ATG (A): A Chinese Miracle? A Sino-Japanese-Euro Joint Venture

The case describes the creation and development of a joint venture (ATG) in China between a Japanese (Teikoku Piston Ring Co Ltd), a European (T&N plc) and a Chinese State-Owned Enterprise (SOE, APR) company. The JV is set up fast to benefit from central government tax breaks. However, moving into China and turning the SOE into a profitable concern presents some unforeseen challenges over and above the usual ones of a demotivated workforce and run-down machinery. The case follows the problems that emerge within ATG, notably those concerning quality, disappointing sales and lack of marketing expertise. There are also serious managerial differences that arise between the two MNC managers at the top who have different views on key investment issues. In addition the workers resent the new strict regime introduced by the Japanese General Manager and are suspicious of ATG's new profit agenda. Despite these problems ATG is profitable within a year