
Xu says that’s because women are generally looking for less labor-intensive but highly coveted administrative roles. Xu says paying for positions at Ford was common a few years ago, but lately it’s less so because of the increasing amount of overtime required to keep up with demand. “I know one person who paid 5,000 yuan to get a job here,” says Xu, “But then he was assigned to work in the welding workshop – a really tough job. He wanted to quit, but he had to stick around to earn back the bribe he had paid.”
Xu says Ford management has made it clear to employees that bribery is illegal and if they knew about this, they’d put a stop to it. But Xu says this would be challenging for the foreign automaker. “There’s a Chinese saying: There are rules that come from above and there are solutions down here on the ground,” Xu says with a laugh.
Ford may not be alone: Marketplace discovered online posts in China by middlemen and job seekers indicating coveted jobs were for sale inside other foreign automakers like Volkswagen and General Motors. Another Ford worker, named Wang – who also didn’t want to give his full name – says he too knows people at Ford who paid bribes for their jobs. He says the problem doesn’t emanate from Ford, but from China. “You might not do this sort of thing in the US, but here in China, bribing someone to get something you want is completely normal and inevitable,” says Wang with a shrug.
Not all the Ford workers Marketplace spoke to in Chongqing talked about others who had paid for positions at the plant. Several assembly line workers said they had never heard of such a thing.
In a written statement to Marketplace, Ford said: “We take these allegations very seriously and have initiated an investigation. Any behavior that violates our policies, such as the alleged behavior, would result in immediate dismissal.”
James McGregor, head of the China region for APCO Worldwide and author of “One Billion Customers: Lessons from the front lines of doing business in China,” says it usually takes foreign companies years to get used to the scale of corruption in China. “Everything you do, every transaction, every deal, every move, every permit, there’s just so many interfaces with the government,” says McGregor.
And at every step, he says, somebody’s taking money. “So when you get into the private companies, that culture that will infect it.”
McGregor’s advice for foreign companies who find this sort of corruption inside their China operation? Don’t be soft.
“You should fire people and you should do it very publicly, and you should turn them over to police authorities,” says McGregor. “Unfortunately what happens in foreign companies a lot is they’ll investigate corruption, and then they’ll quietly pay the people off to go away and inflict some other company because they don’t want the embarrassment.”
Another challenge for companies like Ford is they’re required by Chinese law to partner with a Chinese company. Ford’s Chongqing plant is a 50/50 joint venture with Chang’an, one of China’s big four automakers. Often, Chinese partners bring their own corporate culture to the mix – which can include practices like taking bribes.
Ford employee Xu says many of his colleagues at Chongqing’s Ford plant came from one of the plants owned by the Chinese partner – he says the benefits and pay at Ford are much better. And Xu says lucky for him, he didn’t have to pay to get a job he liked.
Data compiled by Stella Xie.