As recent events at Shanghai Automotive Industry Corp. illustrate, even China's biggest car maker is not immune. And the lack of an international management team will slow SAIC's realization of its dreams of being China's General Motors.
In late February, SAIC announced that Wang Dazong was leaving to become president of Beijing Automotive Industry Corp. Wang was recruited from General Motors to coordinate SAIC's research institutes. He had much international experience.
SAIC incurred an even bigger loss in September of 2007, when Phil Murtaugh left to become head of Asia Pacific for Chrysler LLC. At SAIC, Murtaugh was executive vice president of overseas operations. Murtaugh was head of GM's China group until he resigned in 2005.
These are not the first defections from SAIC of managers with international experience. A few years ago, it also lost some Chinese managers with engineering degrees from U.S. universities and experience working in the U.S. auto industry who had returned to work at SAIC's research institute.
One reason for their departure was frustration with SAIC's state-owned corporate culture.
These days, the joke among industry executives here in Shanghai is that the Shanghai dialect is the official language at SAIC. Few non-Shanghainese understand the Shanghai dialect.
Some industry executives have, in the past, told me how great the management at SAIC is, what good businessmen they are. I've always maintained that at its heart SAIC is still a state-owned company. It is, after all, owned by the Shanghai government.
SAIC needs to grow beyond that state-ownership if it hopes to be an international player in developed markets. It can't do that without non-home-grown management talent.