Cao Side, Vice President of Cummins Group: "Finally, Lifetime" with Chinese Partners

Steven M. Champman, Vice President of the Cummins Group, the world's leading power solutions provider, is in charge of business in China and Russia. He had promoted several joint venture projects between Cummins in China and Russia, and Liugong Machinery, Dongfeng Automobile and Beiqi. Futian and other Chinese partners have long maintained close cooperation. In view of Cao Side's contribution to Beijing's economic construction and social development, the Beijing municipal government awarded him the Great Wall Friendship Award of the Beijing Municipal People's Government for the period 2011-2013. In recognition of his outstanding contributions to the Chinese engine and related industries, Cao Side won the Chinese Government Friendship Award in September 2016. In March 2016, Cao Side won the right of permanent residence in China. In April 2018, he was awarded the most influential foreign expert on the 40th anniversary of reform and opening up.

Cummings Group Vice President Cao Side

My fate with China can be discussed from 1973. That year, I was studying for a degree in Asian Studies and Politics at St. Olaf College in the United States. At that time, most American students chose to study Spanish, German, or French when choosing a foreign language. I chose to learn Chinese. That is, from that time on, I began to contact Chinese culture. Now, I often joke with my young Chinese colleagues around and say that I am older than they can speak Chinese because I am learning Chinese for a longer time than they are. However, when I started learning Chinese, I did not think that this language had such a profound influence on my future career development.

Before joining Cummins, I worked at a food company. In 1980 I was sent by the company to Shanghai, China, responsible for related business. At that time, I needed frequent business trips between Shanghai, Hangzhou, Yulin and Nanning. When I first arrived in China, my first impression here was that the people were very warm and hospitable. At that time, I went to Guangxi on a business trip and lived in a local hotel. Because there were few foreigners in China, I became a "rare species." The locals were particularly good to me and gave many thoughtful cares in terms of life: the room was the best in the hotel, there was a separate bathroom with a bathtub, and the catering staff also purchased aquatic products exclusively from Zhanjiang, and the service was very considerate. That sentence: at home.

After a long period of contact, I found that the Chinese people are very human, they value the mutual support between people, and are trustworthy. I remember one time, I asked the customer to have a meeting, but on the way, I sent a wounded worker to the hospital for treatment and delayed the itinerary, causing the meeting to be late for a while. Originally, I was still worried. After all, it was late for a meeting with the customer. The other person would feel somewhat neglected. When I went to the meeting to explain to everyone, everyone expressed my understanding and gave me more support in the future cooperation. Another time, I went to Hangzhou on a business trip and dropped my coat on the train. At the time, I kept my wallet and related documents in my coat pocket. When I arrived in Hangzhou, I only thought of it. Later I went to the train station and found that someone put my clothes on the lost and found office. When I got the clothes, I found that there were no less wallets or documents. This incident made me realize that although the national conditions and cultural backgrounds of the United States and China are very different, as independent individuals, the Chinese and Americans are the same and are worthy of mutual trust.

Chinese partners who must do their thing

In 1985, I joined Cummins. As one of the few Americans who could speak Chinese at the time, I was sent to China by the company to be in charge of business development and to participate in the early planning of Cummins's first pilot water production project in China. I was very excited to come to China again. When the company negotiated business with the second automobile manufacturing plant of the time ("the second steam"), the United States sat alone with me on a Chinese team. The integrity and honesty of the Chinese people left me with an extremely deep impression. It is a true portrayal of their rigorous work style. In the United States, cooperation negotiations usually require documents to record the consensus reached between the parties for later verification. In the talks with the two steam companies, I discovered that we do not need this and that our partners’ commitments will be implemented on specific issues. If they promise something during the conference, they will definitely fulfill their commitment. Therefore, during the negotiation process, I gradually established a mutually trusting partnership with my colleagues at the Second Automobile Company. This trust supports us through the wind and rain, and walks hand in hand to usher in today's remarkable achievements.

In the future contact with suppliers and partners, I have been adhering to such principles and concepts. Many times, I will emphasize one point: “If you make a commitment, I respect your decision. We respect each other. No matter which party makes a commitment, everyone must observe it together.” Cummins respects its partners and we not only cooperate Partners are regarded as providers of production bases, or relationships, government relationships, and will respect their full range of values.

Reform and Opening-up Are Cummins' Historical Opportunities

Cummins started business with Chinese industry partners in 1975 and in 2015 we celebrated its 40th anniversary in China. I have also worked in China for more than 30 years. It can be said that these years of Cummins and I in China are not only an era in which China experienced reforms and opening up, and economic growth, but also witnessed the vigorous development of Cummins in China.

As the first foreign-funded diesel engine company to enter China, Cummins seized a lot of rare development opportunities in this emerging market. The reform and opening-up policy has provided us with a source of power for us to deeply cultivate this hot land, allowing us to introduce China with confidence. Advanced technology and diversified management experience have made their own contributions to the development of Chinese engines, automobiles, construction machinery and other industries and the rise of local brands.

Since the reform and opening up, China’s economy has developed rapidly. In 1992, Mr. Deng Xiaoping’s southern conversation laid the second wave of China’s economic development, and Cummins Company seized this historical opportunity in a timely manner. Since the summer of 1993, senior executives of the company have intensively visited Chinese partners and quickly finalized six major investment plans. During the three short years from 1994 to 1996, they invested in five joint ventures and a wholly-owned factory. Another leaping development of Cummins China business. Cummins has been intensively working in the Chinese market, working hand in hand with Chinese partners, and continuously advancing the technological upgrading of China's road and non-highway related industrial chains. At the same time, we have put into production key spare parts and power system products in China to promote the technical progress of China's diesel engine industry and power system, and provide upgrade power for the development of China's automobile and construction machinery and other equipment manufacturing industries. Cummins has established a large-scale distribution service network in China. Sole proprietorships and joint ventures have a total of more than 2,000 distribution service outlets, which cooperate with the after-sales network of the host plant to provide first-class after-sales support for Chinese users.

Bringing Chinese Talents to the World Stage

More than 40 years later, Cummins has grown from a small office in Beijing’s National Palace of the People’s Republic to 3 rooms, 8 employees, and a small turnover of 8 million U.S. dollars. It has grown to 30 organizations and 10,000 in China today. Employees, large companies with sales exceeding $4 billion. In many entities in Cummins China (including joint ventures), you will see many people of different races, different thinking, and different cultural backgrounds working together. When we discussed, there were disputes and disagreements. Such discussions and controversies eventually led us to stimulate the collision of ideas and reach an agreement. Everyone can speak at Cummins because we respect and respect multiculturalism. With the progress of the Chinese society and the further extension of the opening-up policy, more and more modest and prudent Chinese employees dare to express their own ideas and provide advice and suggestions for the development of enterprises, industries and even the country. These are all very positive and full of positive energy changes. In these years of development, Cummins has actively integrated into Chinese society. One of our most salient features compared to other foreign companies is the localization of management talent. Cummins China's senior management team has a total of 14 members, only three foreign members. The other members are all native Chinese. They are elites who stand out from various functional departments in Cummins China. Cummins pays great attention to the training of talents and provides various training and development opportunities to help employees improve their capabilities. The open China has also given us more opportunities. Next, we are focusing on how to bring Chinese talents to the international stage and let them bring more Chinese forces to the world.

Safeguard the construction of the "One Belt and One Road"

If we say that during the initial period of reform and opening up, China’s concern was how to bring in foreign companies’ funds, technology, and management experience, then today’s people are more concerned about how to go abroad. How to expand in overseas markets is a question that many Chinese companies are thinking about. How to support Chinese local enterprises to go out and actively invest in the construction of the “One Belt and One Road” is a business that Cummins is practicing. In fact, as early as the early 1990s, we began to protect our partners’ export business.

In 1991, Dongfeng trucks equipped with Cummins B-series diesel engines began exporting to Southeast Asia, which was well received by local users and became a successful move for the Chinese commercial vehicle industry to the overseas market. Cummins has a large distribution service network in more than 190 countries and regions around the world. Whether our customers are in Asia, Africa or Europe, they can use Cummins products with confidence and enjoy Cummins's services with confidence. This is also for Cummins products. China's domestic highways and non-road equipment have laid a good foundation for the unimpeded advancement of these markets.

Cummins has branches in the areas along the “Belt and Road”. By establishing a cross-regional global cooperation mechanism for Cummins, we can help Chinese OEMs to establish good cooperative relationships with local governments and project owners, and work together with local partners in China. Front-end market, and provide strong support for after-sales service. Based on Cummins's knowledge of local policies, regulations and standards, we can help Chinese customers to successfully conduct business locally. For products, Cummins can also tailor products for the local environment to meet the different needs of countries along the “Belt and Road”. Based on technological advancement, product reliability, and cost advantages, we help our customers build brand and product competitiveness in the local market, open market opportunities, and win more business opportunities.

Put more R&D centers in China

Reform and opening up promoted the development of China's economy. The economic volume of a country not only reflects the economic performance of a country, but also reflects the national strength and wealth of a country. Over the past 40 years of reform and opening up, China’s GDP has steadily increased year by year, and the manufacturing industry has flourished. The achievements are obvious to all. China has become the second largest economy in the world today. With the economic and social development, the quality of the population has risen. China’s overall national strength is not the same as before, and the emergence of more sophisticated personnel has brought China out of the labor-intensive stage.

In addition to the US Technology Center, Cummins’s second largest R&D center in the world, the Cummins East Asia Research and Development Center, has settled in Wuhan, precisely because of this trend. After 10 years of development, the East Asia Research and Development Center has a strong technical team of more than 300 people. A total of 24 test benches, including emission tests, have been put into use to provide product design, verification and distribution, technology and product development, and products. Support and product life cycle management, and vehicle system integration and other technical services. In addition, Cummins has set up a key component turbocharger technology center in Wuxi, and has begun to build a large horsepower R&D center in Chongqing, which is expected to be officially opened in 2019.

Cummings Group Vice President Cao Side

Today’s China shows the world’s pride and ambition for the best in the world

In these years of working and living in China, I was honored to witness the great changes in this country. Change has affected all aspects of people’s lives. Since the reform and opening up, China’s information channels have become more fluent, the state’s systems have become more standardized, and the processes have become clearer. The efficiency of governments at all levels and related departments has improved significantly.

More and more internationalized China is more inclusive and multicultural, making it easier for foreigners to work and live here. China has attracted more and more foreigners to travel, work and even settle. Now that foreigners apply for Chinese visas and apply for work permits, the relevant applications and approval processes are simplified.

In 2016, I obtained the “Permanent Residence Permit for Foreigners of the People's Republic of China” granted by the Chinese government, which is often referred to as the “Green Card”. Being able to obtain China's "green card" is a great recognition for both me and Cummins. If there is no reform and opening up, this kind of convenience may be unthinkable to foreigners. It is no exaggeration to say that today’s China truly shows the world the ambition of “making the world more talented”.

The reform and opening up has also accelerated the development of Chinese cities. First-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen have developed into truly international metropolises. Take diet as an example. Here, you can find a variety of restaurants, different themes and different dishes. Chinese people do not have the chance to experience different styles of food without going abroad, and foreigners can find local cuisine here as well. The public transportation, public facilities and planning of the city are changing with each passing day. When I first arrived in Beijing, there were few motor vehicles on the road, and the number of private cars was even lower. The entire city had only two subway lines. Today, cars have become a means of transportation for many families. The subway network composed of 17 lines covers the entire city area, which greatly eases the pressure of ground transportation and saves people a lot of time in commuting. But during this period, I was even more shocked by the Chinese people’s enthusiasm for embracing change and their courage to create. Take the Internet economy, China's mobile communications network is very developed, mobile payment is very convenient, Alipay, WeChat is an essential payment tool for everyone mobile phone. Now shopping in China, basically do not need to bring a wallet, mobile Alipay and WeChat can meet the general expenses. Moreover, with the improvement of service facilities, the concept of service support for the Chinese people is constantly changing. The Internet has contributed to the improvement of people's quality of life.

It can be said that China is in the forefront of the world in more and more fields. This includes the exploration of new energy and big data technology. The Chinese government and private investment in the new energy field are obvious to all. We also expect to see more and more technological breakthroughs realized. In areas such as big data and car networking, China's related industries are full of vitality and the rhythm of innovation is accelerating. These new technologies are precisely Cummins’ strategic initiatives in the future. We look forward to cooperating with Chinese partners in various fields such as multi-energy power and interconnection technologies to break through innovation.

The 40 years of reform and opening up allowed the world to see the great changes in China. China in the new era has given the younger generation a bigger stage to display their ambitions and bloom their talents, and through their own efforts to win a better life. As a company rooted in China, Cummins hopes to better serve Chinese customers and help them succeed. My Chinese name is "Cao Si De," and its name is the same as "Zhang Si De." In China, Zhang Side represents a spirit that people long for, "serving the people." And my colleagues and I hope that through our own efforts, we can better serve our customers and create value for them.

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