Wang Haoliang sees the success of Nanjing Automobile Corporation

The NAC-SAIC cooperation and the regional development

At the beginning of this year (2011), SAIC has gone through a full restructuring of NAC within 3 years. Nanjing Automobile Corporation cooperation on the third anniversary, the report card is good and comprehensive - NAC no losses, no employees laid-off, SAIC has to expand NACs production capacity to 300 thousand, SAICs sales exceeded 3,500,000 in 2010 to lay a solid foundation.

As far the largest reorganization of the project, numerous caught up in assets, personnel, product re-smooth fast forward, what kind of inspiration behind the how?

Not long ago, SAIC chairman Hu Maoyuan and Yuejin Group Chairman Wang Haoliang, jointly to the media about "A Thousand Days fusion" were in the twists and turns, one of the many ideas, models, practices, cross-regional reorganization of practice for quite beneficial .

"Chemistry" and the two "catalytic"

From the figures: through three years of effort, NAC, reduced losses in the first year by 40%, 40% in the second year and then reduced losses in 2010, overall no losses. Hu Maoyuan said: "Just from an economic point of view, this sense is not too large. Most importantly, we achieved an 'all-round cooperation, financing for a'. Restructuring is not just a physical reaction, more importantly, the chemical reaction. "In Hu Maoyuan view," cultural integration "and" tilt-oriented, "is this South cooperation on the" chemistry ", the most important of the two" catalyst. "

How to melt into a? South cooperation in the design on to take full advantage of the capital market, NAC became a subsidiary of SAIC; the same time, NAC's parent company - SAIC Yuejin Group holds 5.5% of the SAIC shares. This mutual shareholding pattern of cooperation, both sides more likely to become a family.

Since it is a "one family", SAIC fast the whole group some of the good values, vision, cooperation, ideas, business spirit and full exchange of NAC. Chih-Hsin Chen, executive vice president of Shanghai Automotive introduced three years, all kinds of exchange activities, 33 of the report of youth theater, like the Dead Poets Society, softly. Gradually, SAIC employees work in Nanjing mental outlook has changed, there is sense of identity. Today, Pukou factory workers working more than 8 hours a day, often 11 hours.

Detail is impressive: After the reorganization, SAIC held a 3rd anniversary commemoration of reform and opening up singing the General Assembly, NAC also participated. Accommodation in order to save the day, they start lining up at 3 o'clock the morning, 4 o'clock departure to Shanghai, clothing is the clothing of workers, wearing helmets and props is a towel, song is "Let the workers have the power", sing very well. Hu Maoyuan, said: "I was on the rostrum to look, think they perform so hard, sing so good, is not to give them a prize assessment, to encourage to encourage them? He wanted to open the back door and the judges, 'you see if they are from Nanjing rushed over, is not to give them some encouragement ah? 'results the judges to answer a very firm: you do not say, we had comments on them, and why? the whole choir is not only effective, but no one tamper with them , the overall quality of the strong. "

Gradually, quietly changing ideas, we have a culture. For example, lean production, the beginning of the NAC staff can not keep up the pace of Shanghai Volkswagen, but they persevered. Transformation of the old Fiat plant in Nanjing, took only 3 months. In 2010, Nanjing Branch of Shanghai Volkswagen sold 126,000, 200,000 in 2011 is expected to complete the turn around Fiat's gorgeous legacy.

Of course, "family" is also hard to avoid bumps. How to do? In this regard, SAIC used the four "Tilt-oriented."

First, the "split tilt." All aspects of SAIC into conflict with Nanjing Auto, Shanghai to Nanjing; vehicle area in contradiction with the parts, the vehicle for parts. For example, to allow production of parts by the East China Company as soon as possible to run and when you put the land division and give it a good resource, yet the company more than 200 unemployed workers left the vehicle business.

The second is "planning tilt." At that time the production of Nanjing MG, Roewe Shanghai production. But the MG product line is too weak, not completely hold up production base in Nanjing, the performance of this piece. SAIC then decided to do the same platform Roewe and MG; the same time, the most likely to form large-scale mass production of A-class car to get Nanjing. Thus, the original production in Port Roewe 350 in April 2010 in Nanjing volume production. To date, has completed over 50,000 units, a strong base of support for the economic upgrading of Nanjing.

Third, "investment tilt." 2008 financial crisis, many projects in Shanghai, SAIC have stopped, but Pukou base in Nanjing, but decisively invested 2.566 billion yuan. Which is the reason of this "tilt" for the losses lay the foundation for a comprehensive NAC, led the A-Class production capacity and include parts of the production.

Fourth, the "skewed distribution." Financial crisis, leading cadres of the first cut wages SAIC, reducing the budget; but in Nanjing increasing employee wages - three years, the average annual wage increase of 10%. Hu Maoyuan said, the group company in 2010 to achieve 46 million profit turnaround, and these profits will be entirely in the production base in Nanjing, the historical development and resolution of the old account.

Restructuring the automotive industry is not easy. China has 150 of the automobile companies, top ten accounted for 87% of the share, which accounted for SAIC, a 20% market share. Wang Haoliang said: "The future trend is the strong grow stronger the weak weaker. And we at least explore the corporate restructuring of viable inter-regional route, the Yangtze River Delta to promote the economic integration of the automotive industry." It is reported that the next five years SAIC Jiangzai invest 100 billion, to form the Nanjing base 1,000,000 of the production capacity, annual sales income of 100 billion, led the formation of trade in services and automotive parts and components industry base.

Useful to try to cross-regional restructuring

South cooperation on the three years from criticism into understanding, into a share from the competition, fragmented into a concerted effort by the fusion of the road there are a lot of experience is worth learning.

In all fairness, at this stage, China's regional restructuring difficult. An interview with reporters in recent years, found that enterprises in Shanghai, regardless of other provinces and cities is an active M & A business, or "pretty first married," mergers and acquisitions by foreign cities, negotiation and integration processes are difficult, the concept of which is a big problem obstacles.

For example, a Shanghai machinery company and the leading enterprises in domestic negotiations more than two years, the two leaders attach great importance, it seems everything is ready, you can not restructuring agreement has been signed off. One important reason is that land still on the level of valuation of assets. Two years, a lot of land appreciation, but if in accordance with the present value estimates, other provinces and cities not do M & A business; if calculated according to the value of two years ago, the acquired business leaders in Shanghai and easily labeled "loss of state assets," the hat. Some of Shanghai responsible for the acquired businesses are concerned that, if the negative result in loss of state assets restructuring, will become the business development of the sinner, so very carefully. Such concerns, cross-regional restructuring has been a big obstacle to restructuring is often difficult, missed the best time.

Three years from the integration of South-South cooperation on the point of view, as was head of M & NAC has also undertaken a "corporate sinner" criticism. Over sixty years, the Wang Haoliang, chairman, three years each knee to knee deep talk with reporters, always will be chatting about the pressure on their own, many people think, "he sold to Nanjing Automobile," which, he was calm also want to re-development to prove himself after the decision was correct. And 3 years, Hu Maoyuan, SAIC and other leaders who fully understand the leadership of the NAC pressure to give strong support from the many to give four tilt, deepen mutual trust, to overcome difficulties. This is the rare place in the South-South cooperation.

Similarly, in the restructuring and development process, how to rationalize the distribution of benefits between the two relations between SAIC Nanjing Auto has experience-based. 3 years ago, SAIC and NAC co-operation agreement, there are "three constant principles", that is, after all-round cooperation, "the same legal status NAC, NAC's up to the same, the tax channel is not NAC Change. "" Three unchanged "by Jiangsu Province and Nanjing, as government support of the important reasons. In the course of 3 years of development, on the South seeking win-win situation between the efforts to develop fruitful. For example, after the reorganization, SAIC will play an effect of NAC was the most difficult assets - Nanjing Fiat assets, so that's the most mature of the joint venture Shanghai Volkswagen to run, successfully convinced the German public, it turned into the fourth Shanghai Volkswagen factory, so that spare capacity NAC Yuanyou expeditious performance effect, first to build cars more than 100,000 years; the same time, Youyi the fastest speed, lowest cost, to solve the public worry about capacity shortages in Shanghai Wen Ti. This is undoubtedly to SAIC, Nanjing Auto sides, both the Shanghai and Jiangsu Province are satisfied. Therefore, the search for mutually beneficial model to promote restructuring, and development to solve the problems encountered, is to straighten out the best interests of the two rules.

Obstacles for regional reorganization, the central government knows it. October 2010, the State Council issued "The State Council on the promotion of the views of corporate mergers and acquisitions" will promote cross-regional mergers and acquisitions restructuring as the breakthrough point and focal point, which in "the system to eliminate barriers to corporate mergers and acquisitions," explicitly mentioned, on the one hand, limited cross-regional mergers and acquisitions to clean up the provisions, in particular the elimination of the regions themselves resolutely to restrict foreign enterprises mergers and acquisitions of local enterprises to implement the provisions. On the other hand, straighten out the relationship between regional distribution of benefits. Without prejudice to the provisions of relevant state policies under the premise of regional assets, according to the size and profitability of enterprises, signed after the corporate merger and reorganization of the tax sharing agreement Li Yi, and properly solve the industrial added value of corporate mergers and restructuring the ownership of such statistical data, to achieve corporate mergers and acquisitions share the results. In this sense, a lot of practice on South cooperation, with the new "views" in line, is a good attempt.