Chinese outsourcing debate: 'State-of-the-art jobs creating facility' or small sales office? You decide.
A little-known electronics company called Discera Inc. became a topic of debate in Michigan's gubernatorial campaign Sunday night when Democratic candidate Virg Bernero said the startup was an example of how Republican candidate Rick Snyder is not committed to creating jobs in Michigan.
Bernero called Discera's new Chinese office a "state-of-the-art jobs creating facility" and said it showed that Snyder, whose Ann Arbor venture capital firm Ardesta co-founded Discera, should be known as "chief executive outsourcer." Discera's R&D base is located in Ann Arbor, where the firm employs six workers.
Today, Snyder's campaign posted a Facebook photo of Discera's 300-square-foot office in an effort to debunk Bernero's claims. (The campaign later opted to withdraw the photo from Facebook in favor of posting it, instead, to the campaign's TruthForMichigan.com site, which was launched to address attacks on Snyder's record.)
This photo shows Discera's 300-square-foot office in China, where the company employs five workers.
Photo courtesy of Snyder campaign
Bernero's campaign says the answer is yes.
“This goes far beyond outsourcing,” Bernero said in a statement released today by his campaign. “It’s not just the overseas jobs created. Rather than investing in Michigan, Mr. Snyder is making money helping Chinese companies gain a competitive edge against us. Who’s (sic) side is Rick Snyder on?”
Snyder's campaign, on Facebook, downplayed the significance of Discera's 5-person Chinese office.
"The 'operations' are so expansive that the refrigerator, water cooler and fax/copier are housed in the same room as the three sales people and technician," the Snyder campaign posted. "The sales people sell the American products to Chinese people. From a customer service standpoint, it helps to have people who speak the language."
Discera was the source of a surprise debate attack Sunday night by Bernero, who told reporters after the debate that he considered Snyder's involvement with Discera "troubling."
Bernero pointed to a July 19 press release in which Discera chief technology officer Wan-Thai Hsu said the new Chinese office would allow Discera to help "Chinese businesses compete and win in the global marketplace."
"I just felt I had to lead with that," Bernero told reporters. "And I thought he should have chance to answer for it. He’s got to answer for it. He owes the people of Michigan an explanation at a time when people are hurting like they are."
Snyder's campaign countered, before the hour-long debate was even over, by releasing a statement from Discera CEO Bruce Diamond about the company's Chinese operation. Diamond said Discera had recently opened a 300-square-foot “sales and applications office” in Shenzhen, China with three sales employees, one “field applications engineer” and an administrative assistant.
Snyder today is taking heat for saying during the debate that "Discera does not have an operation in China." After the debate's conclusion, he acknowledged Discera's Chinese operation but downplayed its significance.
"That’s a case where the mayor had trouble understanding the difference between research-and-development and sales," Snyder told reporters. "Literally it’s a small office with a card table in it to sell to the Chinese. Our research, as I said during the debate, is based in Ann Arbor, Michigan. We should be proud of that."
Snyder campaign spokesman Bill Nowling told AnnArbor.com in an e-mail today that Snyder was "unaware that the sales office had opened," but he defended Snyder's comments during the debate.
"It’s a sales office, to sell U.S. products and services in China. Bernero was making the allegation that Discera was moving operations there at the expense of here. This is not the case," Nowling said. "That is how Rick understood the allegation and his comments are correct."
The Detroit Free Press reported today that Discera has 32 employees in the U.S. -- 26 in San Jose and six at its R&D headquarters in Ann Arbor.
The China office "represents pure growth for the company," Diamond said. "At no point now or in the future do I believe this eliminates any jobs here in the U.S., nor did we 'ship' (jobs) out of the U.S. to open this office. In fact it is the opposite, the increased sales will eventually create more R&D jobs here in the U.S."
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
djm12652
Wed, Oct 13, 2010 : 2:26 p.m.
@Sam...the Unions are always creating jobs for their cronies..in the union offices! and yeah with the dues paid by union members that already are working. Unions are a parasite in today's job market.
Veracity
Wed, Oct 13, 2010 : 12:23 a.m.
Please pay particular attention to the third and fifth paragraphs from Discera's own press release: News & Press Releases Discera Establishes State-of-the-Art China Applications Center in Shenzhen 19-Jul-2010 China's Electronics Manufacturers Reduce Development and Product Lead Times with New MEMS Technology SHENZHEN, China - Discera, Inc., the premier provider of CMOS semiconductor-based oscillator technology, announced the official opening of its China Applications Center in the Shenzhen International Chamber of Commerce Tower on Fuhua 3rd Road, Futian District. As the heart of the companys permanent investment plan in China, the new office features engineers, equipment, and researchers to support sophisticated chip and module integration, high definition and 3D video technology, and radio frequency and smart grid design. By centralizing multiple locations into a single facility less than 1.5 km from the Jiuce Science & Technology Park and 0.5 km from the Shenzhen Golf Club, Discera has achieved a balance between the needs of research & development, customers, and business partners throughout the region. Chief Technology Officer Dr. Wan-Thai Hsu and Vice President of Worldwide Sales Dr. Kent Chon hosted the opening of the Discera, Inc. China Applications Center. By sharing our expertise in semiconductor timing, power reduction, and MEMS technology and sponsoring local research and development, Discera is helping Chinese businesses compete and win in the global marketplace, said Dr. Hsu. Discera leads with service and wins with reliability. Our newest facility will dramatically reduce both development and production lead times for customers accustomed to older technologies, said Dr. Chon. Discera builds micro-electrical mechanical systems (MEMS) that use standard silicon processes to provide the heartbeat necessary for nearly all electronics devices. The companys technology delivers a smaller, more reliable, and lower power alternative to traditional quartz technology. Chinese companies work with these technologies under both the Discera name and under license to some of the worlds largest component manufacturers and ODMs which offer the technology as standalone components, integrated chipsets, and specialty modules. The new China Applications Center serves Direct, Distribution, ODM, and OEM customers as well as local universities, joint venture, and other business partners. Discera has received Global ISO 9001 and Green Partner certification. About Discera Founded in 2001 to commercialize pioneering work at the University of California at Berkeley and the University of Michigan at Ann Arbor, Discera is the acknowledged leader in CMOS-based MEMS oscillator technology. The company has 28 patents in MEMS core and implementation technologies, and was presented with the prestigious Wall Street Journal Innovation Award. Disceras products serve as the heartbeat to a wide variety of computing, consumer electronics, industrial, and military applications. More information is available at www.discera.com
puremichigan ohyea
Tue, Oct 12, 2010 : 10:56 a.m.
When are the inmates of this state going to take charge of their own destiny and realize the future is not in repeating the past. Mr Snyder doesn't fit nicely into that traditional politicians suit and that is what Michigan needs. Give him a try there is a lot more to gain than lose. He certainly doesn't need the money so what keeps him in Michigan except his belief that the midwest can compete with the coasts in the biotech/life science arena.
Chase Ingersoll
Tue, Oct 12, 2010 : 10:02 a.m.
China tried a planned economy to the point where they could not feed their people. Michigan should be grateful that the state and federal government effort to centrally plan industry and social welfare has so far resulted in unemployment and not mass starvation. The Chinese people/economy is winning due to their acceptance of market principals/economic realities and hard work, while many here in Michigan continue to whine and refuse to accept that market realities will exist despite efforts to legislate against market forces. Talk to a few of the Chinese students here at U of M / Eastern and they will tell you that China is practicing economic capitalism while the US is practicing socialism not just in the workplace, but in housing, primary eduction, healthcare, etc. We have met the Communist scourge and they are us.
Sam
Tue, Oct 12, 2010 : 9:44 a.m.
Clownfish and any other liberal out there. When has a Union, any union, CREATED a job?
clownfish
Tue, Oct 12, 2010 : 8:12 a.m.
What can Snyder to do get China to revalue it's currency? Nada. Zip. What can either candidate do to compete with Chinese govt owned energy companies? Zero. What did Engler and the repubs do to restructure the Michigan tax structure? Zero, zip, nada. Oh wait, they did whine about it. How is Snyder going to work with the states congress to get his "ten Point Plan" executed? We don't know. Why do so many people have problems with a constitutional right to freedom of assembly in the form of unions? I find it amusing that people are afriad of Bernero because he has been branded a "bully", then support Palin, Boehner and Used to support Cheney and Rumsfeld. he he...too rich for words. so much flip flopping. Apparently the line between being "tough" and a "bully" is the line between dem and repub! A thin red line drawn with lipstick? and finally...WOW! Snyder helped create 37 jobs, most in California or China!! Amazing! (Isn't California the home of the Dreaded two headed liberal Beast, Nancy Pelosi? Methinks Glenn Beck would make THAT connection and then connect it to Bill Ayers...somehow) How many jobs has Snyder created that still exist? A couple of hundred, with $400,000,000 in Capital?
RuralMom
Tue, Oct 12, 2010 : 7:49 a.m.
@ Inside the Hall. I sell raw materials (chemicals)for production purposes. Another thing people don't consider is the Import Duties paid when we do import to the US from ANY country. The products we import have a 6.5% Duty, depending on the product it could be much much higher. There is $ being generated from the duties, there are jobs inspecting the cargo, delivering the cargo, Customs Brokerages, etc.
JSA
Tue, Oct 12, 2010 : 7:31 a.m.
I'll take Engler over incompetants like Granholm and Bernero anyday. I understand Virg is desperate but he hasn't told the truth anywhere that I've seen. Not governor material.
Sam
Tue, Oct 12, 2010 : 7:04 a.m.
The answer is very simple. Has a Union EVER created a job? If not for business people creating jobs, there would be no work for all of these grads from the U of M, who think jobs fall from the sky. Virg Bernero is a union hack. Pure and simple. An MEA lap dog, a UAW puppet. Look around you Michigan, things are better most everywhere else. Texas, with no personal state income tax has unemployment under 5%! Keep thinking the old way. Business BAD. Unions and taxes GOOD. And learn to enjoy 15% or higher unemployment.
InsideTheHall
Tue, Oct 12, 2010 : 5:49 a.m.
Just more disinformation from Bully Bernero. A sales office in China to drum up business that will lead to more exports leading to more American jobs. Just listen to the difference in tone between Snyder and the Bully. Every Fortune 500 company has a sales presence in China. It's the Super Bowl of business and the California Gold Rush. Ignore it at your peril. This lack of fundamental understanding by Bernero is stunning and disappointing. RuralMom: What exactly do you sell to China? Knitted afghans?
racerx
Tue, Oct 12, 2010 : 2:58 a.m.
The NY Times also has covered this subject, in that, China has become the scapegoat in the mid-terms elections. As a registered Democrat who votes, I'll be voting for Snyder this election. I just don't see how the tried and true method of Bernero's campaign is offering me any substantial information why I should vote for him. It's like car advertising where one car company always says why their product is better than the other, but always mention the other product without denoting what's good about their product. In this case, instead of buyer beware, voter beware.
denise1inaa
Mon, Oct 11, 2010 : 10:11 p.m.
Hello to Craig Lounsbury- Your comment is especially true of most corporations... it is certainly true of the local Parke-Davis/Warner-Lambert/PFISER story.
Jason
Mon, Oct 11, 2010 : 8:04 p.m.
There is one - and only one - reason that this is relevant to the election... It is a perfect example of how we drive business out of Michigan, and then try to blame it on the very people that we push away. The politicians in Lansing have made Michigan toxic for business. Our ridiculous business tax and red tape have made it far harder for small businesses to compete against companies in other states AND other countries. It's like chaining a cinder block to the ankle of the Michigan business owner, and then sending him out to run a race against unchained opponents. To say that Snyder should invest in helping the people at Discera build their business, and then insist that they only operate in a State which makes it more difficult for them to succeed is just ridiculous; more importantly, it solves NOTHING. (Would you loan someone money to buy a new Cadillac and then insist that they forego career advancement opportunities, and work minimum wage at McDonalds to repay you?) Even if we required every candidate to only do business in Michigan, we are still not keeping the thousands of other business owners who are not running for office in our State, or enticing out of state businesses to come here. This is also why tax subsidies are not a real solution. I know that they seem to work well for the film industry, but think about it: We have chained every Michigan business competing in the global marketplace to a cinder block. Agreeing to not chain the film companies to a cinder block is really nice, but it does nothing to help the thousands of businesses who are already struggling in Michigan every day. And, it does nothing to entice other non-film businesses from creating jobs to come here either. Why should we fix just the film industry and hang every other industry and job in Michigan out to dry? The fact is this: Businessmen will continue to flee from this State until we fix our horrible business climate. The answer is not in expecting Snyder or anyone else to "just deal with" our idiocy, but rather to fix the problem. And since Rick Snyder has the best understanding of what it will take for us to create regulations that actually attract businesses to invest in Michigan, he is the man best suited to fix the problem.
Mr.Scientist
Mon, Oct 11, 2010 : 7:35 p.m.
That the company (Discera) employs 5 guys in China doesn't bother me and in fact that seems like a smart move. What is very disheartening is that Mr. Snyder lied about it instead of being forthcoming. I was going to vote for him coming November even though I usually don't support anti-choice candidates but now.. no thank you Mr. Snyder. And now I know why you didn't want any more public debates!
Craig Lounsbury
Mon, Oct 11, 2010 : 7:02 p.m.
"The Detroit Free Press reported today that Discera has 32 employees in the U.S." "...5-person Chinese office." according to their website included in the grand total of 37 employees are a CEO, a CTO, and 5 vice presidents. One those 7 managers also services on the 5 person board of directors. Where I come from we used to call that too many chiefs, not enough Indians.
DonBee
Mon, Oct 11, 2010 : 5:10 p.m.
Neither of these guys makes me very interested in this race. One seems to be too angry to work with the other party to really move things forward. The other seems to be less then knowledgable about his own businesses. Both do not inspire me to think they can raise the profile of Michigan nationally and internationally. Neither seem to have the ideas that will really create or bring jobs to the state. I guess we will have to wait 4 years for a leader to appear.
SillyTree
Mon, Oct 11, 2010 : 4:54 p.m.
This whole thing has strange timing. It seems to be taking attention away from Gateway. Hmmm... I mean it was almost split second timing on what was revealed and when. Hmmm...
michigan face
Mon, Oct 11, 2010 : 4:40 p.m.
Absolutely correct Tom - Remember ENGLER everyone! What a mess he made of Michigan. Yes, this Discera sham is a big problem and only beginning. This is only the start of their very new Chinese "venture", wait and see how many Research and Development jobs wind up over in China after the election. Snyder is so used to venturing and capitalizing on everything he's ever done and I'm sure he thinks that way on his road to govern our entire State. We can't afford the gamble with Snyder's lack of ability or concern for us.
Tom Joad
Mon, Oct 11, 2010 : 4:30 p.m.
Last thing Michigan needs is a Republican governor...anyone remember Engler?
queenmom
Mon, Oct 11, 2010 : 4:27 p.m.
The fact is that a company Snyder funds employs non US citizens to do jobs US citizens could do. That's outsourcing, whether it is a "state of the art facility" or not, and it is VERY relevant to the campaign for the governor's office. To think otherwise means you have no connection in your life to the auto industry.
aagal22
Mon, Oct 11, 2010 : 4:24 p.m.
Berneros assumption is that he can distort the truth and build uncertainty and fear among Michiganians that he feels wouldnt be smart enough to think otherwise. How sad and pathetic to underestimate the abilities of his audience.
RuralMom
Mon, Oct 11, 2010 : 4:02 p.m.
For it being China, the size of the space is state of the art! LOL! Also if Mr. Snyder applied himself, he could do business from Ann Arbor with Chinese. I do it everyday, have for the past 3 yrs, and I am in Michigan! We have opportunities and inquiries come in daily to do business (exporting from US) with China. Its not that hard to do, Mr. Snyder comes across as a person who plays games with words when he it was said he didn't know it was opened YET.
AfterDark
Mon, Oct 11, 2010 : 3:56 p.m.
I'm not sure which is worse - denying the existence of one of your company's locations or admitting to not knowing what's going on with it (despite a three month old press release about it).