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China-Carmakers Global Talent Hunt

4927 Views 7 Replies 6 Participants Last post by  gr8
pretty good article i found..pretty damn long though

It's a startling trophy hire, and further evidence for auto executives at Toyota (TM ), Ford Motor (F ), Hyundai (HYUD ), and elsewhere that their Chinese competitors are deadly serious about moving up in the global auto industry. On June 18, SAIC Motor announced it had hired former GM executive Philip Murtaugh to run its overseas operations from its Shanghai headquarters.

SAIC, whose parent company SAIC Group maintains big joint ventures with both Volkswagen (VLKAY ) and General Motors (GM ), recently unveiled plans to build its own locally branded vehicles. And bagging a car industry pro like Murtaugh is a real coup¡ªand a clear indication SAIC no longer wants to play just a back-up, manufacturing role in China to foreign auto makers.

"They need to have the capability to dictate their own future, rather than just rely on joint ventures," says Murtaugh, a 32-year veteran of GM who headed its China operations for nine years before leaving last year. He will now serve as executive vice-president for international operations at SAIC Motor. "My role is to help them become a globally competitive company," he says of his new position.

WHO'S WHO As China's own auto makers shift into high gear in their pursuit of the mainland and overseas markets, the talent search for foreign auto executives or mainland ones with deep overseas experience has intensified. Wuhu-based Chery, which has linked up with Malcom Bricklin's Visionary Vehicles and has plans to export to the U.S. and Europe, has hired scores of overseas Chinese managers with international experience, including a longtime Ford executive heading its research and development and a DaimlerChrysler (DCX ) executive recruited to honcho its international operations.

"They have hired more than 200 people with international experience" says one longtime China auto industry insider, commenting on salaries in U.S. dollars. "They don't blink at six figures." Chery declined to talk to BusinessWeek for this story.

Shenyang-based Brilliance Automotive, BMW's partner in Northeast China, has hired a former DaimlerChrysler executive to head its R&D center and focus on building its own indigenous car models. Meanwhile, Hangzhou-based Geely, which was the first Chinese auto company to display at the Detroit Auto Show when it showed a concept car there in January, has hired a former Daewoo executive to run its R&D.

EXECUTIVE POACHING The auto show coincided with traditional Chinese New Year, so the company held a bash to celebrate the Year of the Dog. It attracted the interest of several hundred Detroit-based Chinese who are working for the likes of GM and Ford.

"Of course, many of them were interested in working for us but it was just a get-together, not recruitment," says Daniel Dai, chief investment officer of Geely Automobile Holdings. He adds that General Motors complained to Geely that it was trying to poach their executives. "The U.S. car industry isn't doing so well. If GM later lays them off, why shouldn't Geely employ them?" asks Dai. "These people have families to support. Maybe in the future we will consider hiring them."

It's clear what's driving the mad rush to secure internationally experienced managers and engineers. With the strong encouragement of Beijing, Chinese auto companies are stepping on the gas pedal in their efforts to develop local brands to compete at home and overseas.

BRAND NEW BRAND Says Jack Perkowski, Chairman and CEO of Beijing-based auto components manufacturer Asimco. "Every single local company, whether or not they have a foreign partner, is now trying to develop local brands."

That's certainly SAIC's goal. In April, the company announced it will spend more than $1.7 billion over the next five years to create its own brand that will be launched sometime in the next couple of months. (The name of the brand has still not been announced although ¡®Shanghai'¡ªthe name of the brand which SAIC originally manufactured under¡ªis under discussion.) Plans call for developing more than 30 models based on five basic platforms.

And the company says it may export to Europe as early as next year. "First we want the quality and service level of our product to reach global standards, then we will try to sell into Europe and the U.S.," says Andy Chen, a spokesman for SAIC Motor Manufacturing.

Even before the Murtaugh hire, SAIC had already begun to lay the groundwork. In October, 2004, it purchased Korea's Ssangyong. And SAIC added more than 150 British engineers when it purchased the intellectual property of Britain's Rover last year. The new indigenous brand will be based on the Rover 75 for a saloon model, and Rover 25 for a small car.

WORLD CLASS Similarly, Wang Xiaoqiu, the general manager of SAIC Motor, is a 14-year veteran of SVW, the parent company's venture with Volkswagen. At the same time, SAIC Group's chief engineer and designer, who oversees research and development at the smaller company, worked in the U.S. for GM and parts maker Delphi.

"We are trying to build a team of more than 1,000 professional engineers. Eventually the number will reach 4,000 engineers and a world class R&D center is expected to be finished in 2015 [in Shanghai]," says SAIC Motor's Chen whose company now has 700 engineers. "SAIC is one of the top auto companies in China's domestic market, so for talent who want to work in Shanghai and work for the China auto industry, I think the SAIC Group is a good choice for them," he says, adding that they have also hired managers from Toyota and PSA Citroen (PEUGY ).
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...the rest of the article..

And they are spending big money to lure them, too. "These people are not cheap¡ªin order to get them, you have to give them competitive salaries, put their kids in international schools, and convince them to move over here," says Shanghai-based Lubo Li, senior director, market and business development, at JD Power Asia Pacific, which like BusinessWeek, is owned by the McGraw-Hill Companies (MHP ). "So they not only talk the talk, but walk the walk."

NEW DIVISIONS The talent raid is already paying dividends. Take Brilliance Auto (CBA ) which has experienced some bumps in the road recently, and last year actually lost money. Quality problems in their vehicle lineup over the last few years led to declining sales for both its minivan and Zhonghua model sedan, but they also helped convince Brilliance top management to hire former Daimler Chrysler research executive Frank Zhao to revamp their product engineering and research and development departments.

Zhao has overseen the creation of a Shanghai design center and an expanded $27 million R&D center at headquarters in Shenyang. As well as doubling the number of engineers to more than 600, Zhao, who now serves as both vice-president of product engineering and general manager of R&D, added entire new divisions to the center, including product development (which before was all done by outside companies) and vehicle engineering.

All of this has allowed Brilliance to deal more quickly with potential product glitches as well as respond to market trends, says Zhao. He cites both the speed with which Brilliance decided on, and then rolled out, lower displacement, gas-conserving models of its latest Zhonghua model, the Junjie. The company also quickly fixed a headlight glitch after discovering there was too large a gap between the light and car frame. "If you don't master the car design, then you just can't fix it. We were relying on foreign companies that were tens of thousand of miles away¡ªthat didn't work when we faced problems," says Zhao.

SPLENDOR ON BACKORDER "The Zhonghua was developed by foreign engineering companies¡ªit was a great package, but when we tried to localize it, we faced challenges," says Zhao. "At the time we didn't have enough engineers to fix the problems we faced."

"Actually, that realization was the original motivation to build this new tech center, and even to bring me back," says Zhao, noting that the Junjie (also known as the Splendor) is now selling so well that there is a 10,000 unit back log of orders from dealers. "We believe the new generation of Zhonghua sedans, Junjie, will be a strong success," wrote JPMorgan in an April analyst report, which also predicted the company will turn around this year.

Meanwhile, scrappy private auto company Geely, run by colorful farmer-turned-entrepreneur Li Shufu, has hired John Wilmer, a former lieutenant governor of California who served under Ronald Reagan, to heads its international operations. Geely is already test marketing its vehicles in Puerto Rico. (Li reportedly had exploratory talks with Murtaugh about hooking up with Geely.)

NOT A CURE-ALL And after joining Geely as vice-president two years ago, Shim Bong Sup, the former Daewoo executive, has overseen a doubling of R&D staff to 600 people, as well as a new emphasis on ensuring quality in the design and production process. "I have helped Geely make a lot of changes in the quality conception in production," says Shim. "For example, when you are styling a vehicle, you have to get others involved¡ªall the related engineers have to participate, to check on the feasibility." Shim says this was not done at Geely before his arrival.

To be sure, conquering the China market, let alone overseas markets, will hardly be easy for the Chinese players, which together have less than one fifth of the mainland sales. There is no guarantee that overseas talent will excel in China, or that U.S.-trained Chinese executives will do well if they return home. "Chinese companies have this illusion that they can cure all their problems by simply importing talent with foreign experience," says Jia Xinguang, a Beijing-based auto analyst. "But there are huge differences in the markets and the levels of development between China and America."

Adds Kenneth Hsu, vice-president for public affairs at Ford Motor (China), "We and GM have tens of thousands of researchers, engineers, and designers in our centers. It will take them a while to catch up." That's no doubt true, but with experienced executives like Murtaugh and others now moving to work for the Chinese upstarts, Detroit and Japan had better take notice.
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Well, mr. H., when you read the interview well, you will find out that it is the point of view of a Mr. Jia Xinguang, who put some interesting remarks at the "China Carmakers Global Talent Hunt" article. That is all there is, not more and not less.

When you say:
"Business Week's second article explains why China's attempt to attract foreign talent is futile and why China won't be a global player."
than you are not quoting the article but saying something completely different.

Probably you are more interested in telling us what you think than what you read.

The quality of the China Car Forum would rise tremendously when you stop doing that.
But the problem is that many talents that have had outstanding successes overseas may not duplicate that in China--China may not provide them the same good environment. So a majority of talents will not produce the same outstanding results here in China as those they earlier produced overseas.
“I’ve been to General Motor’s r&d center in California. I asked them why they chose to set up a center in California. They answered that it was because California has such good weather but also because of the good environment.
“To attract good talent you must face the problem of luring them to difficult, unattractive environments.
“Another issue is this: people working in technology are able to reach very high levels in management at a Ford or at a GM. But in a Chinese company, one has to not only be good at technology but one also must be very good at politics or at being an official. In Chinese auto companies the highest technical position is chief engineer, but one also must be an official from the government to be able to hold that position.
“And there are new problems emerging in this trend of attracting overseas Chinese. People used to think that those who had worked and studied overseas of course, would be real talented people. But recently some people have returned who have faked their achievements. Some of these returnees’ capabilities are just not that good.
"Chinese companies have this illusion that they can cure all their problems by simply importing talent with foreign experience. But there are huge differences in the markets and the levels of development between China and America.
This is the summary of what's said.
Once again...............

Real_I_Hate_China said:

China Hater..............ONCE again you are basically lying and bordering on slander. NEVER ONCE in the article was the word FUTILE used - and the article ALSO never said that China WON'T be a global player!! These are simply YOUR words and your NEGATIVE, INSULTING opinion. Is it going to be a challenge for the Chinese auto companies to integrate foreign talent? Yes (and the word "challenge" WAS used in the article.......several times, I believe). Is it going to be a difficult process for the foreign talent to be utilized properly? Yes. Is it a FUTILE attempt on the part of the Chinese auto companies? NO!! Let's ALSO not forget that this second article is the opinion of ONE MAN (a knowlegable man to be sure........but still just ONE MAN). The FIRST article (which was actually posted here) gives a different picture - and it is a bit "more in depth" as far as researching several auto companies in China and how they are upgrading their process of research, development and production.

The ONLY reason why I continue to spend my valuable time responding to you is that I think it's important that the REST of the members here see WHAT THE TRUTH IS!! I choose to be HONEST - I will readily admit that China has a VERY challenging road to travel when it comes to producing quality, world class cars. They aren't there..........yet. However, they ARE making sincere efforts and are ABSOLUTELY COMMITTED to seeing their vision (developing competitive cars that can be sold world wide) become reality!! I respect their dedication and tenacity - as much as I DO NOT respect your false words and negative insults. If you would simply be HONEST, I think no one here would have a problem with you........but unfortunately you are NOT HONEST - so we DO have a problem with you. Enough said.
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China Hater is nothing but a troll. All he does is add inflammatory comments to start trouble.

There is no doubt China will become a major player in the auto industry. China is a vast country, a growing industrial might, and possibly the world's largest auto market in ten years. There is no way China will be a background player.

China Hater is a delusional lonely psychopath.
some people just cant accept the so called "Chinese Invation" aka Freetrade, and the sky rocketing chinese economy. The chinese were the losers 50 years ago, and no one could face the fact that china is soon going to be one of the winners.
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