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. Last Updated: 07/27/2016

General Director Revs Up GM's Joint Ventures

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For Heidi McCormack, general director of General Motors-CIS, returning to the giant AvtoVAZ automaker with GM in 1997 to renew joint-venture negotiations felt rather like a reunion.

"It was a wonderful thing to see some of the same people I had worked with 10 to 11 years ago," she recalls.

McCormack, an energetic American of 36, first came to the plant in the Volga city of Tolyatti as an analyst with the investment banking group Bear, Stearns in 1990. Their job was to develop a privatization plan bringing the Soviet-era colossus up to speed with the realities of the modern marketplace.

The task was a daunting one. In the absence of a local taxation system, all big Soviet industrial complexes had, and in some cases still have, the local town or city's infrastructure on their balance sheet — from kindergartens to roads and hospitals.

"There was no difference between what I call operational infrastructure and civil infrastructure," McCormack explains.

The project with Bear, Stearns was ultimately broken off, but McCormack came back to Tolyatti years later working on GM's long-negotiated, $330 million joint venture with AvtoVAZ.

The joint project for manufacturing the off-road Chevy-Niva was given the green light by the GM board early last month. Other projects are reportedly in the pipeline, and final investments could slip past the $500 million mark.

Chevy-Niva prototypes have already been released in Tolyatti, but there are plenty of changes to come before Sept. 23, 2002, when production, planned at 75,000 vehicles per year, is set to start. "The car will have some more bells and whistles on," McCormack says.

While on the subject of the joint venture, McCormack is quick to explain reports of a "poison pill" clause in the deal, whereby the U.S. auto giant would receive the right to take complete control of the deal if there are any changes in AvtoVAZ's ownership structure.

It seems that the sinister pharmaceuticals metaphor might be a little wide of the mark.

"It's a 'change of control' provision. It really is simply the ability that you as a party to an agreement have the ability to choose your partners. … We are still looking at mechanisms like that … but until the documents are completely signed nothing is written in stone."

Erratic and demanding, post-Soviet and emerging markets are McCormack's preferred business arena.

Born and raised in Washington, McCormack attended John Hopkins University in Baltimore in 1982 before moving to Egypt, where she completed her higher education as part of an international program at Cairo University.

In 1986, she first visited Russia on a trip organized by her university. Her first impressions were clearly positive.

"There's this sense of a really big, hidden humor. I think a lot of people hide behind a certain severity when there's actually a smile and a laugh just behind."

The following three years were spent as a private consultant in Egypt advising local companies on attracting foreign investment. After her return to the United States in 1989, McCormack found a job on Wall Street with Bear, Stearns.

After working in Russia from 1990 to 1992, McCormack worked in Mexico, Colombia and Czechoslovakia.

In 1994 she teamed up with friends at Bear, Stearns to form the Central Asian Investment Corp. With a fund of $40 million, the firm had offices in the Kyrgyz capital, Bishkek; Tashkent, capital of Uzbekistan; Almaty, Kazakhstan; and Irkutsk, in eastern Siberia.

For the first year, McCormack worked out of a single room at Irkutsk's Intourist Hotel — a far cry from her present office on Gogolevsky Bulvar, which commands a stunning view of the Christ the Savior Cathedral.

"That was physically hard … the room had a single bed, a desk and a bedside table. I had two employees at that point, and every morning at 9 o'clock the room had to be cleaned and everything ready so we could set up three work stations."

Over 2 1/2 years in Siberia, the fund invested in a mineral water plant, a car-battery factory and Baikal Airlines, to name a few.

When she was taken onboard at GM CIS in 1997 as director of finance and growth, McCormack's principal task was to bring local dealerships under one roof. Previously, dealers had worked directly with GM's factories abroad and imported the vehicles themselves.

In some ways, the 1998 financial crisis facilitated this shift. "What the crisis did to all the dealers was it made owning stock and being self-sufficient financially much more difficult."

McCormack was appointed general director of GM CIS in June 2000, and she has high hopes for 2001. "Knock on wood," the company will see sales of 2,200 to 2,400 units this year, she said. She is also very excited about the Saab. "That's our baby!" she enthuses. A recent addition to the brands they offer, including Chevy and Opel, the Saab fleshes out GM's Russian portfolio as an exclusive niche brand.

McCormack's vehicle of choice is the Chevy Blazer. Not for the way it handles the infamous Russian roads, however, but because it has ample room to cope with the fruits of weekends spent antique shopping.

Asked what personal commitments she has to Russia, McCormack's response is simple. "It's my home — it's where I live."