Maoyuan Hu

Background

Hu was born in 1951 into an ordinary Shanghai family. His father left the family when Hu was ten.

Education

He had to revert mainly to self-learning to finish his high school education. Hu joined SA in 1968 as an entry-level worker, and rose to the posts of vice president in 1983 and president in 1997. In between, he earned a degree from Shanghai Jiao Tong University and a masters from Fudan University.

Career

In the early years, Hu could only afford to ride an old bicycle to commute, even during cold winters, between his home, the factory and the school. Of his first monthly wage of only RMB18, Hu had to find RMB2 per month to pay for his education. Tough living conditions coupled with the exposure to work at the operational level have perhaps given Hu the opportunity to nurture crucial characteristics (for example, a capacity for hard work and a dedication to learning) and organizational skills (for example, communication and problem-solving) necessary for the leadership positions of the later part of his career.

The tractor plant, of which Hu was in charge, reached a remarkable production mile-stone in 1983. Employee accommodation was built at this time, as proposed by Hu, to improve staff welfare. SA at that time also completed the assembly of the first ‘Santana’ unit with Volkswagen. This put an end to China’s history of making cars behind closed doors.

The 1990s marked Hu’s era in Shanghai General Motors. Although he was not involved to a great degree in the SA-Volkswagen venture, Hu was called on in 1995 to lead the negotiations with General Motors on a potential US$1.5 billion joint-venture project to be based in Shanghai. The Shanghai municipal government placed very high expectations on the venture. SA and General Motors have different corporate cultures, and the negotiation process encountered many challenging issues. Hu decisively suggested that the joint-venture entity’s benefits should be above all other participants’ benefits. He and his US counterpart discussed the establishment of some basic communication rules for the workplace, applicable to both Chinese and US employees. Shanghai General Motors generated its first revenue from the ‘Buick’ model in 1998; highlighting the remarkably short time span taken to form and to put into operation the joint venture.

Achievements

• In the first decade of the twenty-first century, Hu’s most noticeable growth strategies for SA have been expansion, internationalization, and brand acquisition. Under his lead- ership SA has made several local acquisitions, such as on Wuling Automobile and Jiangsu Yizheng Automobile, and set up centers in key locations abroad. Hu also engaged SA in acquiring world-renowned car brands. The company acquired a 10 percent share in Daewoo Motor with US$59.7 million in 2002, and took a 48.9 percent stake in Ssangyong Motor in late 2004 with some US$500 million. More recently, SA has been defining its strategic role as a comprehensive investment corporation engaged in advanced manufacturing and modern service. Nonetheless, its withdrawal from the bid for MG Rover in 2005 indicates that the international merger and acquisition process is highly dynamic, and it may not always operate in favor of SA.
  
  SA sold more than 800 000 vehicles in 2004, more than half of which came from its joint ventures with General Motors and Volkswagen. As the global competitive landscape transforms, the company apparently needs to develop its own distinctive brands and R&D capabilities in order to accelerate the development of the Chinese car-making industry. With considerable corporate financial resources in hand, the greatest challenge perhaps for Hu now and for the next decade or so is to develop SA’s own brands and R&D capabilities as a new set of competitive advantages that can position the company favorably against its rivals.

Connections

Hu was married in 1982.