The sensational "Jeep Storm" alarmed the central high-level, and Hu Yaobang personally gave instructions to deal with it

The sensational "Jeep Storm" broke out

In July 1984, when reform and opening up had just begun in China, Chen Muhua, then state councilor and minister of economic and trade affairs, visited the United States and visited the famous American jeep manufacturer, the American Automobile Corporation (AMC). The owner invited Chen Muhua to visit their newly put into production XJ model and the derived YJ series, which was later popular in China. The 2.5-litre displacement, four-cylinder Cherokee Jeep was world-class in design and technology. Chen Muhua greatly appreciated it after reading it, and after returning to China, he sent the director of the foreign investment bureau to the first automobile joint venture in the country, Beijing Jeep Company, to understand the situation, hoping that Beijing Jeep Company would introduce the XJ series jeeps that had just been put into production in the United States at the end of 1983. Chen Muhua also transferred a sapphire blue Cherokee given to her by the American Automobile Company to the Beijing Jeep Company for a sample car. Beijing Jeep Company is very interested in the production of this 2.5-liter displacement, four-cylinder engine jeep, in order to open the market also sent people to seek the opinions of various state agencies, including the military, everyone unanimously hopes to introduce the most advanced XJ system model of the American Automobile Company, which can be used as a high-end official car, and then after localization, the second generation of military vehicles will be carried out to improve the handling and comfort of military jeeps.

In October 1984, the special board of directors of Beijing Jeep Company was held in Detroit, USA. The special board of directors proposed to cancel the original agreed joint design in the strategic development of the joint venture, and the future product direction is to introduce the American Cherokee XJ technology, and the model is set to BJ-X213. Because the new model has high requirements for production technology and supporting manufacturers, the domestic short period of time can not reach the technical standards, so the board of directors decided to first adopt the CKD form (that is, the whole vehicle is disassembled into China and then fully assembled), and then gradually realize localization after becoming familiar with the new technology of american automobile companies.

On September 26, 1985, the first batch of Cherokee assembled in the form of CKD by Beijing Jeep Company cut the ribbon five days ahead of schedule, setting a precedent for the production of Cherokee outside the United States. Chen Muhua, Duan Junyi, Rao Bin, Jiao Ruoyu, Zhang Peng, Zhang Jianmin and other leaders attended the ribbon-cutting ceremony. The first Cherokee was named "Beijing JeeP," and American Auto Company bought the first car to give to the Beijing Municipal People's Government.

The matter was widely reported by domestic and foreign media, and the news was broadcast during the prime time of the Detroit television station in the United States that night. The incident also attracted a visit to China by a major American politician and a visit to Beijing Jeep Co., Ltd., us Vice President George W. Bush on October 15, 1985. On this day, accompanied by the Ministry of Foreign Affairs and the leaders of the Beijing Municipality, Bush came to Beijing Jeep Automobile Co., Ltd., a Sino-US joint venture, with great interest, to visit the production line and take a group photo with the employees. In order to show the sincerity of the cooperation between the two sides, the Beijing Municipal Government presented the Cherokee of great significance to the mayor of Washington City, Marion Bally, who accompanied Bush on a visit to China, and later participated in the 200th anniversary of the founding of the United States, and was later collected in the Washington Museum.

The Good Start made the U.S. side very excited, and the U.S. side proposed to assemble 4,000 Cherokee vehicles in 1986, 7,000 vehicles in 1987, and 10,000 vehicles in 1988. This is certainly a good thing, but the U.S. side did not understand that China's planned economy was dominant at that time, and that increasing production involved foreign exchange quotas and import licenses, and required the approval of the Chinese government. During this period, due to the tight foreign exchange reserves of the country, the State Council repeatedly required strict control of car imports, including assembled cars in the form of CKD (imported parts). The sensational "Jeep Storm" broke out.

The letter from the general manager of the US side alarmed the central high-level, and Hu Yaobang gave instructions

After the first batch of 720 Cherokee parts arrived at the company, they were finished in more than three months. The second batch of 1,008 bulk parts was immediately loaded from the United States to China in container configuration. However, China's domestic import licenses, letters of credit, foreign exchange, tariffs, etc. did not match the joint venture enterprises, resulting in 1,008 Cherokee jeep piles at the port can not be cleared. This not only caused serious losses to the US side in terms of warehousing, loading and unloading, interest, but also caused the fledgling joint venture, the Sino-US joint venture Beijing Jeep Company, to "stop work and wait for materials".

In November 1985, Qu Mo, the far eastern manager of the American Automobile Company, came to China urgently to seek to solve the permit problem, but failed to do so. Immediately after the US personnel returned, they held a press conference to announce that the US automobile company was preparing to "stop three stops" (stop capital investment, stop technology transfer, and stop technical training) and "one withdrawal" (to remove US experts). This has caused the production and operation of an enterprise to rise to a diplomatic dispute with political overtones, which has been reported by major media in the world, and some Western politicians even suspect that China's reform and opening up has stagnated.

At the beginning of February 1986, Claire, vice president of American Automobile Company and vice chairman of Beijing Jeep Co., Ltd., came to Beijing, and the Chinese directors stated that they had no right to make decisions on the license issue, so the two sides talked for 6 days about localization, technological transformation, technical training and other issues, but the issue of license was still not solved. On February 19, Vice President Foley, the third-in-command of the American Automobile Company, came to Beijing, and after talks with the Chinese side, he expressed concerns about the future of cooperation between the two sides and submitted a memorandum to temporarily suspend various investment budgets of the manager's department.

After several fruitless discussions, on February 21, The Chairman of the American Automobile Company, Dewa, published in the American "Automotive Industry" magazine "Is China's Cherokee going to stop production?" The article expressed dissatisfaction with China's attitude, saying that China's violation of the agreement has caused losses to the US side. Subsequently, the company's project manager Bruces sent a telegram to the Chinese side, saying that the time for the Chinese trainers of Beijing Jeep Company to go to the United States was postponed before the problem was solved. The US side even told the Chinese directors that it would stop production for 6 months and transfer back all US experts. Mainstream MEDIA in the United States, such as the Washington Post, The New York Times, and The Christian Science Monitor, have made extensive reports on Sino-US cooperation disputes. For a time, the CKD crisis in Beijing Jeep became an international event that was constantly heating up. But in China, there are not many media reports, and the incident still stays at the corporate and economic levels. Although American car companies have made a lot of noise in the United States and introduced a series of tough measures, they do not want to lose the Hard-to-Open Chinese Market. In particular, Mr. St. Pierre, who was the general manager of Beijing Jeep at the time, really wanted to keep this hard-won joint venture, Beijing Jeep Company. This is his career and his job.

Most crucially, Mr. St. Pierre knew China's national conditions better than his counterparts in the United States, and in the absence of results in seeking a solution to the amount of foreign exchange through various channels, on March 14, 1986, he wrote a letter to Hu Yaobang, then general secretary of the CPC Central Committee, hoping that The highest level of China would attract attention. "Joint ventures are a new concept in China and will face great challenges in the early stages," he wrote in the letter. We are one of the pioneers of joint ventures, so we first encountered difficulties related to joint ventures. The outcome of our failure will be very negative for China's existing and future joint ventures. The Chinese government will also be unable to bear the impact of the failure of this joint venture on the opening up and joint venture policies that China is pursuing. ”

After reading the letter written by Mr. St. Pierre to himself, Hu Yaobang, general secretary of the CPC Central Committee, gave instructions in an internal reference: "This matter should be treated from the high plane of the decision-making and credibility of safeguarding China's foreign relations, and we should ask the Economic Commission to help resolve it, and the joint venture enterprises that have already been jointly invested should not easily bring them to business."

The leaders of the State Council also gave instructions on this matter, asking the relevant departments to implement the spirit of General Secretary Hu Yaobang's instructions and conscientiously handle the problems arising from the Beijing Jeep. The State Council also instructed Zhu Rongji, then vice chairman of the State Economic Commission, to personally handle the matter. After accepting the entrustment, Zhu Rongji immediately sent someone to seriously investigate the matter, and on May 8, 1986, he personally met with Claire, vice president of the American Automobile Company and vice chairman of the Beijing Jeep Company.

Zhu Rongji personally supervised and supervised, and the Beijing Jeep storm finally settled

Zhu Rongji told Claire: "The Chinese government has always supported The Beijing Jeep Company, which was the case in the past and is still the case. The Chinese government has always paid attention to credibility and abided by contracts, and there are objective reasons and subjective reasons for the current difficulties of Beijing Jeep. The objective reason is that in the past year or so, China has made rapid strides in the reform of the economic system, and it has been shaken by the lack of experience... As for the subjective reason, if your business strategy has not adapted to this change, you should study and adjust your business strategy with your Chinese colleagues. ”

Zhu Rongji also expressed dissatisfaction with the US automobile companies' unilateral exposure of the US media: "I think that in order to create a good atmosphere, during the negotiations, we had better be silent with the media and wait until we have reached an agreement before jointly releasing it."

Claire thanked Zhu Rongji for his appointment, promised that the US side would no longer express its opinions to the media alone, and expressed confidence in the final solution to the problem.

Under Zhu Rongji's personal arrangement, Claire led the delegation to carry out negotiations with relevant Departments of the Chinese Side. In the negotiations, the US side advocated that Beijing Jeep multi-install CKD form Cherokee, assembling 40,000 vehicles in 5 years. China said that due to the country's macro-control, BJC itself could not reach the foreign exchange balance as scheduled, and could not afford to pay the CKD payment of US$520 million. The U.S. delegation then lowered the number of assembled Cherokees, but the Chinese still could not accept it, so the two sides continued negotiations.

Zhu Rongji has been paying close attention to the negotiation process from beginning to end, listening to reports and giving instructions on many occasions, demanding patience and ensuring that the negotiations reach a satisfactory result for both sides. Under the direct guidance of Zhu Rongji, after five days and five nights of arduous negotiations, After five days and five nights of arduous negotiations, At 3 p.m. on May 13, an agreement was finally reached that by 1990, Beijing Jeep would produce 12,500 CKD Cherokees.

At this point, the Beijing Jeep storm has finally settled. On the same day, the world's media reported the final result of the incident. The names of Hu Yaobang and Zhu Rongji have also been mentioned many times in many reports, especially Zhu Rongji's boldness, ability, and efficiency in handling crises have been highly appreciated by foreign media.

Although the "Jeep Storm" has been properly resolved with the intervention of China's top level, the "Jeep Storm" has exposed many problems in the management of foreign investment at all levels in China, especially the lack of laws and regulations, and when special problems are encountered, the competent departments at all levels cannot effectively deal with them. Zhu Rongji pointed out: It is necessary to revise and promulgate as soon as possible the measures for the management of foreign investment that suit the new situation of reform and opening up, because it is impossible for a high-level person to coordinate everything.

When listening to the reports of relevant departments on the handling of the "Jeep Storm," General Secretary Hu Yaobang, in addition to expressing appreciation for Zhu Rongji's ability to handle the crisis, also reflected on the "Jeep Storm" itself. He said that if the central government had not received a letter from the foreign general manager of the Jeep Company and taken measures in a timely manner, the "Jeep storm" might still be spreading. Hu Yaobang demanded that relevant departments must learn lessons to prevent the recurrence of such incidents.

At the suggestion of Hu Yaobang, the State Council quickly issued and revised more than 20 policies and regulations on promoting the development of joint venture enterprises after research to adapt to the new situation of joint venture development in China. In this sense, the "Jeep Storm" eventually changed from a negative factor to a positive factor.

——Excerpted from the first issue of "Party History Bocai", 2016