The Business Times - 11 Nov - AWCR
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8/3/2019 The Business Times - 11 Nov - AWCR http://slidepdf.com/reader/full/the-business-times-11-nov-awcr 1/2 General Motors' win-win story in China GM exorcises the fiscal demons of its chequered past and rewrites US automobile history with a new chapter in China, reviews LINDA LIM American Wheels Chinese Roads Michael J Dunne John Wiley & Sons, Singapore 227 pages Price: $45.82, including GST Rating: A WITH all the headline furo- re over contentious Unit- ed States-China trade relations and the peren- nial threat of a "currency war", it is easy to over- look the mutually benefi- cial aspects of the compli- cated, multifaceted and ever-evolving relation- ship between these two powerful nations. This perfectly timed Singapore-published book - Which has deservedly attracted much attention in the international business press, the global automotive industry and the China business community - corrects the common stereotype that the national interests of the US and China are necessarily opposed in a ze- ro-sum struggle to both "be No.1". The author, Michael Dunne, a native of the US "car country" in the Detroit area, is an unu- sual American - an MBA graduate fluent and lit- erate in Chinese and Thai. which he studied at the University of Michigan (where he was a student of this reviewer), and the lan- guage of Indonesia, where he now resides and where the auto industry is once more poised to take off. Dunne recounts in very readable style the riveting saga of how General Mo- tors, once the world's larg- est automobile producer in the world's largest auto mar- ket - which was then the United States - became the largest foreign player in the world's largest auto market - which is now China - at a time when its fortunes at home were rapidly deterio- rating, ending in bankruptcy and a controver- sial US government bail-out during the 2007-2009 global financial crisis. GM owes much of its success and profitabili- ty in the China market to its fortunate strategic partnership with the Shanghai Automotive In- dustry Corporation (SAIC), the Chinese state-owned enterprise which was also the lo- cal joint-venture partner of its global competi- tor, Volkswagen. It also had to beat its own De- troit home-town rival Ford Motor in order to be- come SAIC's American partner. In the world of global strategy, there is a high rate of failure of around 75 per cent among international joint ventures, such as oc- curred with the Daimler-Chrysler venture in De- troit itself. That the GM-SAIC venture actually succeeded, despite the two partners' ver?differ- ent national and corporate worldviews, cul- tures, strategic motivations, organisational structures and management imperatives, may be considered nothing short of' a miracle. This book unpacks the puzzle of this "mira- cle" through a readable blow-by-blow account of the typical two-steps-forward-one-step-back process of establishing the venture, illustrated with vivid anecdotes told mostly from an GM "insider" perspective. The author's 20 years of consulting experi- ence in the China and Mean auto industry add insightful personal nuances to a far-from- straightforward business story. He chronicles the many tensions between statism and capitalism, foreigner and local na- tional, entrepreneurial autonomy and corpo- rate bureaucracy, long-term strategic and short-term financial objectives and constraints, subsidiary/periphery and head-office/centre in- terests, in ever-shifting local and global market environments. Somehow these contradictions were re- solved, mainly through quick learning, adaptive flexibility and determined persistence, leav- ened with luck, opportunism, fortuitous timing and the leadership of individual personalities on the GM side. Unfortunately, what transpired on the SAIC side remains largely unknown and undocu- Ref: 00122625626 Singapore Press Holdings Ltd. Permission required for reproduction. The Business Times 11/11/2011 Page: 37 By: Linda Lim Section: Arts & Entertainment Region: Singapore Circulation: 37500 Type: Singapore - English Newspapers Size: 392.00 sq.cms Frequency: MTWTFS Page 1 of 2
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Transcript of The Business Times - 11 Nov - AWCR
8/3/2019 The Business Times - 11 Nov - AWCR
http://slidepdf.com/reader/full/the-business-times-11-nov-awcr 1/2
General Motors' win-win story in ChinaGM exorcises the fiscal demons of its chequered past and rewrites US automobile history with a new chapter in China, reviews LINDA LIM
American Wheels Chinese RoadsMichael J DunneJohn Wiley & Sons, Singapore227 pagesPrice: $45.82, including GSTRating: A
WITH
all the headline furo-re over contentious Unit-ed States-China traderelations and the peren-nial threat of a "currencywar", it is easy to over-look the mutually benefi-cial aspects of the compli-
cated, multifaceted and ever-evolving relation-ship between these two powerful nations.
This perfectly timed Singapore-publishedbook - Which has deservedly attracted muchattention in the international business press,the global automotive industry and the Chinabusiness community - corrects the commonstereotype that the national interests of the USand China are necessarily opposed in a ze-ro-sum struggle to both "be No.1".
The author, Michael Dunne, a native of theUS "car country" in the Detroit area, is an unu-sual American - an MBA graduate fluent and lit-erate in Chinese and Thai. which he studied at
the University of Michigan(where he was a student ofthis reviewer), and the lan-guage of Indonesia, wherehe now resides and wherethe auto industry is oncemore poised to take off.
Dunne recounts in veryreadable style the rivetingsaga of how General Mo-tors, once the world's larg-
est automobile producer inthe world's largest auto mar-ket - which was then theUnited States - became thelargest foreign player in theworld's largest auto market- which is now China - at atime when its fortunes athome were rapidly deterio-rating, ending in bankruptcy and a controver-sial US government bail-out during the2007-2009 global financial crisis.
GM owes much of its success and profitabili-ty in the China market to its fortunate strategic
partnership with the Shanghai Automotive In-dustry Corporation (SAIC), the Chinesestate-owned enterprise which was also the lo-cal joint-venture partner of its global competi-
tor, Volkswagen. It also had to beat its own De-troit home-town rival Ford Motor in order to be-come SAIC's American partner.
In the world of global strategy, there is ahigh rate of failure of around 75 per centamong international joint ventures, such as oc-curred with the Daimler-Chrysler venture in De-troit itself. That the GM-SAIC venture actuallysucceeded, despite the two partners' ver?differ-ent national and corporate worldviews, cul-tures, strategic motivations, organisationalstructures and management imperatives, maybe considered nothing short of' a miracle.
This book unpacks the puzzle of this "mira-cle" through a readable blow-by-blow accountof the typical two-steps-forward-one-step-backprocess of establishing the venture, illustrated
with vivid anecdotes told mostly from an GM"insider" perspective.The author's 20 years of consulting experi-
ence in the China and Mean auto industry addinsightful personal nuances to a far-from-straightforward business story.
He chronicles the many tensions betweenstatism and capitalism, foreigner and local na-tional, entrepreneurial autonomy and corpo-rate bureaucracy, long-term strategic andshort-term financial objectives and constraints,subsidiary/periphery and head-office/centre in-terests, in ever-shifting local and global marketenvironments.
Somehow these contradictions were re-
solved, mainly through quick learning, adaptiveflexibility and determined persistence, leav-ened with luck, opportunism, fortuitous timingand the leadership of individual personalitieson the GM side.
Unfortunately, what transpired on the SAICside remains largely unknown and undocu-
Ref: 00122625626Singapore Press Holdings Ltd. Permission required for reproduction.
The Business Times11/11/2011Page: 37
By: Linda Lim
Section: Arts & Entertainment
Region: Singapore Circulation: 37500
Type: Singapore - English Newspapers
Size: 392.00 sq.cms
Frequency: MTWTFS
Page 1 of 2
8/3/2019 The Business Times - 11 Nov - AWCR
http://slidepdf.com/reader/full/the-business-times-11-nov-awcr 2/2
mented, at least here, and that story remains tobe told, as does the budding story of new Chi-nese investments in the Michigan auto industryitself.
Ultimately, it was very likely the match be-tween SAIC and the Chinese government'sdesire to build a competitive global auto indus-try through partnerships with foreign makersfrom which they could acquire technology andmanagement, and GM's need for access to whatwould become the large, fast-growing but heavi-ly regulated emerging Chinese auto market,that kept both sides working hard towards thesuccessful outcome from which both have bene-fited.
That is a useful lesson for other aspects ofthe US-China relationship. GM's sell-downduring the financial crisis of its original 50-50share of the Shanghai joint venture to the cur-rent 49 per cent, with SAIC holding the control-ling 51 per cent stake--about which the authorand others express some misgivings-mightprove to be a symbolic test of whether trueequality between these two giants can be peace-fully and profitably achieved. For the benefit ofthe world at large, let's hope the answer is yes.
HICKAAL J. DUNNE
AMERICANWHEELSCHINESEROADS
Linda Lim is Professor of Strategy at theRoss School of Business, University of
Michigan
That the GM-SAIC(ShanghaiAutomotive IndustryCorporation) ventureactually succeeded...may be considerednothing short of amiracle
On the likelihood of the GMforay in China falling through
due to a 75 per cent failurerate among global joint
ventures
Ref: 00122625626Singapore Press Holdings Ltd. Permission required for reproduction.
The Business Times11/11/2011Page: 37
By: Linda Lim
Section: Arts & Entertainment
Region: Singapore Circulation: 37500
Type: Singapore - English Newspapers
Size: 392.00 sq.cms
Frequency: MTWTFS
Page 2 of 2
