Interview: Chinese market critical for GM's survival through financial crisis: business leader

It would be harder for U.S. automobile manufacturer General Motors (GM) to survive the 2009 financial crisis if the brand had not founded a joint venture with the Shanghai Automotive Industry Corporation (SAIC), said a veteran U.S. business leader.

The "positive relationship" with SAIC was "critical" in helping GM survive during the sweeping crisis when GM was forced to file for bankruptcy, said Shirley Young, who co-led GM's entry into China in the 1990s, in a recent interview with Xinhua.

"Not only was GM's China sales a large asset for the future, but SAIC also provided a major loan to GM which was later returned when GM emerged from bankruptcy," said Young.

The GM-SAIC SGM (Shanghai GM) 1.57-billion-U.S.-dollar joint venture was the biggest U.S.-China joint venture when launched on March 25, 1997, recalled the 84-year-old business leader.

It was the result of an almost two years competition with all the major international automobile companies from 1995 to 1997, which finally narrowed down to a choice between two American manufacturers -- GM and Ford.

The then GM team was led by CEO Jack Smith and International President Lou Hughes, with Young as Vice President for China Market Development. The team also included many GM employees of Chinese descent.

Young, the daughter of a Chinese diplomat, was born in Shanghai in 1935 but raised in the United States.

A win-win situation is the basis for success and requires both sides to take into consideration each other's goals, she said.

"Looking back, the key to our success was a strategy to focus on true partnership -- based on mutual respect, cultural empathy and a commitment to a win-win solution for both parties," she said.

According to Young, the GM strategy went from focusing solely on what GM wanted to understand what the Chinese side was seeking -- not just a profitable automobile company but a means to build a modern auto industry, seeking mutual benefit and a win-win solution for both partners.

"Our team spent time and effort to understand the Chinese perspective and culture," she said.

As a small example of "cultural empathy," Young and her colleagues realized the importance of food and dining together in Chinese society, and they even found ways to serve Chinese food in their working meetings with partners from China who apparently did not enjoy the U.S. pizza hamburger working lunches.

It was not an easy task in the outskirts of Detroit at that time, she said, however, "this shift in our strategy we later learned was the key to our win."

This attitude of mutual respect, understanding China's cultural differences and seeking a win-win outcome, was carried throughout the SGM partnership at all levels of the joint venture from the very beginning, she said.

"I believe it has been the source of the joint venture's long term success," said Young.

The octogenarian noted that given the importance of the China market for GM today, GM's future strategy and current restructuring has been strongly influenced by China's future automobile plans.

"This includes important consideration of China's future automotive policy including reduction in gasoline engines and increases in electric and self driving transportation," she said.