Chapter 83 General Motors’ trip to China
On October 17, 1978, Thomas Murphy, chairman of General Motors of America, led a 17-member delegation to China upon invitation.
Zheng Zhengqing and some leaders of the First Machinery Department went to the Capital Airport to greet them in person, and then arranged for them to stay at the Capital Hotel.
After that, the delegation composed of China Automotive Industry Corporation and the SAIC preparatory team began to negotiate with General Motors on the introduction of heavy-duty vehicle production technology.
On the first day of the meeting, the differences between the two sides were very big.
The SAIC preparatory team represented by Zheng Zhengqing was only willing to discuss technology introduction and transfer with the United States, and did not respond much to General Motors' idea of entering the Chinese market.
The United States is naturally unwilling to give up its technology to others.
"Zheng, let me first introduce to you some of the ways that General Motors cooperates with foreign companies."
Seeing that the negotiations had reached a deadlock at the beginning, General Motors' sales director Edward stood up came out to break the silence.
“We invest overseas in various and flexible ways.”
"Investing and building a factory on your own is naturally a more common method. There is another method that is also more common, and that is 'joint venture'."
When Edward said this, Zheng, who knew some English, Zhengqing immediately frowned because an English word he had never heard of appeared in Edward's words - jointventure.
Zheng Zhengqing knows that joint means jointness or burden, and venture means risk. It seems that being together should mean "sharing risks," but the exact meaning is not clear.
"Mr. Edward, what is the specific meaning of 'jointventure'?"
Just ask if you don't understand.
In particular, this word seemed to be very critical. Zheng Zhengqing felt that if he didn't understand it clearly, he might make mistakes.
At this time, GM’s own translator stood up and gave a special explanation.
Zheng Zhengqing and others understood after hearing this, but they had never encountered this kind of "joint venture" method before, and they did not dare to give any reply at all.
According to their previous internal discussion plan, the communication with General Motors this time was to introduce heavy truck technology, not to talk about "joint ventures".
“Why do you only talk to us about technology introduction and transfer and not about joint ventures? In other words, we both invest together to establish a joint venture.”
Seeing that the two sides had been arguing for more than an hour without any further progress, Murphy couldn't help but voice his inner doubts.
As the chairman of General Motors, he is very optimistic about the potential of the Chinese market.
So he does not accept the transfer of technology.
What he wants is for General Motors to enter this market through sole proprietorship or joint venture and slowly make money in the long run.
Instead of making some money by transferring technology one-time.
Seeing that Huaxia seemed to have no answer to his question, Murphy gave a vivid explanation of the joint venture, saying: "To put it simply, a joint venture means putting our wallets together and running a joint venture." , we must make profits together and lose together, this is a mutually beneficial cooperation method.”
“To put it more simply, a joint venture is like getting married and building a joint family.”
It's okay if Murphy doesn't explain. With this explanation, things will be even more difficult to develop in the direction he wants.
From Zheng Zhengqing’s point of view, how can China “marry” big capitalists?
But the joint venture proposed by General Motors is indeed a brand-new concept.
They were completely undecided on how to deal with it. Naturally, there was no progress in this negotiation.
The first day of the meeting ended hastily. Both parties went back to discuss and continue the negotiation tomorrow.
Of course, although the negotiations did not go particularly smoothly, the reception work at the Capital Hotel was still very good.
GM and his team fully enjoyed the power of Chinese cuisine here, which made them feel that their visit to China was at least not in vain.
"Murphy, I don't think China has the ability to run a large-scale heavy truck joint venture with us now, especially since the other party wants to build a large-scale heavy truck factory with an annual production capacity of 150,000 units in one go."
As a salesperson Director, Edward's view is somewhat pessimistic.
Before coming to China, he found some local Chinese to understand the situation.
Now that he has arrived in China, based on the information he learned before, he feels that it is meaningless for General Motors to discuss cooperation with a country that is too backward.
Come and have a look in ten years, but it will be too early.
"China has invited many automobile companies to inspect this time, and we are certainly not the only one."
"The relationship between China and polar bears is very bad now, and the country is discussing with China about further improving the relationship. . ”
“In this context, domestic departments are concerned about our companies cooperating with China.”
As the chairman of General Motors, Murphy has a natural perspective on the problem. Much taller than Edward.
Cooperation with Huaxia cannot simply be considered from the perspective of making money in a short period of time, but more other factors need to be considered.
“But they really can’t accept the idea of introducing technology.”
“If they can offer a sky-high price, then maybe we can still talk to them.”
“ But as far as I know, China’s foreign exchange reserves are less than 200 million US dollars. Even if they are all used as funds for this project, it will not satisfy us. "
Edward mentioned a very key point. problem.
That’s the matter of technology transfer fees.
Although General Motors has been clamoring that it is unwilling to transfer technology, but if you just put a $10 billion technology introduction contract on the table and see if they are still willing to transfer technology?
In the final analysis, the conditions provided by China cannot meet their requirements.
"We will visit the liaison office later and let them introduce the situation of China's automobile industry so that we can make further judgments better."
Although Murphy does not know "Know yourself and your enemy, and you can fight a hundred battles without danger." But he definitely understood the meaning.
Since the talks with the Chinese delegation did not go so smoothly, we must find a way to understand the situation before making further judgments.
"This is a good idea. They are usually responsible for collecting all kinds of intelligence. The information related to the automobile industry is definitely much more complete than what we collect in the United States."
After Edward and Murphy had such an exchange, I immediately started calling the liaison office.
Soon, a few of them went over to inquire about information.
This news was naturally reported to the Chinese delegation.
(End of this chapter)