CW Bearing US President Hu Lirong (left) signs the nomination letter for GM T1XX Production in Michigan. Provided to China Daily

Seven years ago, CW Bearing's research-and-development team made a breakthrough in ball bearings for a vehicle's electronic power steering (EPS) system.

The integrated ball nut, with other features, can help reduce exhaust emissions as well as gas consumption.

Compared with the traditional way to attach two bearings to the two ends of the ball nut, the integration of the three parts realizes "zero friction" and "minimization of energy loss", explained Hu Lirong, president and CEO of CW Bearing USA Inc, a subsidiary of privately-owned Cixing Group Co, headquartered in China's Zhejiang province.

However, the new product presented a challenge for the sales team at that time. "It was so new, nobody had ever sold them," Hu said.

Seven years later, this is no longer a problem. An 11-acre factory is going to be built in Detroit to produce the integrated ball nut exclusively for General Motors Co.

"The construction will begin on Sept 30 this year and is expected to be completed by 2016," said Hu.

The factory, with an investment of $50 million, is expected to start operation in 2018 with a designed capacity of manufacturing 1.2 million units a year.

According to the company's contract with GM, which expires in 2026, Hu said he estimated revenue at $20 million with an annual increase of 20 percent.

CW Bearing is one of only two companies in the world able to manufacture the integrated ball nut, said Hu. The other company is in Germany, however, CW Bearing's price is about 30 percent less, he said.

It takes a company's overall abilities in design, manufacturing and application engineering to produce such a unit, he said.

Within CW Bearing's US operation, 60 percent of its engineering department is focused on R&D. "This year, 4 percent to 5 percent of our $75 million in sales revenue goes to the R&D sector, and next year, the rate is going to be 6 percent," said Hu.

"We attach great importance to innovation and structural transformation," he said. "Back in Zhejiang province, the base for bearings production in China, one-third of the bearings manufacturers went bankrupt. Failure to transform their structures is the main reason."

Three to four years ago, CW Bearing's main products were standard bearings. Now more than 50 percent are self-designed non-standard bearings for customers' individual applications.

The US automobile industry is increasing the production of electronic vehicles, and CW Bearing's R&D department is stepping up efforts to meet the demand for electronic systems, Hu said.

CW Bering has become a major supplier of ball bearings to Chrysler, Ford and General Motors. Volkwagen started to use its hub wheel system, and the Volkswagen business is expected to generate a profit of $50 million by 2020.

Hu said the new factory in Detroit will help increase the company's market share in the US and guarantee timely delivery. The company plans to hire around 50 local employees form the new factory, including assembly line workers, engineers, management and sales staff.

The supply chain could be disrupted by many factors, like industrial actions or natural disasters, he said. "For instance, the 2011 Japan Tsunami inflicted great losses onthe auto industry," said Hu.

In the automotive sector, CW Bearing has an extensive field of applications, including ABS motors, steering drives, drive shafts, transmissions, headlight adjustment drives, fuel supplies and exhaust feedback.

Aside from the auto industry, which accounts for more than half of CW Bearing's customers, the company also serves a wide range of industries, such as aviation and medical.

Its ball bearings are purchased by leading manufacturers of power tools, home and garden appliances, electric motors, optical equipment, medical devices, and office equipment.

As one of China's top 500 mechanical manufacturers and top 10 bearing makers, CW Bearing has a capacity to produce 600 million bearingS every year.

Its products are sold to many Fortune 500 global enterprises, with a growing clientele of automotive and industrial original equipment manufacturer customers.

CW Bearing has been awarded a Preferred Supplier of Bosch award for five straight years; it has also been awarded "Best Performance" by Continental in the category of ball bearings last year.

In 1994, Cixing Group set up its first US operation in Southern California.

liazhu@chinadailyusa.com