Can International Joint Ventures Last?

Do international joint ventures make it in the long haul? Ask NACCO Industries in Cleveland and they will tell you it is possible. Read on. This is a good case study if you are working to promote JV's through your economic development program.

In a perfect world, the most efficient way for a U.S. manufacturer to enter a specific overseas market would be to initiate a joint venture with an indigenous company already established in the region. In the real world, however, cross-border joint ventures are usually just disasters waiting to happen.

The vast majority of joint ventures either implode or are ripped apart within four to seven years of inception. Only a minuscule number survive to the ripe old age of 10, and only a tiny fraction of those make it to 15.

How, then, to explain the ongoing relationship of NACCO Industries Inc. of Cleveland and Japan's Sumitomo Heavy Industries Ltd. -- an alliance that has thrived for more than three decades?

One of the longest-lived of all existing U.S.-Japanese joint ventures, the NACCO-SHI 50-50 partnership has withstood a series of increasingly knotty and potentially lethal challenges over the years. These have included differences in culture and language, changes of corporate ownership and direction, radical readjustments of individual responsibilities within the joint venture, currency fluctuations -- just about everything but famine and pestilence.

Read more here.