Weichai: From the bankruptcy to the leader of "China Power"

Annual sales income increased by 100 times, profits and taxes increased by 124 times, profits increased by 530 times, and total assets increased by 21 times. Within a short period of 10 years, the industry supporting role on the verge of bankruptcy became the leader of “China Power”. Why is Weichai?

As the largest auto parts group in China, the first company in China with its own independent intellectual property rights, the “Lan Qing” high-power Euro III engine, has made Hu Jintao’s general secretary stop for a long time and nodded in succession – in the industry “for the market”. In the case where the technology as a whole is not satisfactory, the flag of “created by China” is raised. Why is it the case for firewood?

Acquisition of Hunan Torch, reorganization of ST giant Shandong, and acquisition of Baudouin, France. On June 18th, Shandong Heavy Industry Group, with Weichai Holding Group as its core, was established. An old state-owned enterprise made full use of market mechanisms to perform its operations in capital. Why are we getting firewood?

With these questions, the reporter went into Weichai and took a closer look.

Review the situation and follow the trend

In a perfectly competitive market, companies want to win, they must clearly understand the risks they face, and wait for opportunities to leapfrog development and complete the leap into a butterfly. What strategic decision makers need to do is to review the situation and follow the trend.

As an engine plant for heavy truck companies, because the product structure is subject to the congenital deficiency of human beings, we must extend the industrial chain and explore diversification. At the crucial moment of development, Weichai took a three-step move in a timely manner: to enter the field of engineering machinery, reform of the “three-three” property rights, and the acquisition of the Hunan Torch.

It was a major decision made by Tan Xuguang in 1998 that he would soon turn the Steyr engine for heavy trucks into a complete set for construction machinery. Looking at the domestic market, the diesel engine industry is playing a big role, the automotive market is fiercely competitive, and the construction machinery sector is blank. Tan Xuguang decided to “dig more and get more water” and the goal was in construction machinery.

This data shows that currently, Weichai’s 10-liter engine has a market share of more than 82% in the 5-ton loader power market, and the medium-speed engine’s market share in the same-power marine power market is over 80. %, in the 100-800 kilowatts of power generation equipment market share of more than 50%. The perfect product structure has enabled Weichai to maintain a 21% operating income growth rate in 2008 when the international financial crisis raged.

At the end of 2002, when the company turned losses into profit, Weichai began to comprehensively implement the “3/3 system” property rights reform: 1/3 of the company’s assets and employees were separated from the main business of Steyr, and Weichai Power Co., Ltd. was established. The modern corporate governance model is becoming bigger and stronger; 1/3 of the original enterprise medium-speed business and employees stay in the old Weichai to form a medium-speed machine production base; the remaining parts and components factory and more than 3,000 employees are diverted and privatized. Transformation.

It was a far-reaching revolution for Weichai to get rid of its burdens, highlight its main business, and travel light. This was followed by a series of dazzling capital operations dramas. In March 2004, the core business followed suit. Chai Power was listed on the Hong Kong Stock Exchange and raised US$170 million. In August 2006, ST Shandong Shandong Junli was restructured to realize the backdoor listing of the intermediate-speed business of existing assets. After the successful restructuring of the 13 sub-sectors, the foreign investment was 50 million yuan, cumulatively more than 6,000 jobs were added, and state-owned assets were used to mobilize 250 million yuan.

For the old Weichai, the greater risk lies in the industry trend that all automakers want to build their own engines when they reach a certain scale. Weichai must retain its advantages and must have greater competitiveness in terms of scale, technology, branding, and marketing. In August 2005, Weichai took a decisive action to “shoot” the torch under the torch with 1.023 billion yuan. It is the service that slashes the revenue of Shaanxi Heavy Duty Truck, Fast Gear, Hande Axle and Zhuzhou Spark Plug. Weichai is thus able to provide a “Powertrain Solution Package” to integrate a competitive and complete automotive industry chain. At the end of January 2009, when the international financial crisis broke out, Weichai bucked the trend and made a successful bid for Baudouin, a French company with a book value of 13.81 million euros, for a total of 2.99 million euros, establishing a bridgehead for entering the European market.

The key technology can never be cited

It is a shortcut for advanced countries to catch up with advanced technology while taking the line of “introduction, digestion, absorption and re-innovation”. However, this “market-for-technology” strategy is not satisfactory in domestic implementation. It is often not cited in the technology. Come, lose the market and lose the brand.

Tan Xuguang believes that avoiding a cycle of "introduction, backwardness, re-introduction, and backwardness," must work hard at "digesting and absorbing"; at the same time, it must be understood that key technologies can never be cited, and companies must dare to independently research and develop.

Wei Chai's "starting" product was a heavy Castel engine imported from abroad in the 1980s. The great thing about Weichai is that it makes Steyr's technology the ultimate. Tan Xuguang pointed out that the ultimate standard for measuring products is user satisfaction. The introduction of foreign engines is not an idea of ​​how to do more, but it is based on China's climate, traffic, and terrain to study how to make products more stable and cost-effective. The shift in R&D concept has allowed Weichai scientists to leave the office and sink to the front line of the market. The "transplantation" of engines from trucks to construction machinery is a "re-innovation" of Steyr's technology applications based on market demand. Relying on continuous innovation, Weichai has increased its number of new products every year from dozens to hundreds of models, becoming China's first engine company with sales revenue of over 10 billion yuan, and the world’s first single-brand engine with a sales volume of 10 litres exceeding 250,000 units. enterprise.

It is risky to carry out major technological breakthroughs. Enterprises are not research institutes, and they must count input and output accounts. In 2003, when independent research and development started, Weichai made a bold revolution in the R&D system. In the world's top three high-tech cities, Austria and AVL Corporation jointly built a research center, and sent over 20 engineers every year. Tan Xuguang’s point of view is: instead of spending money on technology, it is better to send people out and return the technology. Two years later,

China's first high-power Euro III engine with completely independent intellectual property rights was announced.

Treating independent research and development with an open mind, Weichai always insists on "not closing," "not excluding," and "not violating." They have formed alliances with more than 30 companies at home and abroad to set up research and development communities. At the same time, relying on their own complete industrial chain, they integrate and innovate multiple independent product technologies to increase research efficiency. The state stipulates that in 2008 the implementation of the State III standard and the implementation of the State IV standard in 2010, Weichai will take the lead and in 2006 it will produce the Euro IV product and last year it will also produce the Euro V product. The R&D model of “mainly based on me and linked innovation” has enabled Weichai to enter into a virtuous cycle of “production generation, R&D generation, and reserve generation”.

Changes in corporate culture

To some extent, the culture of an enterprise is the externalization of entrepreneurship.

In Weichai, Tan Xuguang is the chairman and CEO and is the leader of the company. However, he himself is very clear-headed: Enterprises must be bigger and stronger, entrepreneurs must know how to restrain and surpass themselves, and management methods must change with the situation. He believes that Weichai has experienced three stages in its 10 years of culture: before 2001, implementing culture; 2001-2004, regulating culture; and after 2004, communicating culture.

The employee has not paid wages for 6 months. There is only 80,000 yuan in book money, and the internal and external debts are 300 million. The management is confusing and the people are divided. In June 1998, the 37-year-old Tan Xuguang took on some “tragedy and sentimentality” to serve as the oldest employee. Chief of the firewood. After exhausting efforts and repaying workers’ arrears, Tan Xuguang began drastic reforms: streamlining institutions, merging 50 departments into 30, 730 cadres retaining 217, reducing 1,114 management personnel, and grasping product quality. , After-sales service, treatment of waste and corruption, governance delays, a factory-level leader was "decided" to remove within five minutes, a troubled cadre was expelled the same day, one year, hundreds of people because of product quality problems class ...

For Tan Xuguang's “cold face” of the year, the Weichai people were very impressed and could understand: “The factory is at this stage and it is not enough to do major surgery.” What convinced them is the director's self “about three chapters”: Improper old people, not peacekeepers; require employees to do it, first of all, do not allow employees to do, they resolutely do not; ask the majority of cadres and workers to supervise every decision and behavior of the factory leaders. Upstream and effective, the implementation culture of Weichai's "reckless and vigorous, prohibition of orders" was formed at that time and has continued to this day.

Tan Xuguang did not miss the success of imperative management. As soon as the company is on the right track, Weichai begins to shift from extensive management to intrinsic management: the introduction of a series of world-leading management concepts including comprehensive budget management, lean “6S” management, and excellent performance management. Weichai’s goal is to establish A set of norms to achieve self-operation, repair and perfection, rather than rely on the first person's personal will.

After the acquisition of the Hunan Torch, Tan Xuguang began to consider more about the risks of making mistakes after the company became bigger. At the beginning of this year, Weichai hired well-known domestic and foreign consulting companies and experts to conduct a comprehensive "health check" on the company's strategy, operations, and quality of cadres, and institutionalized it; tried to implement "innovative wages" and made every one of them through the reform of the pay system. The creative energy of Weichai people is full of emotions; the company is committed to creating a new culture centered on "inclusiveness, communication, and responsibility" and forms a strong cohesive force. The ideological and political advantages of the old state-owned enterprises have been further released.

Stamping Parts

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