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Schoch says Mulally asked him in 2011 if he would return to China. Schoch's only question was whether Ford was committed to the country. Mulally didn't hesitate. "Yes, from the board of directors on down," he said, according to Schoch. It was a defining moment for Schoch. Last month, Mulally visited China for the third time in less than a year. He was there to open a $500 million engine plant in Chongqing (chong-CHING'), an industrial city of 30 million in southwestern China, where suburban industrial parks are rapidly filling with carmakers and auto suppliers. Chongqing is now Ford's largest manufacturing base outside Michigan. Mulally was also in Chongqing last August, to break ground on Ford's third assembly plant there, a $600 million facility that will be completed in 2014. During that trip, hundreds of uniformed workers -- many of whom are former soldiers
-- stood in precise rows as Mulally warmly praised local leaders for their "pro-business" policies. Chongqing's government was the first in China to offer subsidies to residents who buy locally made vehicles, which has boosted Ford's sales in the region. At the end of the ceremony, confetti rained down and rainbow-colored smoke shot into the air, adding another layer of haze to the city's thick, yellowish sky. A few days later, the executives touched down amid the rice fields and large, neo-Victorian houses of the wealthy southern city of Hangzhou. Ford is building one of its assembly plants there, in an immaculate new office park on the outskirts of the city. The $760 million plant is expected to produce 250,000 vehicles per year when it's completed in 2015.
In Hangzhou, Mulally and the others were greeted by Chinese women in traditional silk gowns
-- blue and white, like Ford's logo -- and quickly ducked into an air-conditioned tent to meet with local politicians. Later, the executives scooped up dirt with red-ribboned shovels. When the ceremony ended, rainbow smoke once again shot into the sky, accompanied by booming golden cannons. On the wall of his office in Dearborn, Mulally has a copy of an ad that Henry Ford published in the Saturday Evening Post in 1925. The ad was titled "Opening the Highways to All Mankind," and reflected Ford's wish to make vehicles available to everyone. Schoch says he's living Henry's dream. Schoch, 61, joined Ford in 1977 as a financial analyst. His career includes stints as chief financial officer for Europe and operations manager for Canada, Mexico and South America. Despite his long international career, the thoughtful, down-to-earth Schoch doesn't seem jaded. He spends many weekends dropping in on dealerships near the home he shares with his wife in Shanghai. He's giddy when he sees first-time Chinese buyers, surrounded by family members, getting their first set of keys. "Take yourself back to when you were a teenager and you got your first vehicle, and what it felt like, and you can see what it means for the Chinese customer," Schoch says. Ford hopes its manufacturing base in Chongqing, far from China's crowded eastern coast, will help it attract rural buyers in the still largely untapped markets in western China. For those buyers, Ford is developing a low-cost car to compete with the $9,500 Chevrolet Sail. Ford will use Lincoln to make a play for China's booming luxury market, which is dominated by German brands like Audi and BMW. Lincoln used to be the best-selling luxury brand in the U.S. but fell behind when Ford started focusing on other luxury brands. Ford's effort to revive the brand began this year with the launch of the Lincoln MKZ sedan in the U.S. "Chinese consumers buy on image and prestige and the message that they project to their family and co-workers and friends," Dunne said. "With a luxury brand like Lincoln, it gives them a chance to say,
'Hey, see my American luxury car that I drive? Do you have one of these?'"
Chinese buyers also appreciate a brand's history. That's why Ford introduced Chinese reporters to the MKZ at a historic temple in Beijing last summer, surrounded by vintage Lincoln posters. GM's Buick brand
-- which used to ferry Chinese royalty -- is a huge seller with cachet in China even though it struggles in the U.S. GM sold 401,327 Buicks in China in the first quarter of this year, four times more than it sold in the U.S. Ford, GM and others also have been helped by a backlash against Japanese automakers in China because of disputes between Japan and China over ownership of islands in the East China Sea. Toyota's sales fell 6 percent in the first six months of this year. Su Xiaoling, a sales manager in a Beijing real estate company, said he expects Ford's share of the Chinese market to climb because it offers newer styles and updates them often. "I think Ford cars are safe. The material they use is good and thick, not like the Japanese cars," he said. "But the price is pretty expensive." Schoch's goal, he says, is to build Ford's reputation and convince buyers like Su that Ford's offerings are worth the price. "Share and profits are important, but they're a fallout to how our customers perceive Ford," he says. "This is not a sprint in my mind. This is part of a very, very long journey."
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When Schoch (pronounced Shock) arrived in China 13 years ago, the government was building eight-lane freeways in major cities, but bicyclists and pedestrians still filled the streets. The Chinese were buying fewer than 2 million cars and trucks each year, a fraction of the 14.4 million sold in 2000 in the U.S.
