China received considerable foreign assistance in building up its own economy. Beijing benefited particularly from the Senior Experts Service (SES), which was established in 1983 as a foundation of German industry for international cooperation. Until 2019, it sent retired volunteer experts and executives to 160 countries some 60,000 times. China, as the number one beneficiary, received 6,663 SES assignments, six times as much development aid as India.
Werner Gerich, a retired mechanical engineer, was one of the first specialists to travel to Wuhan in 1984. The local state-owned enterprise, which he whipped into shape, went bankrupt after his departure. But the German still rose to legend. After he died in 2003, Wuhan erected a monument in his honor and coined the slogan: “Let’s create many new Gerichs among us.”
The last time Werner Gerich (格里希) visited Wuhan was in June 2000. The German technician from Bretten near the city of Karlsruhe was 81 years old. He wanted to visit his old stomping ground: The Wuhan diesel engine plant, known as Wuchai (武柴) for short. The German pensioner had been the director for the local factory for two years until 1986 – as the first foreigner since the founding of the People’s Republic. Wuhan’s hosts, who otherwise hurried to fulfill Gerich’s every wish, were somewhat embarrassed. Road construction would obstruct all access routes, making a visit to the plant too inconvenient for the “venerable Mr. Ge” (格老).
It was a polite lie, an online report revealed 20 years later under the title, “Foreign director’s departure also brought end to Wuchai” (洋厂长走了，结果武柴没了). The state-owned company, managed and reorganized by Gerich until 1986 and employing 2,100 people, “started losing money in 1993. In 1998, it filed for bankruptcy. All employees lost their jobs; the plants were restructured.” Gerich was not given a tour of the factory because it no longer existed.
Naturally, the German had known for a long time that the state-owned company would not be able to hold its own in the market. But he hoped, as he told me on two occasions, that the plant would manage without privatization under conditions of competition. But China’s CP has proven to be incapable of setting the necessary framework for a genuine market economy. Under Xi Jinping, it deviates even further from the path.
Gerich came to China at a time when there were political innovators within the Beijing leadership who also wanted to tackle systemic reforms. They made him their foreign figurehead: a German engineer who wanted to help selflessly. Gerich was passed around Beijing. In a demonstrative gesture, “liberal” Politburo members such as Wan Li (万里), Hu Qili (胡启立) and Tian Jiyun (田纪云) invited him as the fourth in the group to play tennis doubles at the Diaoyutao State Guest House. Economic leaders such as Vice Premier Yao Yilin (姚依林) and State Councilor Zhang Jinfu (张劲夫) met him several times. China’s then-premier and later Party leader Zhao Ziyang (赵紫阳), who was overthrown within the Party in 1989 and remained under house arrest until his death, told Gerich in July 1987 that it was more important for China to be able to bring people like him “into the country than to import capital and equipment”.
Shanghai’s Mayor Zhu Rongji (朱镕基) made Gerich an iconic figure. China’s future premier praised his “strict hand in production”. He had Gerich’s experiences at the Wuhan diesel engine factory printed in book form as mandatory literature for corporate executives, and wrote the foreword himself for this lesson in “Chinese socialist business management.” Zhu assigned Gerich to spend one month putting 17 Shanghai state-owned companies through their paces. On November 29, 1988, he discussed his findings with him. Gerich did not mince words: At one piston manufacturer, it looked “like Germany in 1945, five minutes after the end of the Second World War”. On December 1st, Zhu ordered 1,200 Shanghai company bosses to be lectured by Gerich on how they could run their companies better. In closing remarks, he said that one character was enough to describe Gerich’s verdict on Shanghai’s state-owned enterprises: “脏”: a pile of dirt. Zhu demanded reform: “Quality must become Shanghai’s life norm”.
Zhu had the eight-page transcript of his memorable conversation with Gerich included in his selection of “speeches” published in 2013. The ex-premier thus set a monument to the German.
Gerich’s road to Wuhan
The saga of the SES expert began with his arrival in Wuhan. At 65, the former quality inspector at the Karlsruhe Nuclear Research Institute had felt too young for retirement. And so he was one of the first to sign up with the newly founded Bonn Senior Expert Service for an assignment in China.
Gerich noted in his own handwriting: “Without any Xiuxi” (without a break), he began his consulting work “limited to two to three months” with an accompanying interpreter “the very next day” after his arrival. He wanted to “improve the quality of the 18,000 water-cooled single-cylinder diesel engines annually produced by 2,000 employees”. The halls and sheds horrified him, according to these notes: “Everything is unheated, at +41 degrees C and -11 degrees C in winter, 88 percent humidity. Machine tools from 1960 and older and 3x depreciated. The foundry: Europe 1935-grade, with a scrap rate of about 45 percent (in Germany, the scrap rate is about 2.5 percent). No window panes in halls and offices… The plant seemed extremely desolate”. The engine warehouse was a “mess like cabbage and turnips without a plastic cover … covered with rust”. Quality control was non-existent. He mocked the department in charge as a “nursing home for the old and sick, a harbor for the lazy, a sanatorium for people with vitamin B”.
Gerich listed 38 changes necessary to get operations, management, and quality control in order “without additional investment”. He loudly complained that things would be different if he were in charge of the place. This was brought to the attention of the city government. They wanted to start a reform experiment and were just looking for an opportunity, according to a biography published in Wuhan, “Gerich and the Gerichians” (格里希与 格里希们), one of six volumes in a new book series, “Research on the foreign factory boss” (中国 洋厂长 研究丛书).
In his handwritten CV, Gerich wrote down the two dates that changed his life one below the other, as if nothing had happened in between: 16.9.1984 Departure for Wuhan Diesel Engine Plant as consultant for manufacturing and quality. 1.11.1984 Appointed as General Director by the Wuhan Municipal Government at the Wuhan Diesel Engine Plant.
Zhu Rongji, China’s future head of government, wrote the foreword to the book, the only one Zhu ever wrote for a foreigner. He called Gerich an idealist and ordered the book to be mandatory reading for China’s corporate leaders. After 1989, it was banned because it also features a photo and text of a meeting between Gerich and Premier and later Party leader Zhao Ziyang
As the first foreign factory boss since 1949, he took action. He had the quality supervisor fired along with the plant’s chief engineer – unheard of for a socialist company. This also caused some bad blood. After two years, he resigned from his job as director.
Gerich first lived in the Soviet zone of Berlin after 1945 and first moved to Jena. He worked in Karl-Marx-Stadt as an engineer at engine plants before resettling in West Berlin in 1961. His work in Wuhan benefitted, as his son Bernd recalled, from “the situation my father had experienced in 1945 and in the 1950s in the German Democratic Republic was similar to the pre-1978 period in China”.
Until 2000, Gerich traveled to China almost every year. His name opened many doors for him in Chinese companies, which he introduced to German companies. He was showered with honors from all sides, from honorary citizenship and honorary professorship of Wuhan to the Order of Merit of the Federal Republic of Germany.
Very few foreigners managed to follow in Gerich’s footsteps and make a “pure to China” impact. While Beijing announced many plans to recruit foreign executives to turn China’s state-owned corporations into global players, most of them fell through, as Hong Kong’s South China Morning Post discovered. In today’s pandemic, foreigners are on the run again: this time, however, away from China.