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Boeing shares that view with McDonnell Douglas, which has assembled 35 MD-80 jetliners at a Shanghai plant that it has run with Chinese partners since 1985. (China purchased 30 of the planes, and TWA bought the remaining five.) Nor does McDonnell Douglas fret about losing its technical edge. "We're developing a partner," says Peter Chapman, who heads the company's China operations. "The more technology we can transfer to them to help supply us, the better."
Caterpillar, which has been embroiled in a United Auto Workers strike since June, will hire 1,000 workers in China in the next few years to build engines and excavators there. That infuriates Jerry Brown, who heads the U.A.W. local in East Peoria, Illinois. Says he: "They're selling the quality and technology that we helped build over the years. We're being forced to suffer from our own success."
But Caterpillar vice president Siegfried Ramseyer argues that American workers will come out ahead in the end: by launching joint ventures in China, the company will create a larger market for, say, Caterpillar's 240-ton truck, which is currently made in Decatur, Illinois. This, he says, is a long- standing strategy. "Wherever in the world we went to manufacture, we exported more from America."
For many experts, the debate over who wins and loses as U.S. companies build factories abroad misses the point. The shift of expertise and capital, they contend, is inevitable. "The underlying skills in China are so great that any American company that transfers technology will create rivals," says Roy ( Grow, a political scientist at Carleton College in Northfield, Minnesota. The solution, Grow adds, is for American firms to develop new know-how faster than they can give away their skills.