In February 1991, Volkswagen signed its second Chinese joint venture deal with First Automobile Works (FAW) in frigid Changchun in Northern China. This deal, and the older JV with SAIC turned into the cornerstone of Volkswagen’s world domination plans. In no country does Volkswagen sell more cars than in China – and it wants to double the current number in a few years. Written for a 25 year term, the joint venture with FAW would end in 2016. It won’t. It has been extended for another 25 years.
The old contract is still good for a few years, so why the rush? Well, there was that other matter. In summer, there were reports about FAW purloining plans for an engine and a transmission. The matter made big waves in Germany, and ripples in China.
Today, Reuters was told that everything is fine, that the couple will stay married for another 25 years, and that they will spend $12.56 billion in China between 2013 and 2015. Reuters was also given a terse statement to the effect that neither of the venture partners had infringed on one another’s rights in the past years.
This comes after Volkswagen CEO Martin Winterkorn and FAW-CEO Xu Jianyi had a meeting, and came to the conclusion that a little adultery should not stand in the way of a mutually beneficial marriage.
I can only imagine how the discussion went:
Xu: “Our contract expires in 2016.”
Winterkorn: “Does it really? Time flies.”
Xu: “You want another one?”
Xu: “What about those patents?”
Winterkorn: “You also want to do it again, don’t you?”
Xu: “You devil.”
Winterkorn: “Patents? What patents?”
Xu: “Got a pen?”