[Northstar]

By Alysha Webb
Automotive News / August 29, 2005

http://www.autonews....articleId=54299

BEIJING - Philip Murtaugh, former CEO of General Motors China, says he will work as a private consultant while he waits for the right job offer. Murtaugh, 50, resigned in late March.

"I'm looking into private equity," says Murtaugh, who is back in Shanghai after a brief return to the United States.

Private equity firms invest clients' money in troubled companies and try to return them to profitability. They then sell the companies.

Murtaugh, who has worked in England, Japan, the United States and China for GM, figures he has the skills to help turn around such companies.

Murtaugh says he would like to stay in China, though he will relocate if necessary. "Living in Shanghai would be very attractive. I like the people," he says.

The 32-year GM veteran led negotiations to form Shanghai GM, a 50-50 joint venture with Shanghai Automotive Industry Corp., in 1996.

Unlike many automotive manufacturers, which have formed joint ventures with several Chinese partners, Murtaugh insisted that GM stick with Shanghai Automotive as a partner in all of GM's China ventures.

The strategy is partly responsible for GM's success in China.

Sticking with one partner has allowed GM to avoid the problems other automakers have encountered in managing relations with multiple partners. For example, Volkswagen can't use common suppliers for vehicles assembled with different joint-venture partners.

Murtaugh declined to discuss the reasons behind his resignation.

But sources say Murtaugh, a soft-spoken man who started out as head of Shanghai General Motors before becoming head of GM's China operations, was disappointed by a reorganization of GM's Asia Pacific operations last year.

Originally, decisions such as which new models to build in China, or which suppliers to use, rested with the China headquarters. Under the new structure, such decisions are made at regional headquarters or in Detroit.

The situation was made worse when GM moved its Asia Pacific headquarters from Singapore to Shanghai in the second half of 2004.