Smart Strategies: Putting Ideas To Work

How did GM succeed where so many others failed? "They have been recognized as a company with shrewd government relations right from the initial negotiations to choose GM over Ford for the first joint venture plant in Shanghai," Hemerling says. Rudy Schlais, the man tapped to lead GM into the Chinese market in 1994, recognized that it was not nearly as important to court the end customer as it was to seek the aid of the Chinese government.

So when presented with the opportunity to meet with a Chinese vice premier in 1994, Schlais leaped at the chance. "I sat down with him and asked, 'GM is late coming to China, what do we have to do to really win?' " Schlais recalls. The official said it was vital to create employment for locals and to help China develop a world-class automotive industry (instead of using the local market as a dumping ground for outdated vehicles and technologies). That insight helped GM win the competition with Ford and Toyota for the coveted right to create a joint venture.

To establish Buick's premium brand image, Shanghai GM again courted the government, selling 35% of its early output as official vehicles. GM's good governmental ties haven't insulated it from all woes in China, including the piracy of one of its Chevrolet models this year. But in 2003, GM China sold nearly 387,000 cars, an astonishing 46% rise over its sales in 2002.