FIRESTONE COMPENSATION TRADE 1. Name: Firestone Tire and Rubber 2. Size of Project: essay
FIRESTONE COMPENSATION CASELET: FIRESTONE COMPENSATION TRADE 1. Name: Firestone Tire and Rubber 2. Size of Project: US$ 30 million per Technology Transfer 3. Project Type: Technology Transfer, Compensation Trade (see diagrams attached) 4. Location: ideilly, throughout China 5. Background: Firestone wanted to sell its slightly dated radial tire technology to China. [The technology was not the most current in the US or Japan, but was current and appropriate technology for China and for Southeast Asia and Africa.] Its concept was to sell the same technology several times in China, to each of the major tire manufacturers. The Chinese party Was asked to pay US$30 million cash at the outset of each Tech Transfer. As an inducement, Firestone was -willing to agree to buy back each year a certain volume of tires that met international standard, so as to provide the Chinese party with a market and a source of hard currency to recover the initial US$30 million outlay. Firestone organized a team of only two individuals who were sent to China for 12 months to complete these sales. One was a senior VP of technology, who knew the radial tire technology very well. The other was a senior VP of marketing, who was experienced at selling and contract negotiations. You have been hired as a highly paid consultant to Firestone. You will meet the Firestone principals in their Hong Kong hotel room tonight. Principal Questions (your answers should be specific and detailed, taking up at least 30% of your study or presentation time.) 1. Buyer Profile. Name at least 6 key attributes (characteristics) of the Chinese buyer e.g., large or small, technically advanced (3 years behind current Western technology) or technically deficient (30 years behind), State-Owned Enterprise (SOE) or privately owned, etc.). Explain your reasoning to Firestone.The Firestone team is flying to China from Hong Kong tomorrow morning. Which city Should they fly to first and whom should they call on there first? Explain why to Firestone. Other Questions… Given that a single Ministry — the Ministry of Chemical Industry or MOCI — is responsible for all rubber products in China, was Firestone likely to be successful in selling the same technology more than once to “China, Inc.”? A principal concern of Firestone is protecting the confidentiality of the technology. What provisions can Firestone add to the sales contract or buyback contract that might help to ensure the confidentiality of the technology? (Think beyond a confidentiality provision.) Firestone arranged U.S Eximbank financing to support this U.S. export. What differences would Firestone have encountered in the financing structure for a sale to, for example, (i) a Province, (ii) a Municipality with provincial-level status, such as Shanghai municipality, and (iii) a smaller Municipality? Please refer to the diagrams of compensation trade transactions in China. As Firestone, would you prefer the sale and the buyback to be in one contract, or two? Describe the likely nature of your buyback agreement: Would you prefer to be a buyer from or a sales agent of the Chinese technology purchaser? Please give reasons. What does Firestone’s experience suggest about the market in China? * * * • 18 AssignmentTutorOnlineAssignment status: Already Solved By Our Experts (USA, AUS, UK & CA PhD. Writers) CLICK HERE TO GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS, GET A NON PLAGIARIZED PAPER FROM OUR EXPERTS-CASELET FOR FIRESTONE COMPENSATION: FIRESTONE COMPENSATION TRADE Firestone Tire and Rubber Company is the first name on the list. 2. Project Budget: $30 million per technology transfer 3. Type of Project: Technology Transfer, Trade Compensation (see diagrams attached) 4. Location: ostensibly, all throughout China 5. Historical context: Firestone sought to market its radial tire technology to China, which was a little out of date. [The technology was not the most up-to-date in the United States or Japan, but it was current and appropriate in China, Southeast Asia, and Africa.] Its plan was to offer the identical technology to each of China's big tire producers many times. The Chinese political party At the start of each Tech Transfer, I was required to pay US$30 million in cash. Firestone agreed to buy back a set volume of tires that met international standards each year as an inducement, providing the Chinese side with a market and a source of hard money to recover the initial US$30 million outlay. To complete these sales, Firestone assembled a team of only two people who were sent to China for a period of 12 months. One was a senior vice president of technology who was well-versed in radial tire technology. The other was a senior vice president of marketing with sales and contract negotiating skills. You've been employed by Firestone as a high-paid consultant. Tonight, you'll meet the Firestone executives in their Hong Kong hotel room. The Most Important Questions (your answers should be specific and detailed, taking up at least 30 percent of your study or presentation time.) 1. The Buyer's Profile Identify at least six important features (attributes) of the Chinese buyer, such as large or small, technically advanced (3 years behind current Western technology) or technically deficient (30 years behind), State-Owned Enterprise (SOE) or privately owned, and so on. Firestone should understand your rationale.Tomorrow morning, the Firestone crew will fly to China from Hong Kong. Which city should they fly to first, and with whom should they make contact? Firestone needs to know why. Other Concerns... Given that all rubber goods in China are regulated by a single ministry, the Ministry of Chemical Industry, or MOCI, was Firestone likely to sell the same technology to "China, Inc." more than once? Protecting the technology's confidentiality is a major priority for Firestone. What clauses can Firestone include in the sale or buyback agreement that will help to protect the technology's confidentiality? (Think beyond a non-disclosure clause.) To promote this US export, Firestone acquired finance through the US Eximbank. What distinctions would Firestone have seen in the financing arrangement for a sale to I a Province, (ii) a Municipality having provincial-level status, such as Shanghai Municipality, and (iii) a smaller Municipality, for example? Please see the diagrams of China's compensating trade deals. Would you rather have a single contract for the sale and the buyback, or two? Describe the expected terms of your buyback agreement: Would you wish to be a buyer from or a sales representative for the Chinese technology buyer? Please provide justifications. What does Firestone's experience with the Chinese market tell about the market? • 18 AssignmentTutorOnline.comOur experts have already completed this assignment (USA, AUS, UK & CA PhD. Writers) GET A PROFESSIONAL WRITER TO WORK ON THIS AND OTHER SIMILAR PAPERS, OR GET A NON-PLAGIARIZED PAPER FROM OUR EXPERTS BY CLICKING HERE.