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American Wheels, Chinese Roads: The Story of General Motors in China [Kindle Edition]

Michael J. Dunne
4.0 out of 5 stars  See all reviews (2 customer reviews)

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Book Description

How could one company—General Motors—meet disasteron one continent and achieve explosive growth on another at thevery same time?

While General Motors was hurtling towards bankruptcy in 2009,GM’s subsidiary in China was setting new sales and profitrecords. This book reveals how extraordinary people, remarkabledecisions and surprising breaks made triumph in China possible forGeneral Motors. It also shows just how vulnerable that winningtrack record remains. 

No small part of GM’s success in China springs from itsmanagement of shifting business and political relationships. InChina, the government makes the rules for—and competesin—the auto industry. GM’s business partner, the Cityof Shanghai, is both an ally and a competitor. How does such anunnatural relationship work on a day-to-day basis? Where will it goon the future?

General Motors also engages in constant battles with other globaland Chinese car makers for the hearts of demanding Chineseconsumers. Dunne gives us rare glimpses into the mindsets andbehavior of this new moneyed set, the worlds newest class ofwealthy consumers.

China is already the number one car market in the world. Duringthe next ten years, China will export millions of cars and trucksglobally, including to the United States. American Wheels,Chinese Roads presents readers with fascinatingillustrations of what to expect when Chinese cars, companies, andbusiness people arrive on our shores. 

 



Product Description

Review

Who knew that the infighting among fiefdoms within General Motors was topped only by the economic tug–of–war between China′s central and regional governments? Well, Michael Dunne knew. China and GM created mutual automotive prosperity almost despite themselves and here is the story, rich with hilarious anecdotes and surprising insights. This book is essential reading, and fun reading, for anyone interested in modern China or international business. — Paul Ingrassia , Pulitzer prize winning author and Deputy Editor–in–Chief, Reuters News GM and its Chinese partner, Shanghai Auto, have made billions in profits building Buicks and Chevrolets. But the road to success has never been smooth. Michael Dunne puts readers into the scene to witness both GM′s soaring triumphs and bitter setbacks. This book reveals Michael′s remarkable sense for how China works and how business there really gets done. — Jing Ulrich , Managing Director & Chairman of Global Markets, China, J.P. Morgan Michael Dunne – raised in Detroit, educated in Chongqing, sometime resident of Shanghai, Bangkok, and Jakarta has one of the most unusual profiles in the automotive world. He also has a knack for being in the right place at the right time. As an analyst he witnessed the great Chinese car boom of the past decade, and here he tells the fascinating story of how General Motors, despite its troubles at home, gained a foothold in the People′s Republic. — Peter Hessler , Author of Country Driving and Staff Writer at the New Yorker magazine If you have any intention of doing business in China, then this is a book that you must read. You don′t have to be General Motors to understand the complexities of their society. You don′t have to be General Motors to figure out how to do business and succeed in the toughest market in the world. Dunne lets you learn all that General Motors has learned without any of the pain and suffering and bleeding. — Keith Crain , Editor–in–Chief, Automotive News I′ve shared many experiences with Michael Dunne on the front lines of China, and Michael knows China and the automobile market unlike anyone else I′ve met. His personal adventures and experiences give him a brilliant insight into an American icon′s journey into China. He chronicles it with intrigue, analysis, drama and humor. You can′t put it down! — James D. Power IV , Former Executive at J.D. Power and Associates and Co–author of Satisfaction: How Every Great Company Listens to the Voice of the Customer Michael Dunne has done a superb job of chronicling and analyzing the very important and complex business story of GM in China. He has done this based on his boots on the ground experience of many years in Middle Kingdom and his great depth of understanding of the global auto industry. As we increase the speed of globalization, it is imperative to understand the many complex issues involved from the importance of personal relationships to understanding diverse cultures to even have a chance for success. The deep insight into the high stakes drama in the GM China story reaches well beyond the auto industry and, perhaps, well beyond China. Consequently this is a must–read for all who are involved in global commercial activities. — David Cole , Chairman Emeritus, Center for Automotive Research American Wheels, Chinese Roads is a fascinating portrait of GM ′ s rocky road to success in China. Author Michael Dunne takes you on a wild ride, chronicling the failures, the successes, and the sheer random luck of an American company trying to seal the deal with the Chinese. Dunne′s access is unprecedented, his sources second–to–none. This is a book not only about the transformation of an American icon, but about China, revealed in all its complicated beauty. — Rob Schmitz , China Bureau Chief, Marketplace/American Public Media

From the Inside Flap

How could one company—General Motors—meet disaster on one continent and achieve explosive growth on another at the very same time? While General Motors was hurtling towards bankruptcy in 2009, GM′s subsidiary in China was setting new sales and profit records. This book reveals how extraordinary people, remarkable decisions and surprising breaks made triumph in China possible for General Motors. It also shows just how vulnerable that winning track record remains. In no small part does GM′s success in China spring from its management of shifting business and political relationships. In China, the government makes the rules for—and competes in—the auto industry. GM′s business partner, the City of Shanghai, is both an ally and a competitor. How does such an unnatural relationship work on a day–to–day basis? Where will it go in the future? General Motors also engages in constant battles with other global and Chinese car makers for the hearts of demanding Chinese consumers. Dunne gives us rare glimpses into the mindsets and behavior of this new moneyed set, the world′s newest class of wealthy consumers. China is already the number one car market in the world. During the next ten years, China will export millions of cars and trucks globally, including to the United States. American Wheels, Chinese Roads gives readers fascinating illustrations of what to expect when Chinese cars, companies, and business people arrive on our shores.

Product details

  • Format: Kindle Edition
  • File Size: 877 KB
  • Print Length: 227 pages
  • Publisher: Wiley; 1 edition (20 July 2011)
  • Sold by: Amazon Media EU S.à r.l.
  • Language: English
  • ASIN: B005FMLNNG
  • Text-to-Speech: Enabled
  • X-Ray:
  • Word Wise: Enabled
  • Average Customer Review: 4.0 out of 5 stars  See all reviews (2 customer reviews)
  • Amazon Bestsellers Rank: #400,147 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Most Helpful Customer Reviews
4.0 out of 5 stars How it was 23 Feb. 2013
Format:Kindle Edition|Verified Purchase
An interesting and valuable record of how things were, with access to high-level details that many who were there at the time would not have known about. I could have wished for some more "war stories" of the strange and ridiculous events that differing cultures inflict on each other when they try to work together, perhaps that will be another book as this one prompts memories to re-surface.
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4.0 out of 5 stars Entertaining read 2 Oct. 2013
Format:Hardcover|Verified Purchase
The story of how GM established itself in China is very entertainingly presented, an easy read. It also provides insights into the mentality of the Chinese, familiar and recognizable to those that have experience working there, and illuminating to those that haven't.
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Amazon.com: 4.8 out of 5 stars  26 reviews
5 of 5 people found the following review helpful
5.0 out of 5 stars Interesting Insights into How China Manages its Businesses 17 Aug. 2011
By Loyd E. Eskildson - Published on Amazon.com
Format:Hardcover
'American Wheels, Chinese Roads' is essentially a chronological accounting of G.M. in China. The story is interesting because it is well told, explains how G.M.'s China subsidiary set sales and profit records while the parent company raced towards 2009 bankruptcy, and offers insight on how China manages foreign businesses.

G.M.'s partner in China is a subsidiary of the City of Shanghai - SAIC (Shanghai Automotive Industrial Corporation). SAIC also competes with G.M. in China by partnering with VW to produce a 1984-design VW Santana, and producing its own brand - Roewe. All three product lines are built in Shanghai.

G.M. began pursuing production in China in 1989; in 1999 SAIC-G.M. began production. In between, the Chinese played G.M. and Ford against each other; ultimately SAIC was persuaded by Buick's prior luxury image and G.M.'s history of local management at its Brazil plant. G.M. now competes with 50 other car-makers for the 11 million or so cars sold (2010), up from 640,000 in 2000. SAIC-G.M. built over 1 million cars that year (more than G.M. in the U.S.), and reaped almost $1 billion in profits.

Author Dunne tells readers that everything in China starts with a license - to build cars, sell cars, import product, export product, change yuan into dollars, become listed in a stock exchange, etc. To get a license, foreign firms must first get a partner - usually a city or provincial government. Shanghai requires at least $140,000 in capital funds from foreign companies to be deposited in a bank, where it remains until the enterprise is formally closed and any audits completed. Shanghai takes half the profits from SAIC-G.M. manufacturing, as well as half of service profits as well, for products jointly developed. As of 2010, Shanghai had the highest minimum wage - $164/month, plus pension, housing, medical care, and unemployment insurance. Locales an hour away have a $105/month minimum wage.

These business licenses are not permanent - thus, companies are always on a short leash that requires them to continually be useful to the government. (No "What's good for General Motors is good for the country" here!) Example: Every taxi in Shanghai is a VW Santana. Taxi operators don't have to buy a Santana, but doing so helps insure license renewal. Similarly, In Beijing, the taxi fleet is dominated by Hyundai Electras (the Chinese partner must have at least 50% ownership, and is always listed first), built by Beijing-Hyundai. In Wuhan, the taxi fleet is made up of Citroens, made there. There are now six major 'Detroits of China,' and many minor ones. Partnerships with foreign brands comprise 70% of sales; 95% of cars sold in China are made in China - imports are hit with a 150% tariff.

G.M.'s first venture in China was a disaster - building S-10 trucks with old equipment for a market generally unable to afford them. The Cadillac CTS flopped as well - too small, gas-guzzler. The 'good news' for G.M. is that Ford and VW were inattentive, Japan (Toyota) and China have long-term animosities - leaving G.M. an opening. G.M. then bought back bankrupt Daewoo (Korea) that it formerly owned for $400 million cash to get its small car expertise to design vehicles for the Chinese market. Found that roomy vehicles with small (1.2 or 1.4 liter) engines and fancy interiors were the most popular.

Chery Auto in China made a near perfect replica of the Chevy Spark 6 months ahead of Chevy and for 20% less - Dunne believes former Daewoo employees sold the drawings to Chery --> 'QQ' model that sold 5X as well as the Spark. Chevy's latest China product, Sail, was developed by Shanghai-G.M., with no royalties, etc. owed G.M. There now are only 45 Americans employed at Shanghai-G.M.

Subsequent to Dunne's book, Automotive News China reported that SAIC-G.M.-Wuling (the latter being a new 5.9% partner;SAIC has a 50.1% share, G.M. 44%) will start building Chinese-designed 5-seat and 8-seat microvans shipped as kits from China. They will be sold in India under the Chevrolet brand, instead of the Wuling brand as they are in China. Starting price will be at $7,000. The group is already China's largest microvan producer. The price in China is $4,400 - recently dropped because of a sales slowdown due to government ending its stimulus programs and local authorities restricting purchases to curb highway congestion; about $138 in profit is earned for each vehicle, per J.D. Power.

A Note of Warning: Dunne's material is informative and interesting; however, he's a bit loose in how he framed some of his statistics on costs, profit- and revenue-sharing, etc. and one should be leery in taking all of them literally.
6 of 7 people found the following review helpful
5.0 out of 5 stars Reads like a good novel 16 Aug. 2011
By befreeworld - Published on Amazon.com
Format:Hardcover
While the story of GM in China might not appeal to everyone, this book surely will. The book is a well written novel with an eccentric cast of characters. I found myself laughing out loud at least once every chapter and simply couldn't put it down.

The book is filled with stories and anecdotes about doing business in China that are both hilarious and educational.

"Chinese people are very careful with accounts. They watch the money. Someone has to pay for things, and the Chinese always prefer that someone to be someone else.

'Keep the Change,' an expression so familiar to Americans, would sound naive or idiotic (or both) to the average Chinese. To them, money is still a scarce resource. You don't just let someone keep the change."

It is very refreshing to hear the story not from an academic perspective, but from someone who speaks and reads Chinese and has built and operated a business in China and S.E. Asia for over 20 years. The book screams of the challenges, pain and daily grind of building a business in China. From the day you hail a taxi, to navigating the government regulation to the endless changing of the rules and goalposts, Mr. Dunne describes competing inside China as "a street fight with a veneer of civility". Anyone who has never done business in China will find themselves saying over and over and over again "That doesn't seem fair."

The U.S. Government should read Mr. Dunne's three policy recommendations with regard to the Chinese selling their cars in America.

Will GM prevail in the long run? (I sincerely doubt it - but I look forward to reading the follow-up).
3 of 3 people found the following review helpful
5.0 out of 5 stars Don't get out of the elevator! 12 Sept. 2011
By W. Small - Published on Amazon.com
Format:Hardcover
What a great read! Michael Dunne knows his stuff, and the stories and anecdotes that he uses to bring this General Motors in China story to life will keep you laughing, nodding in agreement or shaking your head in despair. Whether you are interested in GM or China, Dunne will tell you a story that reads like both a novel and a cautionary tale. And if you have any concern about the future of the US and China, well, you will find those fears well grounded here - the US and China are locked in firm embrace that may not be a loving one, but may well be `til death do us part.

So when Dunne uses a fabulous anecdote to exhort us not to get out of the elevator, anyone who wants to do business in, or simply understand China should listen.
5 of 6 people found the following review helpful
5.0 out of 5 stars Now I know 14 Sept. 2011
By Gino - Published on Amazon.com
Format:Hardcover|Verified Purchase
BEING FROM DETROIT I WAS WELL AWARE OF THE TROUBLES GENERAL MOTORS WAS FACING IN THE AMERICAN CAR MARKET. SALES WERE SHRINKING, PROFITS DISAPPEARED, AND FOREIGN CAR COMPETITION WAS GETTING STRONGER EACH YEAR.

YET, AT THE SAME TIME, GM WAS CREATING A HUGE SUCCESS WITH ITS FLEDGING CAR VENTURE IN THE PEOPLE'S REPUBLIC OF CHINA.

HOW COULD THIS BE?

I FOUND THE ANSWER IN MICHAEL DUNNE'S BOOK, AMERICAN WHEELS.....

THE CONTRAST BETWEEN THE GM'S CHINA PERFORMANCE AND THE HOME TEAM'S EVENTUAL BANKRUPTCY IS BRILLIANTLY PRESENTED. AN EXCEPTIONALLY EASY READ, THAT TAKES THE READER FROM AN EARLY DISASTER (TRUCK TOO BIG, TOO EXPENSIVE) TO TODAY'S PLACE AMONG CHINA'S SALES LEADERS.

LIKE ANY GOOD STORY, MR. DUNNE OFFERS A SURPRISE AT THE END: WITH ALL THE STARS POINTING IN ITS FAVOR, DID GM GIVE AWAY ITS CHINA ADVANTAGE?
2 of 2 people found the following review helpful
5.0 out of 5 stars A Thought Provoking Perspective on China, and America 2 Sept. 2011
By jbonnell11 - Published on Amazon.com
Format:Hardcover
Our recent financial crisis revealed a disturbing fact about us Americans: We are a lot less market-oriented than we claim to be. In American Wheels, China Road, Michael Dunne, reveals an equally disturbing fact: Our American political/economic system is a lot closer to the Chinese communist system than we care to admit.

The revelation may be inadvertent. On the surface it doesn't seem Dunne's purpose is to compare the systems of the two countries. His focus is on the trials and tribulations of foreign companies entering the complicated, protected and rapidly developing China automotive market. But there is a deeper message to his book.

Dunne's book speaks directly to the sheer irony that in 2009, General Motors, born of the American capitalist system, was going broke at home and leaning increasingly on the American government for survival, while at the same time, thriving in China thanks in large part to its partnership with a communist-run State Owned Enterprise.

Using General Motors' experience in China as a medium and relying on a deft understanding of Chinese history and culture, Dunne does a nice job of describing the competitive landscape that is China. He tells of how General Motors stepped out of character, went to China and successfully played the Chinese game, which Dunne describes as cleverly rigged in favor of the Chinese.

American Wheels, Chinese Roads forces readers to ask themselves, why do we let the Chinese rig the game? Why not play the game by international rules? And what the hell is going on in America that we can't make cars without government help?

It all makes for terribly interesting, thought provoking reading.

Dunne concludes that GM, along with many other companies, may be a little naive playing the game in China by Chinese rules. Though American media regularly report on the success GM has accomplished in China. Dunne raises the caution flag. By bringing to life the Chinese mind set and political landscape, Dunne tells readers that winning the China game in the long run will require playing the game by different rules. And refreshingly, he offers advice on how to affect change.

Dunne has written a very good book on China, which will not come as a surprise to anyone that has followed his articles on China over the years. His writing style is direct, engaging and humorous. His book unfolds through a series of anecdotes that together tell the story of doing business in China, while revealing some fascinating stuff, about General Motors in China, and about our beloved American system.
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