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Incoming Asian companies to boost Detroit’s Economy – Is Detroit Ready?

Incoming Asian companies to boost Detroit’s Economy – Is Detroit Ready?

[Detroit=The Michigan Korean Weekly] Aaron Foley = The momentum around Detroit’s slow-but-steady comeback has attracted throngs of new residents to the city’s downtown core and reinvestment from several firms. But while big real estate deals and large-scale moves grab headlines, smaller business owners are still taking a wait-and-see approach, particularly minority-owned firms.

Across Metro Detroit, suppliers, logistics firms, engineering offices, medical companies and other businesses are weighing their options. Hedge their bets in the suburbs or ride the waves in Detroit?

Yong Joo Lee is president of automotive supplier Kwang Jin, which counts General Motors and Chrysler as two of its biggest clients. The company’s rapid expansion and dealings in both the Americas and Lee’s home in Korea prompted the company to consider growing in Detroit.

But while headquartered in Sterling Heights, Kwang Jin eventually settled on a building in Warren for several reasons and will expand there next year, Lee says. For one, while downtown Detroit is on an upswing, the company was hesitant about other areas. And downtown Detroit doesn’t have the type of facilities – a widespread, up-to-date warehouse-type with thousands of square footage, for example – that would meet the company’s needs.

Another reason? Safety, Lee says. “One of the things we asked our employees was about security if we went downtown, and how many police officers are in the city of Detroit before and after the bankruptcy. It sounds like people don’t think downtown has enough resources for businesses that need security.”

Detroit’s tax on employees who commute out of the city hurts employees, too. “If they are not living in Detroit, they have to pay city tax. That’s one of the concerns of people. I don’t know why a metropolitan city does that,” Lee says.

President Yong Lee
Yong Joo Lee, President of Kwang Jin America

Kwang Jin makes an effort to hire within the city, often through agencies, but many of those employees end up moving to the suburbs anyway, Lee says. “Many of the Chaldeans are going to Warren,” he notes.

Macomb County saw the highest gain in Asian-American and Pacific Islander population since 2000, rising 48.3% and nearly tying with Washtenaw County with an overall population of 25,242 residents, according to the 2010 census. Oakland County is the most densely populated, with nearly 70,000 Asian-American and Pacific Islander residents.

But, Lee adds, “When we hire, it doesn’t matter where they live. It’s mostly about their skills.”

For Grace Lee, chief financial officer and a co-founder of developer Logic Solutions, hiring is often tied to proximity to her firm’s Ann Arbor location. Most of the talent is drawn from the University of Michigan.

Because the university has consistently drawn Asian students, many have put down roots in the Ann Arbor area over the last few decades – something Detroit lacks, Lee says.

“Asian markets, Asian restaurants – they don’t have it (in downtown Detroit),” Lee says. “It becomes a chicken-egg thing.”

International recruits tend to feel more comfortable in areas where “it feels like home,” Lee says. “We like to be around the culture that we know.”

Like Yong Joo Lee, Grace Lee agrees that Detroit’s comeback is partially reliant on creating communities that are welcoming to all. “It’s going to grow naturally,” she says, noting the city’s past efforts to create a Chinatown or Asian Village didn’t take off as expected.

There are success stories in the city – though they come with some compromise.

When looking to set up shop for MQRG, an automotive retrofitter, Ehsan Taqbeem and his business partner wanted nowhere else but Detroit. They have office space just a stone’s throw from a Chrysler plant in eastside Detroit, a few miles from downtown.

But while business has been good, Taquim says there have been challenges with city services – and services offered in the city. When they first opened, it took months for DTE Energy to set up service. MQRG also doesn’t have running water in its office, because the Detroit Water and Sewerage Department, for reasons unknown, has yet to show up.

“Don’t let anybody fool you, Detroit still has a lot of challenges,” Taqbeem says. “We still don’t have internet service because AT&T and Verizon don’t run a cable here.”

Customer service is another issue. “It’s not there,” he says, saying it can be a turn-off.

“I think it’s improving, but we’d like to see more. You hear all the buzz that Detroit is becoming a hot spot, but you wish they’d offer more services,” Taqbeem adds.

Peter Wong, president of automotive supplier Roy Smith Company, also does business on the eastside of Detroit near the Highland Park border. As a tie to the automotive industry, Wong says it’s important for such companies to be committed to the Motor City.

“My personal opinion is that Asian companies or not, a company evaluates the benefits and risks of locating their operation in any city based on the potential return to their investors. So we may say that we cater to certain industries or certain countries, but ultimately, we have to cater to the business acumen of the company’s investors and management,” he says.

While not having the same issues with utilities as Taquim, Wong says he hopes Detroit Mayor Mike Duggan and the city council continue to emphasize safety and security for all who do business in the city limits, as well as eliminating bureaucracy and fixing other issues – like roads, for example.

“Like every major city, we have areas of benefits and areas where improvements can be made. Detroit has evolved and reinvented itself many times as our population, our industries and our economy change,” Wong says.

Despite Detroit’s numerous challenges, solidarity is the key to success.

Wong adds, “one of the main areas to focus on is to work together, regardless of class, race, religion, age, wealth, to tighten our belts together where needed, to look at the long-term benefits even though there may be short-term inconvenience – so that all of us in the area will leave the city in a continuously better position for our next generation.”

 

About this series Five minority media outlets with a combined estimated circulation of 120,000 weekly–Latino Press, The Michigan Citizen, The Jewish News, The Michigan Korean Weekly, The Arab American News—are part of New Michigan Media and are taking part in The Detroit Journalism Cooperative (DJC). Funded by the John S. and James L. Knight Foundation, Renaissance Journalism’s Michigan Reporting Initiative and the Ford Foundation, the DJC aims to report about and create community engagement opportunities pertaining to the Detroit bankruptcy and recovery. Each article in the series appears in all the NMM member newspapers. This article is from THE MICHIGAN KOREAN WEEKLY. The DJC is a unique collaboration between important media outlets of the region, and includes The Center for Michigan’s Bridge Magazine, Detroit Public Television, Michigan Public Radio, WDET and New Michigan Media. The Detroit Free Press is also participating in the DJC effort.

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