1,000 Days in Shanghai

Posth arrived in China with a vision. He navigated a steep learning curve, achieved his goals and now shares an insightful, first-hand account of an intriguing journey that included bumps and highlights. 1,000 Days in Shanghai is a breathtaking manual for anyone contemplating a business career in the increasingly vibrant arena of today's China. It is also a personal account, done with great sensitivity, revealing between the lines a deep respect for the spirit that propels China's social and industrial revolution today.--Hans Michael Jebsen, Chairman, Jebsen and Co., Ltd. To really understand China's economic development, one needs to look at the history of individual projects. This applies in particular to those who are considering a venture on site. This book by Martin Posth is a unique document on the subject: evidence of profound knowledge, didactically sound, with comprehensible conclusions--simply readable!--Prof. Heinrich v. Pierer, Former Chairman of the Supervisory Board, Siemens AG
Former Chairman of the German Asian-Pacific Business Commission
Co-Chairman of the German-Chinese Dialog Forum
This book is a must-read for anyone seeking to work in or via China. The personal experiences of a pioneering manager can also help management to see the transformation of China in a new light. Anybody wanting to be successful in China should heed the practical lessons that Martin Posth draws.--Prof. Dr. Eberhard Sandschneider, Otto-Wolff-Director, Research Institute
Executive Officer, German Council on Foreign Relations (DGAP)
In establishing the Volkswagen works in Shanghai at the beginning of Deng Xiaoping's reform era, Martin Posth made a breach in the wall behind which the People's Republic of China had dug its trenches up until then. His experiences are useful for anyone wanting to work the Chinese market with any degree of success. The fascinating reading that his report makes, and heeding his lessons, can help any entrepreneur to avoid costly mistakes.--Dr. Theo Sommer, DIE ZEIT, Editor-at-Large
For the Chinese, this book by Martin Posth is a historic document on the Open Door Policy for foreign investors. It is a must-read.--Prof. Xu Kuangdi, Mayor of Shanghai 1995-2001, Chairman China Federation of Industrial Economics (CFIE), Co-Chairman of the German-Chinese Dialog Forum

Foreword xi
Preface xiii
Abbreviations xv
Chapter 1: China's Dream of Detroit-Wolfsburg's Gateway to Asia 1
First sight of the factory in Anting 1
History behind the deal 4
Spurned by the Japanese: Citroë n or Volkswagen? 7
Setting the foundation 9
A Volkswagen pioneer for the Middle Kingdom 10
Not a fairyland but an entrepreneur's playground 13
Partnership premier for the group 15
Vision of the future 18
Round the transatlantic world of Volkswagen 21
Quick lessons: Prepare your China engagement thoroughly 24
Chapter 2: Culture Shock-Chaotic Beginnings in Anting 25
Arrival in a strange and fascinating world 25
Living conditions in Shanghai then 27
Piano, ballet in Shanghai, 1, 000 year-old eggs 29
Shopping, haggling, Hollywood at the Bund 31
Fitting derelict buildings with modern machines 32
Santana in China from below zero 34
Mercury rising 36
Delivery kinks 38
The struggle for change 39
Leadership with "scientific management" 41
Model discussions at the dinner marathon: Santana or Audi? 43
Audis battle Santanas on Chinese ground 45
Quick lessons: Avoid unnecessary start-up problems 48
Chapter 3: Talent-The Secret of Our Success 49
Changing a comrade's mindset 50
The forgotten equation 51
Laying the foundation for training 53
Woes of the expatriates 54
Too many Germans 55
Faults and conflicts 56
German expat solidarity 58
Transferring management know-how 59
Dé jà vu 62
Quick lessons: Forget China if you don't have China-compatible staff 64
Chapter 4: Cash Shortages and Risky Financial Maneuvers 65
Messy hand of central planning 65
Budget blowouts and money problems 67
The Chinese accepts higher costs 70
Maiden bonds 73
Quick lessons: Make sure your business in China is profitable 76
Chapter 5: "Big Project" Poker 77
Competition 78
Dr. Hahn's ideas for reinforcing the partnership 78
Building container ships 80
Dealing with Beijing, central government 81
Expedition to SAW in Shiyan 82
China's automobile agenda 2000 84
The curse of waiting 87
An "unofficial visit" to Changchun 89
FAW and Volkswagen 90
Quick lessons: Gain in-depth understanding of the nature of competition in China 94
Chapter 6: Two Partners, One Dream: The Most Modern
Automobile Factory in China 95
Misunderstandings and red tape 95
The battle against mistrust, fear and ignorance 98
The problem with responsibility 100
Big wolf 103
Pioneering work in management 104
Shanghai Volkswagen: Dreaming the same dream? 107
Quick lessons: Create a solid foundation for intercultural cooperation 110
Chapter 7: The Open Secret of the Learning Factory 111
Interesting find 113
Paul's intelligent production design 114
Japanese in Shop 54 115
Capacity limits 117
In search of perfection 119
Introducing market mechanisms at the factory floor 121
How to break the "iron rice bowl" 121
Leadership: Encouraging partners to act 124
Quick lessons: Use your "zero hour" in China 126
Chapter 8: The Joint Venture and Its Parents 127
The genie in our bottle-the spirit of collaboration 128
Loyalties and conflict 130
Principle of consensus versus pressure "from above" 133
Putting forward one voice 135
Clear words from Beijing and an official complaint from Wolfsburg 136
Media distortions 139
Quick lessons: Make sure local management has autonomy to act 142
Chapter 9: The Santana: Trendsetter for Motoring 143
Map to market 144
Of markets and pricing 145
Fighting central planners 146
Advertising cars, the Chinese way 148
The birth of customer service 149
Dream car 150
Dream Ship and a vision for China 151
An Audi flag in Anting and its consequences 152
Surprise session 153
Quick lessons: Identify a specific and direct path to the customer and build on it 154
Chapter 10: The Long March to Localization 155
Fragmented auto supplies industry 156
No compromises 157
Beyond the Bund 158
Pressure for progress 160
Slow breakthrough 162
Rev up from Zhu Rongji 164
Quick lessons: Localization is the key to cornering the market 166
Chapter 11: In The Dragon's Den: Politics in Deal-making 167
Big trouble with the horn and the steering wheel 167
A venture is like marriage 170
Power of Shanghai municipality 171
Shanghai Volkswagen runs out of time 172
Waiting for the carrot, or the stick 174
The end of Luo Pu Road 175
Quick lessons: Secure political support for your project 178
Epilogue: At the End of 1, 000 Days 179
Report card 180
The factory-a role model of modernization 183
Where East meets West 184
Quick lessons: Enjoy sustained profits from your China operations 186
Endnotes 187
Index 189