A groundbreaking ceremony for joint venture company Tianjin Toyota was held in July 2000 under a baking sun, with temperatures soaring to 45 degrees.
Both the heat and friction in factory management greeted Toyota as it was finally making an inroad into China.
Toyota executives had been apprehensive from the start about Tianjin Motor Corp., its joint-venture partner, believing the Chinese automaker lagged as a corporation, especially in terms of efficiency.
Toyota pressed Tianjin to streamline its operations but productivity failed to show improvement.
However, a savior emerged in the form of China FAW Group Corp., the country’s biggest car manufacturer, where former Chinese President Jiang Zemin once worked after receiving training at the Stalin Automobile Works in the former Soviet Union.
China FAW Group took over Tianjin in a buyout in June 2002 and concluded a comprehensive partnership agreement with Toyota, whose rivals once said had “missed the bus” in China but succeeded in eventually getting on a limited express.
Analysts hold different opinions on why FAW, which is based in Changchun in northeastern China and had 120,000 employees as of last year, opted to purchase money-losing Tianjin Motor and enter into the tieup with Toyota.
It is clear, though, that the group, which turns out 900,000 cars a year, wields strong political power and recognized Toyota’s abilities.
Chinese automaking officials, chiefly those of the FAW group, were at a conference room in Toyota’s head office on Sept. 25, 1972.
The visitors and their Toyota hosts were watching a television program showing then Prime Minister Kakuei Tanaka shake hands with then Chinese Premier Zhou Enlai at Beijing Airport.
There was a burst of applause. Members of the Chinese group called Tanaka’s visit to China for the establishment of bilateral relations a historic turning point and said they were pleased to be at Toyota on that particular day.
Eiji Toyoda, company president at the time, responded with a smile.
Li Zhiguo, who was later to become vice president of the FAW group, admired Toyota’s method of running operations in a quest for quality.
Toyota executives have lasting memories of the FAW members’ earnest desire to learn auto manufacturing technologies.
However, relations between the two auto companies were soon blocked by history, as Chinese politics were thrown into turmoil due to various developments.
Contacts with Toyota resumed in the 1980s, and the Chinese government stipulated that auto production would serve as the underpinnings of the nation’s industry.
Toyota’s attention, however, was focused on how to help quell Japan-U.S. trade friction, which had become a major political problem between the two countries.
Toyota centered on pouring people, materials and money into the U.S. market, its “gold mine,” and had minimal opportunity to focus on China.
Li, who had by then become a senior FAW official, invited a Toyota executive to Changchun and broached the idea of working together to produce automobiles.
The executive responded with a remark that froze the atmosphere of the meeting. “I would like to work like Mantetsu,” he said.
Mantetsu was an acronym for the Japanese words for Southern Manchurian Railways, a semiofficial company Japan set up to run railways and subordinate businesses Japan got from Russia following the 1904-1905 Russo-Japanese War.
The Toyota executive’s response to Li was meant as a message that Toyota was so busy with Japan-U.S. trade friction that Toyota-FAW negotiations would be useless.
Li got the point, negotiations broke down and relations between the two companies chilled.
It took quite a while for Toyota’s top executives to realize that the confrontation with the FAW group was tantamount to a confrontation with China itself.
Toyota was apparently China’s favorite at the dawn of its age of motorization.
However, unlike Tanaka, Toyota had little leeway to actually “dig a well,” a euphemism for those striving to establish friendly ties with China.
It subsequently took more than 20 years for the lines linking Toyota and China to cross once again.
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