Chinese aircraft maker to recruit foreign managers
The Associated Press
Wednesday, February 25, 2009
BEIJING: China's main state-owned aircraft maker says it will recruit its first executives from abroad an unprecedented step for the secretive world of Chinese military contractors amid efforts to create a commercial aerospace supplier to compete with Boeing Co. and Europe's Airbus.
Aviation Industry Corp. of China, which makes Beijing's fighter jets, is pushing ahead with aggressive business plans despite global financial turmoil. It got a 176 billion yuan ($26 billion) credit line from state banks in January to develop a 150-seat jetliner. It test-flew a smaller commercial jet in November and is building China's first helicopter factory.
AVIC is looking for vice presidents for 13 subsidiaries who have experience at multinational companies in marketing, research and production, said Ding Zhiyong, a company spokesman. He said most posts were in civilian areas such as helicopters and cargo planes but some were in defense, though he declined to give other details. The company says it plans to formally launch the recruiting efforts Thursday.
Efforts by Chinese companies to recruit executives with foreign experience usually are aimed at ethnic Chinese abroad. However, Ding said, "This recruitment is open to all around the globe."
Foreign skills should help AVIC, now run largely by soldiers and government officials, meet goals that include developing a jetliner by 2020, said Jon Grevatt, the Asia-Pacific defense industry correspondent for Jane's Information Group. He said non-Chinese citizens probably will be kept away from military technology.
"China has very ambitious plans for its commercial and military modernization and it was quite clear that the old AVIC wasn't working properly," Grevatt said. "Having real Western-style project managers in place who are used to driving through such enormous challenges as a large-scale jet airliner is what they are after."
AVIC adds to a growing list of Chinese companies that are hiring executives with experience abroad to fill gaps in skills and experience as they expand into global markets.
Personal computer maker Lenovo Group appointed an American CEO, William J. Amelio, who launched its effort to develop a global brand following its 2005 acquisition of IBM Corp.'s PC unit. Amelio stepped down in December after a three-year stint.
SAIC Motor Corp. hired Phil Murtaugh, formerly in charge of General Motors' China operations, as a vice president in 2006. He left the following year to become chief executive of Chrysler LLC's Asia operations.
The strongest demand is for managers with experience at marketing and research, where Chinese companies lag, said Thomas Zhou, a partner in Shanghai for DaCare Consulting, which finds foreign executives for companies in China.
"This is an easy and quick way they can bring in not only new ideas and innovation but also methodology how to invent the stuff," Zhou said.
Zhou said DaCare places about 300 foreign executives a year in China at levels up to vice president. Most go to foreign-owned operations, but Zhou said the number placed with Chinese employers is expected to rise to 15 to 20 this year, up from single digits in 2008.
"The trend is picking up," he said.
The communist government created AVIC in November by merging its two biggest aerospace companies. It immediately announced initiatives in a sweeping array of areas ranging from jetliners to helicopters.
The company has the advantage that its home Chinese aviation market is one of the world's biggest and fastest-growing. Boeing has forecast Chinese carriers will need 3,400 new aircraft over the next two decades.
An AVIC subsidiary says it plans to develop a 150-seat jetliner to compete with Boeing and Airbus.
In mid-range jets, another subsidiary wants to compete with Canada's Bombadier Inc. and Brazil's Embraer SA. It test-flew China's first fully homegrown commercial jet the 90-seat ARJ-21 on Nov. 28 in Shanghai. The company says China is expected to need 900 such jets over the next two decades, and says it hopes to supply 60 percent of them.
A third subsidiary is building a $1.2 billion helicopter factory in the eastern city of Tianjin and says it should produce its first helicopter this year.
"The speed at which AVIC is trying to, first, come together, but also develop and restructure is quite incredible," Grevatt said.
AVIC might try to recruit managers away from Boeing and Airbus, he said.
"There must be people at Airbus and Boeing that they have in mind when they say 13 vice presidents," he said. "They know there might be people in those two companies who might be willing to step over" to AVIC.
If it hires foreign citizens, the company will face a challenge in making the most of their abilities while keeping them away from military secrets, Grevatt said.
"There would be a lot of dual-use technology," he said. "So it will be very difficult to separate all their secret stuff out."
Associated Press researcher Bonnie Cao in Beijing contributed to this report.