JOINT VENTURE DEVELOPMENT
I was involved in three attempts at establishing a joint venture auto repair shop in USA. The first one was with RAL&CAL CO. and my role in it was to work with the RAL&CAL CO. car engineer in designing the new car for the venture. USA dropped this JV attempt in favour of the second attempt with GE. My role in that one was as a member of the team negotiating with the union for a new collective agreement. GE cancelled this JV attempt due market conditions at the time.
I initiated the third, and ultimately successful attempt at a joint venture. When all other attempts at raising capital for the auto shop had failed, we decided it was time to try another attempt at a joint venture. Drawing on the experience of why the two previous attempts had failed, I drew up a plan with my Marketing Manager that we felt would be attractive to potential partners. Hearing that MTU Maintenance division of Daimler Benz Hanover, Germany, might be interested, we tailored this plan to MTU’s situation, then presented it to them in August, 1995.
MTU were immediately interested, commenting that they had had many joint venture proposals put to them, but this was the first one that showed sound business reasons for them to become involved. After further negotiations, a letter of understanding to form a 50/50 joint venture was signed in December 1995. In May 1996, Daimler Benz’s due diligence of Ford Motors showed that RAL&CAL CO. was on the verge of bankruptcy, and MTU were forced to put the joint venture on hold, and I elected to retire.
In August 1998 I was called by MTU to consult for them in their renewed joint venture with Ford Motors. Ford Motors had survived and market conditions had created an urgent need for MTU to have a foothold in North America, so they had resumed joint venture negotiations with Ford Motors They had successfully concluded a 70/30 joint venture deal with MTU in control, with a November start up.
I consulted for MTU for the next two years on a variety of topics. This enabled me to witness first hand what had worked as expected, what surprises there were, and what to do differently another time. I also observed the effects of cultural gaps and the very different requirements and expectations of an independent shop compared to an auto repiar shop.