One Billion Customers - James McGregor [84]
Few of his executives shared Brizendine’s enthusiasm. At best they were intrigued, but cautious. Nixon’s groundbreaking China trip in a Boeing 707 had instantly made Boeing the preferred supplier and market leader for commercial aircraft in China. A joint venture in China might break Boeing’s lock on that market. Among all the skeptics, one voice was enthusiastic. China had abundant scientific and engineering talent, Gareth Chang told the other executives, and it had a rudimentary aircraft manufacturing industry. The joint-venture idea was very promising, he said, but he warned against being too optimistic. “We’ll be lucky to be able to build ten airplanes a year,” he predicted.
That was good enough for Brizendine. Gareth Chang quickly emerged as the company’s China expert. He had left China at the age of six when his father, a Nationalist Party police official in Shanghai, fled with the family to Hong Kong as the Communists seized power. Now handsome, poised, and articulate, Chang certainly had the look and bearing of a young Chinese ambassador or executive. If his McDonnell Douglas colleagues thought he was a China expert, then he’d be a China expert.
The proposal that McDonnell Douglas sent to China was mostly a general outline of how McDonnell Douglas made airplanes. It suggested that a China coproduction facility could start by assembling kits of parts that would be sent from Long Beach. The group drafting the proposal knew it had to focus on two realities: China would have to commit to purchase enough airplanes for the deal to make economic sense, and McDonnell Douglas would have to be prepared to license significant technology to China.
The proposal promptly disappeared into the Chinese government’s labyrinthine bureaucracy. Only after two years of silence did a fax appear from China asking to begin talks. Suddenly the scramble was on. Ideas were being passed back and forth when Chinese Premier Deng came to the United States in 1979 on a groundbreaking state visit to mark the resumption of formal United States–China diplomatic relations. China had just ordered three Boeing 747 airliners and Deng had requested a tour of the massive 747 production line in Seattle. Chang was crushed. Boeing was becoming more deeply entrenched in the China market.
China followed Deng’s trip with a delegation of thirty officials and industrial bureaucrats who toured the United States for a month, looking for business opportunities and studying American capitalism. Chang deftly maneuvered to make himself a coordinator of the second visit, working out details between the State Department, Commerce Department, FBI, and Chinese organizations. The Chinese delegates had naïvely planned to play McDonnell Douglas and Boeing off against each other and head home with a letter of intent for airplane coproduction in China. They didn’t realize the time and effort that American companies put into such complex deals and they went home empty-handed. They did, however, return to China with Chang’s assurances that McDonnell Douglas was eager to become a partner.
Convinced that China was a huge opportunity, Chang headed there to push things along. He found a warm reception. Most of China, especially military bases and factories, was still closed to foreigners, but Chang was escorted to a dozen of the military’s aircraft factories. They were all the same, fashioned from the Soviet industrial cookie-cutter mold in the 1950s. Behind high walls guarded by soldiers, Chang saw sprawling compounds replete with schools, hospitals, worker housing, and dozens of huge but tattered buildings housing dusty machine shops and airplane assembly areas.
As he visited the plants, Chang was delighted to discover groups of English-speaking engineers who had been educated at MIT, Princeton, Harvard, and other top universities prior to 1949. They were excited about the prospect of building modern airplanes. Chang also became a popular tutor on the American system for senior Chinese officials. In