53-816: Six Companies, Inc. was a joint venture of construction companies that was formed to build the Hoover Dam on the Colorado River in Nevada and Arizona . They later built Parker Dam , a portion of the Grand Coulee Dam , the Colorado River Aqueduct across the Mojave and Colorado Deserts to urban Southern California , and many other large projects. On January 10, 1932, the Bureau of Reclamation made bid documents for
106-514: A consortium in order to submit a joint bid for the contract. Initially, Utah Construction Company's owners, brothers E.O. and W.H. Wattis, along with the company's vice president, Andrew H. Christensen, asked Harry W. Morrison of Morrison-Knudsen to join them. After they realized the bid would be much higher than expected, the Wattis Brothers and Morrison-Knudsen convinced four additional companies to join. In February 1930 The Six Companies, Inc.
159-1013: A temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are " co-venturers ". The venture can be a business JV (for example, Dow Corning), a project/asset JV intended to pursue one specific project only, or a JV aimed at defining standards or serving as an "industry utility" that provides a narrow set of services to industry participants. Some major joint ventures include United Launch Alliance , Vevo , Hulu , Virgin Media O2 , Penske Truck Leasing , and Owens-Corning . According to Gerard Baynham of Water Street Partners, there has been much negative press about joint ventures, but objective data indicate that they may actually outperform wholly owned and controlled affiliates . He writes, "A different narrative emerged from our recent analysis of U.S. Department of Commerce (DOC) data, collected from more than 20,000 entities. According to
212-774: A tunnel forming a triangle of intersecting track . In 1935, the railroad went bankrupt because of decreased freight and passenger traffic caused by the Great Depression and had to be reorganized. Western Pacific (WP) operated the California Zephyr passenger train with the Denver and Rio Grande Western Railroad and the Chicago, Burlington and Quincy Railroad . The WP handled the "Silver Lady" from Oakland, California, to Salt Lake City, Utah from 1949 to 1970. The Western Pacific owned several connecting short-line railroads . The largest
265-421: A $ 5 million (equivalent to $ 80.7 million in 2023) performance bond. The contractor would have seven years to build the dam, or penalties would ensue. Because of the project's immense size and the fact that it was the first dam on the Colorado River , no single contractor had the resources to make a qualified bid alone. So, general contractors Utah Construction Company of Ogden, Utah decided to form
318-855: A 10-mile (16 km) branch that brought supplies by rail from a connection with the Boulder City Branch of the Union Pacific Railroad at Boulder City, Nevada . During World War II, the Six Companies built airstrips and related facilities on Pacific islands. The venture also held a majority ownership interest in Joshua Hendy Iron Works in Sunnyvale, California . Hendy was most known for its record-breaking assembly line production of 754 Liberty Ship EC-2 Reciprocating Steam Engines, producing one engine every 40.8 hours. They were used at
371-439: A 2.2 percent average ROA, while wholly owned and controlled affiliates in the U.S. only realized a 0.7 percent ROA." In European law , the term "joint venture" is an exclusive legal concept, better defined under the rules of company law . In France , the term "joint venture" is variously translated as "association d'entreprises", "entreprise conjointe", "coentreprise" or "entreprise commune". A JV can be brought about in
424-660: A bid-spread of almost 10%. The Six Companies board selected Crowe, who had helped draft the bid, as the General Construction Superintendent of the Boulder Dam construction. He was heavily involved and hired each of the men who were employed during the course of the project, lived in Boulder City with his wife and two daughters, and was on the dam site every day of the week until the project was completed. Work began around June 1931 and The Six Companies completed
477-517: A company. By its formation, the JV becomes a new entity with the implications that: On the receipt of the Certificate of Incorporation, a company can commence its business. This is a legal area and is fraught with difficulty as the laws of countries differ, particularly on the enforceability of "heads of" or shareholder agreements. For some legal reasons, it may be called a Memorandum of Understanding . It
530-419: A new market, particularly emerging market ; to gain scale efficiencies by combining assets and operations; to share risk for major investments or projects; or to access skills and capabilities. Most joint ventures are incorporated, although some, as in the oil and gas industry , are "unincorporated" joint ventures that mimic a corporate entity. With individuals, when two or more persons come together to form
583-485: A principal disadvantage is absence of an interested and influential Chinese party. As of the 3rd Quarter of 2004, WFOEs had replaced EJVs and CJVs as follows: (*)=Financial Vventures by EJVs/CJVs (**)=Approved JVs These enterprises are formed under the Sino-Foreign Investment Act. The capital is composed of value of stock in exchange for the value of the property given to the enterprise. The liability of
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#1732844214639636-404: Is allowed to enter into contracts with appropriate government authorities to acquire land use rights, rent buildings, and receive utility services. In this it is more similar to a CJV than an EJV. WFOEs are expected by PRC to use the most modern technologies and to export at least 50% of their production, with all of the investment is to be wholly provided by the foreign investor and the enterprise
689-592: Is described below. The EJV Law is between a Chinese partner and a foreign company. It is incorporated in both Chinese (official) and in English (with equal validity), with limited liability. Prior to China's entry into WTO – and thus the WFOEs – EJVs predominated. In the EJV mode, the partners share profits, losses, and risk in equal proportion to their respective contributions to the venture's registered capital. These escalate upwardly in
742-465: Is done in parallel with other activities in forming a JV. Though dealt with briefly for a shareholders' agreement , some issues must be dealt with here as a preamble to the discussion that follows. There are also many issues which are not in the Articles when a company starts up or never ever present. Also, a JV may elect to stay as a JV alone in a "quasi partnership" to avoid any nonessential disclosure to
795-464: Is what will happen if the firm is dissolved, if one of the partners dies, or if the firm is sold. Often, the most successful JVs are those with 50:50 partnership with each party having the same number of directors but rotating control over the firm, or rights to appoint the Chairperson and Vice-chair of the company. Sometimes a party may give a separate trusted person to vote in its place proxy vote of
848-505: Is within his total control. WFOEs are typically limited liability enterprises. Like with EJVs, but the liability of the directors, managers, advisers, and suppliers depends on the rules which govern the Departments or Ministries which control product liability, worker safety or environmental protection. An advantage the WFOE enjoys over its alternates is enhanced protection of its know-how but
901-442: The Hoover Dam construction project available to interested parties at $ 5 a copy (equivalent to $ 100.00 in 2023). The government would provide the materials, and the contractor was to prepare the site and build the dam. The dam was described in minute detail, covering 100 pages of text and 76 drawings. A $ 2 million (equivalent to $ 32.3 million in 2023) bid bond was to accompany each bid. The winner would have to post
954-654: The Overland Route for rail traffic between Salt Lake City / Ogden, Utah , and Oakland, California , for nearly 80 years. The Western Pacific was one of the original operators of the California Zephyr passenger line. In 1982, the Western Pacific was acquired by the Union Pacific Corporation and it was soon merged into the Union Pacific Railroad . The original Western Pacific Railroad (1862–1870)
1007-488: The Richmond Shipyards . Six Companies Inc. was composed of: Leadership was split between the companies with officers: Board members included: Joint venture A joint venture ( JV ) is a business entity created by two or more parties, generally characterized by shared ownership , shared returns and risks , and shared governance. Companies typically pursue joint ventures for one of four reasons: to access
1060-476: The World Trade Organization (WTO) around 2001 has had profound effects on foreign investment. Not being a JV, they are considered here only in comparison or contrast. To implement WTO commitments, China publishes from time to time updated versions of its "Catalogs Investments" (affecting ventures) prohibited, restricted. The WFOE is a Chinese legal person and has to obey all Chinese laws. As such, it
1113-450: The "constitution" of a company in these countries. The articles of association regulate the interaction between shareholders and the directors of a company and can be a lengthy document of up to 700,000 or so pages. It deals with the powers relegated by the stockholders to the directors and those withheld by them, requiring the passing of ordinary resolutions , special resolutions and the holding of Extraordinary General Meetings to bring
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#17328442146391166-456: The DOC data, foreign joint ventures of U.S. companies realized a 5.5 percent average return on assets (ROA), while those companies' wholly owned and controlled affiliates (the vast majority of which are wholly owned) realized a slightly lower 5.2 percent ROA. The same story holds true for investments by foreign companies in the U.S., but the difference is more pronounced. U.S.-based joint ventures realized
1219-626: The Founder at board meetings. Recently, in a major case the Indian Supreme Court has held that Memorandums of Understanding (whose details are not in the articles of association) are "unconstitutional" giving more transparency to undertakings. A JV is not a permanent structure. It can be dissolved when: Joint ventures are risky forms of business partnerships . Literature in business and management has paid attention to different factors of conflict and opportunism in joint ventures, in particular
1272-642: The Hemenway Wash, present day Las Vegas Bay , and connected to the US Government Hoover Dam Railroad at Lawler, Nevada, a location also known as "US Government Junction". From Lawler the railroad went north for seven miles (11 km) to Saddle Island and then east to the Three-Way Junction gravel plant, now submerged under Lake Mead . From the gravel plant the line split into two branches. One branch ran south for 4.8 miles (7.7 km) to
1325-459: The JV's life, giving the option to the foreign investor, by holding higher equity, obtains a faster rate of return with the concurrent wish of the Chinese partner of a later larger role of maintaining long-term control. The parties in any of the ventures, EJV, CJV or WFOE prepare a feasibility study outlined above. It is a non-binding document – the parties are still free to choose not to proceed with
1378-840: The Rio Grande's main rival, the Union Pacific Railroad. The Western Pacific Railway acquired the Alameda and San Joaquin Railroad and began construction on what became known as the Feather River Route. Completed in 1909, it was the last major rail line connected to California. After Western Pacific Railway Company defaulted on mortgage bonds, its assets were sold in 1916 to The Western Pacific Railroad Company . The original line used 85 lb/yd rail on untreated ties, with no tie plates except on curves over one degree; in 1935 more than half of
1431-528: The US) covering know-how and trademarks and supply-of-equipment agreements. The minimum equity is prescribed for investment truncated, where the foreign equity and debt levels are: There are also intermediary levels. The foreign investment in the total project must be at least 25%. No minimum investment is set for the Chinese partner. The timing of investments must be mentioned in the Agreement and failure to invest in
1484-581: The Union Pacific Corporation purchased the Western Pacific in 1982, the WP became part of a combined Union Pacific rail system: the Union Pacific Railroad, the Missouri Pacific Railroad , and the WP. The Union Pacific maintains one locomotive in its fleet, Union Pacific 1983 , in a Western Pacific influenced livery . The California Zephyr was the famous Western Pacific passenger train but
1537-461: The cases, the status of the formed enterprise is that of a legal Chinese person which can hire labor directly as, for example, a Chinese national contactor. The minimum of the capital is registered at various levels of investment. Other differences from the EJV are to be noted: Convenience and flexibility are the characteristics of this type of investment. It is therefore easier to find co-operative partners and to reach an agreement. With changes in
1590-738: The dam via Cape Horn, Lomix (the Low Level Concrete Mixing Plant) and Himix (the High Level Concrete Mixing Plant) and the dam face. The other branch, now also submerged under Lake Mead, ran north for 7.3 miles (11.7 km) across the Las Vegas Wash, crossed the Colorado River on a bridge into Arizona and the Arizona gravel pit (Arizona Gravel Deposits) at a location two miles (3.2 km) from Callville . The line
1643-502: The dam's construction two years ahead of schedule in 1935. Crowe was awarded a bonus percentage of the profit for completing virtually every portion of the job well ahead of schedule. The dam was dedicated in September 1935 but it took an additional nine years (1938–1947) under relative secrecy, to fix serious leaks with a supplemental grout curtain. The Six Companies also built the 19.1-mile (30.7 km) Six Companies Railroad. It ran along
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1696-618: The death of Mao Zedong in 1976, initiatives in foreign trade began to be applied, and law applicable to foreign direct investment was made clear in 1979, while the first Sino-foreign equity venture took place in 2001. The corpus of the law has improved since then. Companies with foreign partners can carry out manufacturing and sales operations in China and can sell through their own sales network. Foreign-Sino companies have export rights which are not available to wholly Chinese companies, as China desires to import foreign technology by encouraging JVs and
1749-689: The direction of George Jay Gould I , the Western Pacific Railway proposed to build a standard gauge track connection to the Pacific Coast for his aspiring Gould transcontinental system . Construction was financed by the Denver and Rio Grande Western Railroad , a company in the Gould system, which had lost access to California due to the attempted acquisition of the Southern Pacific Railroad by
1802-495: The directors' decision to bear. A Certificate of Incorporation or the Articles of Incorporation is a document required to form a corporation in the U.S. (in actuality, the state where it is incorporated) and in countries following the practice. In the US, the "constitution" is a single document. The Articles of Incorporation is again a regulation of the directors by the stock-holders in
1855-468: The following major ways: In the UK , India , and in many common law countries, a joint-venture (or else a company formed by a group of individuals) must file its memorandum of association with the appropriate authority. This is a statutory document which informs the public of its existence. It may be viewed by the public at the office in which it is filed. Together with the articles of association , it forms
1908-423: The government or the public. Some of the issues in a shareholders' agreement are: There are many features which have to be incorporated into the shareholders' agreement which is quite private to the parties as they start off. Normally, it requires noтуОЧ submission to any authority. The other basic document which must be articulated is the Articles, which is a published document and known to members. This repeats
1961-547: The indicated time, draws a penalty. Co-operative Joint Ventures (CJVs) are permitted under the Sino-Foreign Co-operative Joint Ventures. Co-operative enterprises are also called Contractual Operative Enterprises. The CJVs may have a limited structure or unlimited – therefore, there are two versions. The limited-liability version is similar to the EJVs in status of permissions – the foreign investor provides
2014-583: The influence of parent control structure, ownership change, and volatile environment. Government procurement regulations, such as the Federal Acquisition Regulation (FAR) in the United States, may specify how joint ventures are to be approached as suppliers or confirm that a joint venture or other form of contractor partnering is seen as a "desirable" arrangement for supplying to government. The FAR states that The Government will recognize
2067-405: The integrity and validity of contractor team arrangements [including joint ventures], provided the arrangements are identified and company relationships are fully disclosed in an offer or, for arrangements entered into after submission of an offer, before the arrangement becomes effective. The Government will not normally require or encourage the dissolution of contractor team arrangements. Under
2120-705: The latest technologies. Under Chinese law, foreign enterprises are divided into several basic categories. Of these, five will be described or mentioned here: three relate to industry and services and two as vehicles for foreign investment. Those five categories of Chinese foreign enterprises are: the Sino-Foreign Equity Joint Ventures (EJVs), Sino-Foreign Co-operative Joint Ventures (CJVs), Wholly Foreign-Owned Enterprises (WFOE), although they do not strictly belong to Joint Ventures, plus foreign investment companies limited by shares (FICLBS), and Investment Companies through Foreign Investors (ICFI). Each category
2173-477: The law, it becomes possible to merge with a Chinese company for a quick start. A foreign investor does not need to set up a new corporation in China. Instead, the investor uses the Chinese partner's business license, under a contractual arrangement. However, under the CJV, the land stays in the possession of the Chinese partner. There is another advantage: the percentage of the CJV owned by each partner can change throughout
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2226-644: The main line still had its original rail, most of it having carried 150 million gross tons. In 1931 Western Pacific opened a main line north from the Feather River Canyon to the Great Northern Railway in northern California. This route, today part of BNSF's Gateway Subdivision , joined the Oakland ;– Salt Lake City main line at the Keddie Wye , a unique combination of two steel trestles and
2279-402: The majority of funds and technology and the Chinese party provides land, buildings, equipment, etc. However, there are no minimum limits on the foreign partner which allows him to be a minority shareholder. The other format of the CJV is similar to a partnership where the parties jointly incur unlimited liability for the debts of the enterprise with no separate legal person being created. In both
2332-471: The project. The feasibility study must cover the fundamental technical and commercial aspects of the project, before the parties can proceed to formalize the necessary legal documentation. The study should contain details referred to earlier under Feasibility Study (submissions by the Chinese partner). There is basic law of the PRC concerning enterprises with sole foreign investment controls, WFOEs. China's entry into
2385-531: The rules applicable to public procurement in the European Union , public bodies may insist that suppliers intending to provide goods and services through a joint partnership accept joint liability for the execution of the contract. According to a 2003 report of the United Nations Conference on Trade and Development , China was the recipient of US$ 53.5 billion in direct foreign investment, making it
2438-440: The same proportion as the increase in registered capital. The JV contract accompanied by the articles of association for the EJV are the two most fundamental legal documents of the project. The Articles mirror many of the provisions of the JV contract. In case of conflict the JV document has precedence. These documents are prepared at the same time as the feasibility report. There are also the ancillary documents (termed "offsets" in
2491-435: The shareholders agreement as to the number of directors each founder can appoint to the board of directors; whether the board controls or the founders; the taking of decisions by simple majority (50%+1) of those present or a 51% or 75% majority with all directors present (their alternates/ proxy ); the deployment of funds of the firm; extent of debt; the proportion of profit that can be declared as dividends; etc. Also significant
2544-562: The shareholders, including debt, is equal to the number of shares purchased by each partner. Western Pacific Railroad The Western Pacific Railroad ( reporting mark WP ) was a Class I railroad in the United States . It was formed in 1903 as an attempt to break the near-monopoly the Southern Pacific Railroad had on rail service into northern California. WP's Feather River Route directly competed with SP's portion of
2597-426: The world's largest recipient of direct foreign investment for the first time, to exceed the US. Also, it approved the establishment of nearly 500,000 foreign-investment enterprises. The US had 45,000 projects by 2004 with an in-place investment of over 48 billion. Until recently, no guidelines existed on how foreign investment was to be handled due to the restrictive nature of China toward foreign investors. Following
2650-568: Was constructed by railroad contractor John Phillips of San Francisco, California . Since the completion of the dam and filling of Lake Mead, Six Companies, Inc. railroad line is now submerged. The Western Pacific Railroad purchased several of the Six Companies dump cars for company service after the dam was completed and the equipment declared surplus. One of these cars is now preserved at the Western Pacific Railroad Museum at Portola, California . The US Government Railroad had
2703-566: Was established in 1862 to build the westernmost portion of the first transcontinental railroad , between Sacramento and San Jose , California (later to Oakland). After completing the last link from Sacramento to Oakland, this company was absorbed into the Central Pacific Railroad in 1870. The second company to use the "western pacific" appellation was the Western Pacific Railway Company , founded in 1903. Under
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#17328442146392756-528: Was incorporated as a joint venture and they began working out a bid enlisting the help of Morrison-Knudsen employee Frank T. Crowe to do so. The project was so complex and large that only three bids were received and, on March 4, 1931, the US Secretary of the Interior accepted the Six Companies' bid of US$ 48,890,955 (equivalent to $ 789 million in 2023). This was $ 5,000,000 lower than the next bidder, meaning
2809-854: Was the Sacramento Northern Railway , which once reached from San Francisco to Chico, California. Others included the Tidewater Southern Railway , the Central California Traction , the Indian Valley Railroad and the Deep Creek Railroad . In December 1953, the Railroad retired its last steam locomotive from revenue service. At the end of 1970, WP operated 1,187 miles (1,910 km) of road and 1,980 miles (3,190 km) of track, not including its Sacramento Northern and Tidewater Southern subsidiaries. After
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