China in my future?

jskibo

Done
Just had an internal interview for another Program Manager role. This time at the GE / COMAC JV Aviage. I would be the PM for Customer Services and Systems. Basically setting up the support for our content of the C919 aircraft, also all the Field Service reps would report through me as their manager. I made it through this one so next interview is with the China group.

This would put me in Shanghai for at least the next two years, so a lot to consider. There's pluses and minuses to the two different packages they would offer, Expat or Local. Salary wise Local gets 13 months pay per year, bonus, housing, healthcare, childrens education, transportation and relo. Local has been running 7-8% yearly salary increases. Two year contract, renewable.

Expat has most of the same benefits, get to continue my pension vs a different scheme. Slightly lower pay, raises have run 2-3%, no bonus, 12 months pay per year. A little bit more for housing (read slightly bigger house as its based on family size in this package), a little less in transportation allowance. No relo, but they cover flying over (No relo means they won't pay for your house sale, not an issue for me, or storage, that's $1200 a year). Two trips home here vs. one with local. Two year assignment non-renewable except in extreme circumsatnces (meaning they can't find a backfill with a local hire). Tax Equalization as well.

Pay wise its about a $25K-$35K difference with local being the higher one. Unknown the tax coverage on the local, need more discussion. Continuing to add to my pension is a big consideration. My wife's a Filipina so it actually puts us together quicker than the long ass US CR1 Visa process.

Also have to think about timing my return visits to maintain instrument currency. Don't think I could do that in China :)

However, with the extra money from the local package I may be able to bank enough in 2 - 4 years there that I can take the huge pay cut, semi retire, and fly....so that's a big consideration.

A lot to think about and a lot more discussions with HR.

* I also need to tell them there's no way I can go before NJC or they have to fly me back to attend :)
 
Shanghai is awesome. My brother used to live there back when he worked for GE. I visited him twice and had an incredible time.
 
Do some research on the schools and housing costs near the schools. Those are two huge expenses in Shanghai. A good school in Shanghai is $30,000+/year/child.

http://www.concordiashanghai.org/ K-4 is $35,000 first year

http://www.saschina.org/ Even more expensive although their Pre-K is slightly less.

Not sure how old your kids are, but you're looking at $70,000/year for two kids. Is that covered by the contract or is there a maximum amount?

Here's a good site for seeing what the options are, but the tuition amounts they have on the home page are wrong (I guess not updated). Concordia and SAS have both gone up by $10,000 in just the last few years.

Tax in China is high in your likely bracket. A well constructed contract has lots of expense money since the tax tends to be on just the salary.

Good luck,


TP
 
Do some research on the schools and housing costs near the schools. Those are two huge expenses in Shanghai. A good school in Shanghai is $30,000+/year/child.

http://www.concordiashanghai.org/ K-4 is $35,000 first year

http://www.saschina.org/ Even more expensive although their Pre-K is slightly less.

Not sure how old your kids are, but you're looking at $70,000/year for two kids. Is that covered by the contract or is there a maximum amount?

Here's a good site for seeing what the options are, but the tuition amounts they have on the home page are wrong (I guess not updated). Concordia and SAS have both gone up by $10,000 in just the last few years.

Tax in China is high in your likely bracket. A well constructed contract has lots of expense money since the tax tends to be on just the salary.

Good luck,


TP


Thanks!

School tuition from 3 years to 18 years is covered full under the expat or local package, though I would likely only have the two year old with me.

Housing is a question. Under expat these a level depending on your salary band however the negotiation and lease is handle by a US company and paid by them. Under the local, it's a lump sum amount with a local company handling the negotiation of the lease. Need to understand the amount a bit better there.

Tax is major, 40% from china in my bracket and then Uncle Sam wants his piece above the $97k level exemption. Expat package has a tax equalization policy. Basically makes me whole to whatever level I would pay at my home of record, working to see what the local package has in it.

If pension stops being paid into, then of course, I need the compensation to reflect that fact.

Lots to consider, waiting on more info and a likely flight over for a look see. Might just hit Exec Platinum this year after all :)
 
I'm with @Screaming_Emu, Shanghai is great. My folks spent 3 years working over there, and loved it.

Check out www.shanghaiexpat.com


Been on that site for the past three weeks reading heavily!

Had the second interview last night at 9pm, and everything went well. In fact he said he was going down to HR to tell them to move forward.

Scope is a lot bigger than I expected, though fits in with what I did at Boeing for 15 years. Basically building the global services and support base for our Avionics packages. The risk is who besides COMAC on the C919 / C929 is going to buy the product? But its a well funded JV so years to worry about that.

Just have to wait and see what the final numbers look like now.
 
Tax is major, 40% from china in my bracket and then Uncle Sam wants his piece above the $97k level exemption. Expat package has a tax equalization policy. Basically makes me whole to whatever level I would pay at my home of record, working to see what the local package has in it.

You may be familiar with all this, but for the benefit of those who aren't ...

You get a credit on your US taxes for the foreign tax paid. You can't credit those wages covered by the exclusion, but those Chinese taxes paid on wages north of 97.6k should qualify for the credit. Oh, yeah, you have to be gone 330+ days or really have a permanent residence abroad to qualify for the exclusion. Make sure you do what's necessary to qualify (see "tax advice" below :)).

This all gets a bit complex ... http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Tax-Credit . There's a lot of stuff dealing with housing allowances and expenses as well.

I'm sure Generous Electric provides some tax advice and expertise, but you'd be well-served to find a CPA or Enrolled Agent who does a lot of this stuff. And don't take advice from "some guy on the internet" :D .
 
Tough decision, so flying professionally would be put on hold for this yeah? Does sound like really good money, especially since you just got married and all.
 
You may be familiar with all this, but for the benefit of those who aren't ...

You get a credit on your US taxes for the foreign tax paid. You can't credit those wages covered by the exclusion, but those Chinese taxes paid on wages north of 97.6k should qualify for the credit. Oh, yeah, you have to be gone 330+ days or really have a permanent residence abroad to qualify for the exclusion. Make sure you do what's necessary to qualify (see "tax advice" below :)).

This all gets a bit complex ... http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Tax-Credit . There's a lot of stuff dealing with housing allowances and expenses as well.

I'm sure Generous Electric provides some tax advice and expertise, but you'd be well-served to find a CPA or Enrolled Agent who does a lot of this stuff. And don't take advice from "some guy on the internet" :D .

Yes all fun stuff. There's also a credit for housing costs that is normally a percentage of your exclusion, but there are higher carve outs for select higher cost cities around the world. Also the exclusion only cover foreign earned income, not any interest or gains from US based income.

Then there's the fun of the FATCA law requiring reporting of foreign assets, which China has instructed its banks to ignore and since the reporting falls on the taxpayer anywhere it just leaves you a bit more under the microscope from having assets in a country not cooperating.

In this case, I would be seconded to the JV, so Uncle Generous would not offer the tax equalization program in place under their normal GME expat program. There's good and bad to that so final numbers need to be weighed carefully.

A good tax accountant with specific country experience is definitely a requirement here. If I made under the exclusion it wouldn't be as much of an issue, but since even my current income greatly exceeds in, and then all the other benefits such as housing, transportation, bonus, etc.. Are stacked on top, there's no way I'd be sitting down with a copy of Tax Cut and a cup of coffee trying to figure it out.

Tough decision, so flying professionally would be put on hold for this yeah? Does sound like really good money, especially since you just got married and all.

This would likely be the death knell for flying professionally as a career move. I'm 47 now and this is a minimum of a two year assignment, likely more considering the scope and where the program is today. Any thought of 121 would be out the window for me. Then again, I would need two plus years of savings even now to afford the pay cut from my current income to first year pay, plus at least a year of just straight building hours to get to that point.

What it would do, if things work well, is to allow me to semi-retire when I'm done over there, as well as enough cash on hand to buy a plane if I wanted. I can draw my McDonnell-Douglas / Boeing pension beginning in 2020, GE pension in 2031. If I work it right I can come back and just instruct or eventually find some 91 or other work to keep me busy and not have to go back into all the fun a corporate cube job is!

Certainly a lot to consider and weigh against other options.
 
This would likely be the death knell for flying professionally as a career move. I'm 47 now and this is a minimum of a two year assignment, likely more considering the scope and where the program is today. Any thought of 121 would be out the window for me. Then again, I would need two plus years of savings even now to afford the pay cut from my current income to first year pay, plus at least a year of just straight building hours to get to that point.

What it would do, if things work well, is to allow me to semi-retire when I'm done over there, as well as enough cash on hand to buy a plane if I wanted. I can draw my McDonnell-Douglas / Boeing pension beginning in 2020, GE pension in 2031. If I work it right I can come back and just instruct or eventually find some 91 or other work to keep me busy and not have to go back into all the fun a corporate cube job is!

Certainly a lot to consider and weigh against other options.

All I'm gonna say is that if you enjoy what you're doing then stick with it. 121 is NOT worth the sacrifices if you're enjoying your life... Just stick with the China gig--that sounds really interesting and will certainly be quite an adventure for you.
 
2 years is the minimum assignment?

Very likely you would want extend your contract with GE in Shanghai. Expat is a good deal. I work and lived in Northern and Central Japan for 8 total years until my contract time in Japan expired. I was 22 at that time and the minimum assignment was 2 years. I ended up staying until the good old Chief of Naval Personnel told me it's time to go back. Yea, I didn't want to go back. I met my wife who is from Japan and my 2 year old daughter was born there. I'm 30 now and I retire from the US Govt in 7 more years. I'm looking at retiring and working back in Korea, China, Singapore (General Electrics) or go back to Japan. Life is great overseas...If I got that opportunity, I would take it in a heartbeat.
 
2 years is the minimum assignment?

Very likely you would want extend your contract with GE in Shanghai. Expat is a good deal. I work and lived in Northern and Central Japan for 8 total years until my contract time in Japan expired. I was 22 at that time and the minimum assignment was 2 years. I ended up staying until the good old Chief of Naval Personnel told me it's time to go back. Yea, I didn't want to go back. I met my wife who is from Japan and my 2 year old daughter was born there. I'm 30 now and I retire from the US Govt in 7 more years. I'm looking at retiring and working back in Korea, China, Singapore (General Electrics) or go back to Japan. Life is great overseas...If I got that opportunity, I would take it in a heartbeat.

Yes, two years is the minimum, though I would need longer than that to be anywhere need completing the scope of effort I'm looking at. Basically take a new Avionics and Cockpit displays MFG and integrator and establish the worldwide distribution and support network, hire and train the FSRs, establish airline agreements, etc...

Interesting stuff, and a change from the military side for the past 20 years.

I've done expat stuff in Europe and the Middle East, but this would be the first Asian assignment.
 
This would likely be the death knell for flying professionally as a career move. I'm 47 now

Depends on your experience level. I was hired at 58 for regional while waiting/hoping for Jet to call me back. They were glad to have me, and I would have checked out in seven months. You may shy away from this - the lifestyle is pretty tough on us seniors - but assuming you get hired at age 50 you've got fifteen years to advance to left seat at a "real" airline. I got called back just as my notification for an upgrade class was being processed - and at my age I would have just stayed at the regional, but that was by choice. You can get in on the ground floor rather easily now with 1500 hours.
 
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