The car giant started by marrying the daughter of the king

Chapter 83 General Motors' Trip to China

On October 1978, 10, Thomas Murphy, chairman of General Motors, led a 17-member delegation to China upon invitation.

Zheng Zhengqing and some leaders of the First Ministry of Machine Building went to the Capital Airport in person to greet them, and then arranged for them to stay at the Capital Hotel.

Afterwards, the delegation composed of China National Automotive Industry Corporation and the preparatory group of Sanqi began to negotiate with the delegation of General Motors on the introduction of heavy-duty vehicle production technology.

On the first day of the meeting, the two sides had huge differences.

The Sanqi preparatory group 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.

And America is naturally unwilling to give up its technology to others.

"Zheng, let me first introduce to you some of the ways in which General Motors cooperates with foreign companies."

Seeing that the negotiations had reached a deadlock at the very beginning, GM's sales director Edward stepped forward to break the silence.

"We invest overseas in a variety of ways that are flexible and changeable."

"Investing in building a factory on your own is naturally a common method. Another common method is 'joint venture'."

When Edward said this, Zheng Zhengqing, who knew some English, immediately frowned, because an English word he had never heard of appeared in Edward's words - joint venture.

Zheng Zhengqing knew that joint means common or burden, and venture means risk, and that together they should mean "sharing the risk", but he was not clear about its exact meaning.

"Mr. Edward, what does 'joint venture' mean exactly?"

If you don’t understand, just ask.

This word in particular seemed to be very crucial. Zheng Zhengqing felt that if he didn't understand it clearly, it might cause trouble.

At this time, General Motors' own translator came out to give a detailed explanation.

Zheng Zhengqing and others understood what they heard, but they had never encountered this kind of "joint venture" before and did not dare to give any response.

According to the plan they had previously discussed internally, this communication with General Motors was to introduce heavy-duty truck technology rather than discuss any "joint venture" matters.

"Why do you only talk to us about technology introduction and technology transfer instead of joint venture? In other words, we should invest together and 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 speak out his inner doubts.

As the chairman of General Motors, he is very optimistic about the potential of the Chinese market.

So he doesn't accept the transfer of technology.

What he wanted was for General Motors to enter this market through wholly-owned or joint venture and slowly make money in the long run.

Rather than a one-time transfer of technology to make some money.

Seeing that Huaxia seemed unable to give an answer to his question, Murphy gave a vivid explanation of joint ventures, saying, "To put it simply, a joint venture means putting our wallets together and jointly setting up a business. We make profits together and lose money together. This is a mutually beneficial way of cooperation."

"To put it more simply, a joint venture is like getting married and establishing a joint family."

It would have been better if Murphy didn't explain. After this explanation, things had no way of developing in the direction he wanted.

From the perspective of Zheng Zhengqing and others, how can China "marry" the big capitalists?

But the joint venture proposed by General Motors is indeed a brand new concept.

They were completely undecided about how to respond, so naturally, there was no progress in the negotiations.

The first day's meeting ended so hastily. Both parties went back to discuss and will continue negotiations tomorrow.

Of course, although the negotiations did not go particularly smoothly, the reception work at the Capital Hotel was still very good.

The General Motors team fully enjoyed the power of Chinese cuisine here, which made them feel that their trip to China was at least not in vain.

"Murphy, I don't think China has the ability to jointly operate a large heavy-duty truck company with us, especially since they want to build a large heavy-duty truck factory with an annual production capacity of 15 vehicles in one go."

As sales director, Edward has a somewhat pessimistic view.

Before coming to China, he contacted some local Chinese to find out more about the situation.

Now that he has arrived in China, combined with the information he had learned before, he feels that it is meaningless for General Motors to discuss cooperation with a country that is too backward.

Even if we come back and have a look in ten years, it will still be too early.

"Huaxia has invited quite a few auto companies to come for inspection this time. We are definitely not the only one."

"The relationship between China and the polar bears is very bad now, and China is discussing with China how to further improve the relationship."

"Against this background, domestic departments are concerned about our companies cooperating with Huaxia."

As the chairman of General Motors, Murphy naturally considers issues from a much higher perspective than Edward.

When it comes to cooperation with China, we cannot simply consider it from the perspective of making money in the short term, but we need to consider more other factors.

“But their idea of ​​introducing technology is really unacceptable.”

"If they can offer a sky-high price, then maybe we can talk to them."

"But as far as I know, China's foreign exchange reserves are less than 2 million US dollars. Even if all of them are used as funds for this project, it is impossible for us to be satisfied."

Edward touched upon a very crucial point.

That's the matter of technology transfer fees.

Even though General Motors has been clamoring that it is unwilling to transfer technology, if you just slap a $100 billion technology import contract on the table, do you think they are still willing to transfer the technology?
Ultimately, the conditions offered by China cannot meet their requirements.

"We will visit the liaison office later and ask them to introduce the situation of China's automobile industry so that we can make a better judgment."

Although Murphy didn't know the saying "Know yourself and your enemy, and you can fight a hundred battles without danger", he certainly understood its meaning.

Since the talks with the Chinese delegation were not going so smoothly, we had to find a way to clarify the situation and then make further judgments.

"That's a good idea. They are usually responsible for collecting all kinds of intelligence. The information related to the automotive industry is definitely much more complete than what we have collected in America."

After Edward and Murphy had this conversation, they immediately started calling the liaison office.

Soon, a few of them went over to inquire about the information.

Naturally, someone reported this news to the Chinese delegation.

(End of this chapter)