Wang Yung-ching readies to manufacture car parts

At the age of 86, Taiwan's best-known and wealthiest industrialist could easily be thinking about retirement. Instead, he has just decided to start another corporate empire, this time manufacturing a full range of auto parts in China with the hope of even assembling fuel-cell cars there some day.

It is a goal in keeping with the soaring ambitions of Wang Yung-ching (王永慶), a tea farmer's son who started work at age 9 to help support his family. Wang is the founder and chairman of the Formosa Plastics Group (台塑集團), a conglomerate that is not only the world's largest producer of many kinds of plastic but also a large and growing competitor in health care, chemical production and gasoline retailing.

Wang's ambitions stretch far beyond Taiwan. The company recently completed a US$1 billion expansion of its already vast chemical manufacturing complex near Houston. And even as he is trying these days to persuade the Chinese government to let him open a chain of hospitals in big cities, Wang is lobbying with Taiwan's government to initiate full trade and transportation links with China, where he is already one of the largest foreign investors.

Think of him as something of an Asian Sam Walton, Wal-Mart's founder. Nicknamed "the god of management" by Taiwan politicians and the news media, Wang has become a widely quoted font of homespun wisdom, carrying frugality to sometimes eccentric extremes. Until recently, for instance, he took only cold showers because he viewed warm water as a needless expense.

Wang is about to take another big plunge. He plans to start a comprehensive network of auto parts factories in China, capable of supplying everything needed to assemble a car. In the long run, he said, Formosa Plastics should be involved in assembling cars, in partnership with a big international automaker.

"My grand objective is to lay down the foundation of the whole infrastructure," for building everything that goes into a car, he said in a rare interview at the company's headquarters here.

Wang said he expected that General Motors would be Formosa Plastics' partner for its expansion into China. The two companies have already signed a memorandum of understanding to set up a joint auto parts manufacturing venture in China, and a final agreement is ready for signing. But many details remain to be decided, he cautioned, including even what the joint venture's first factory should make and where it should be situated.

Liu Hsiao-chih, managing director of GM's Taiwan subsidiary, confirmed that the company was in talks with several companies there, including Formosa Plastics, but said that no decisions had been made.

A GM alliance with Formosa Plastics would be consistent with two strong trends in the auto industry. DaimlerChrysler and other automakers have already said they are looking to inexpensive plastic parts as a way to bring the price of new cars within reach of the rapidly growing middle classes of countries like China and India.

At the same time, auto industry researchers working on alternatives to the internal-combustion engine say the extensive use of very low weight parts will be critical to the future success of fuel-cell cars, which would rely on low-pollution devices that generate electrical current from chemical reactions but whose prototypes remain much less powerful than cars powered by gasoline.