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Beyond Branding is written by members of The Medinge Group

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August 01, 2005

To SAIC: look, sunshine, war’s over, you lost 

The Shanghai Automotive Industry Corp. is taunting its other state-owned rival, Nanjing Automotive, saying it will build Rovers before Nanjing does; and continues to cry foul over losing the bid to buy . Comrades, you have a lot to learn about business in the west.
   First, if you are going to make a bid for a company and expect it to be successful, don’t put so many conditions on it. A lack of transparency makes things questionable, and you won’t be favoured.
   Secondly, if you are the party that caused the company to collapse in the first place, by not being able to secure sufficient political favours with the mergers’ committee (the NDRC) back home, then don’t try to ruin it for a competitor that won the bid fair and square.
   Thirdly, you might do well to remember the Chinese concept of “face”, which you’ve obviously forgotten in the confusion Mao created. You lost face when you forced MG Rover to make a fire sale. Your actions afterwards pegged you as corporate raiders, trying to make an easy deal while putting 6,000 Britons out of work. That loss of face is going to cost a lot more than a few million pounds to restore.
   And people ask me why I find dealing with Red Chinese organizations questionable. Here is your highest-profile example of why working in is not what it is cracked up to be, and why you should rely on growth figures put out by the Politburo with the same scepticism PricewaterhouseCoopers had over SAIC’s bid.
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