Yinlong Crisis in Dong Mingzhu

Text/Tanma Blue Flag

From Handan East Station, go west along Hanwu Expressway, and you can reach Wu ‘an City in an hour’s drive. After crossing the Wu ‘an boundary, the castle peak is faint, and there are chimneys of all sizes in the light gray background in the distance.

Wu ‘an, dotted by the Taihang Remnant Vein, has been a major smelting town in China since ancient times. Its history of mining and smelting iron began in the Warring States and flourished in the Western Han Dynasty, and lasted for more than 2,000 years. Wu ‘an, which made its fortune from underground resources, was known as the local "Little Beijing" decades ago. With the strong attraction of steel and other industries, a large number of foreigners flocked to Wu ‘an, and the scenery was the same for a while.

However, the county-level characteristic economy dominated by steel not only brings a halo to Wu ‘an, but also brings troubles of environmental pollution to Wu ‘an. High pollution was another image of Wu ‘an, and seeking economic transformation has become a top priority for Wu ‘an.

In April 2012, Wu ‘an Yinlong New Energy Industrial Park was established. This factory covers an area of 2,600 mu with a total investment of 30 billion yuan. There are Hebei Yinlong Xinyuan Co., Ltd., North Aoti Nanotechnology Co., Ltd. and Zhuhai Guangtong Automobile Company Handan Branch, which can provide tens of thousands of jobs. As a gift from Wei Yincang, the founder of Yinlong New Energy, to his hometown, the annual output value of the industrial park can reach 120 billion yuan after it is fully put into operation, which is equivalent to rebuilding Wu ‘an.

It’s been 30 years since Wu ‘an was founded in the county, and now the local ruffians have all gone, the steel mills have cut production, the coal mines have been closed, and the most promising new energy sources are not working.

The taxi driver’s master chatted with Hunting Cloud Network about Wu ‘an’s past, and when it comes to new energy, his expression suddenly faded. Wu ‘an Yinlong New Energy Industrial Park, a factory with all the hopes of Wu ‘an sprinting for a new economy, and Yinlong, led by Dong Mingzhu, are currently mired in the whirlpool of public opinion about the suspension of production.

On June 1, 2018, during a field visit to Wu ‘an Yinlong New Energy Industrial Park, Hunting Cloud found that the seriousness of Yinlong’s production suspension was beyond imagination, and its influence was far beyond its own scope. The changes that have taken place in a startup enterprise are, to some extent, the projection of the whole industry’s rapid progress.

The bus inventory is shocking, and it has been dusty for too long.

There are lithium titanate material factory, lithium ion battery factory, energy storage system assembly factory and new energy pure electric vehicle assembly factory in Yinlong Industrial Park in Wu ‘an, forming a new energy industry chain that supports each other in business.

Now, this chain is undergoing a chain reaction of deterioration. Due to the sluggish business in Wu ‘an Guangtong Automobile Factory, there were no sales orders, resulting in a large number of vehicles in stock. The suspension of production in the vehicle workshop directly led to the shutdown of Yinlong battery production workshop, which led to a large number of employees leaving.

Zhao Jia, who is waiting for the bus, told Hunting Cloud that she has been working in Yinlong Battery Factory for more than three years. About six months ago, orders in the factory began to decrease, and there was not much work.

"When there was an order before, it took 12 hours and took 12 hours off; Now there is less work, 12 hours, 24 hours off, and three shifts. "Zhao Jia said frankly," I used to be tired, and I earned more than 4,000 yuan a month. I came out just to earn money. It’s nothing to work overtime. Now I earn much less, and the salary can be more than 2,000. It’s ok for female employees to earn so much, but it’s not justified for men to earn so little. Many colleagues quit because they think the salary is low and they can’t afford it financially ….. "

According to Zhao Jia, as the largest battery factory in Yinlong, the lithium titanate batteries produced here are used by the opposite side (Hunting Cloud Network Note: Hebei Guangtong Automobile Factory) and the Zhuhai Headquarters. Due to the reduction of orders for electric buses, there is no work in the battery factory.

Another employee revealed that only the No.3 workshop is now producing normally, and all other workshops have stopped. Employees have holidays and can only be arranged to go to work on notice.

　

"Why not report it to the relevant departments?"

"The relevant department replied that the insurance has been communicating with Yinlong."

"I’m doing business next to Yinlong Factory. Yinlong came over when it built the factory. It’s been five years since I built this house in my own land," Wu Dabo told Hunting Cloud Network. "At first, I cooked seedlings and sold other things at the same time. I didn’t cook, but there were more workers and more people eating, so I changed it into a small restaurant."

When talking about the business situation, Wu Dabo shook his head: "When the business was good, more than 100 people came to eat in the morning, but now it’s no good. Only a few people eat barbecue and drink here at night."

Informed sources told Hunting Cloud that they were all on holiday, and the factory didn’t pay the employees for three or four months (Hunting Cloud Network Note: no salary), and some employees left their jobs without paying the expenses (Hunting Cloud Network Note: salary). Yinlong vehicle workshop plus battery factory, originally more than 9000 people, now only more than 1000 people have left.

This person also revealed that according to the agreement signed by Yinlong and relevant partners, Yinlong can get a three-year financial subsidy (Hunting Cloud Network Note: this subsidy does not refer to the national financial subsidy for new energy vehicles), and now it has been replenished for three years, and no subsidies will be made. The insider said that because the car made by Yinlong was "unqualified" (note: short cruising range here), if it could not be sold, there would be no order.

One of the manifestations of the decrease in bus orders is the increase in bus inventory. In Yinlong Guangtong Automobile Factory, a large number of buses are accumulated in the open space around the factory because they cannot be sold externally. These unsold buses are mainly in three colors: green, blue and pure white. There are about 500 vehicles at the rear and right side of the factory.

These 3355 buses are allocated to each park that has been put into production, and there are not many vehicles produced in each park. Therefore, the inventory of 500 buses in Wu ‘an Yinlong Industrial Park is shocking, and the inventory pressure in Wu ‘an factory area can be imagined.

Seeing the amazing inventory of Guangtong Automobile, it is not difficult to understand that Yinlong Battery Factory took the initiative to stop production. It can be judged that those dusty buses have been parked on the site for some time. They are either unsold vehicles with problems or normal unsold vehicles, and either one is Yinlong’s trouble.

The pure white bus is the latest production, and it can be seen that drivers drive it in and out from time to time and drive on the ring road of the factory. Yinlong employees told Hunting Cloud that this was a new car road test.

For the large-scale shutdown of Wu ‘an Yinlong factory, some people choose to leave, while others choose to stick to it, no matter what kind of choice they make, it is for their lives.

Employees have mixed feelings: some choose to leave, while others choose to stay.

In Wu ‘an, when you ask how to get to Yinlong Factory, people in their seventies can skillfully show you the nearest way. In Wu ‘an, it is not too much to say that Yinlong is a household name.

Walk from Wu ‘an Town, cross the high archway of Xichangyuan Village, turn two corners in the village, and walk not far to the back door of Yinlong New Energy Industrial Park. Most people in the neighborhood work in Yinlong. At around 8:30 in the morning, employees in Yinlong green overalls can be seen riding electric cars through the village.

As to why he chose to stay, Zhao Jia told Hunting Cloud Network that Wu ‘an is strict about environmental protection, steel mills are reducing production, and Yinlong’s environment is much better than that of steel mills, with buses commuting and dormitories to live in, which provides great convenience for employees.

"It would be better if the benefit of the factory is good. After all, the environment here is better, the work is not too tiring, and the steel plant is too dirty, so we women workers are reluctant to go," Zhao Jia explained.

In Yinlong Industrial Park, there are all kinds of living facilities, such as staff dormitory, dining hall and staff activity places. The environment in the park and workshop is much better than that in local steel mills, cement plants and chemical plants in Bi ‘an, so Yinlong Factory is still a good choice, even the only choice, for local employees in Wu ‘an. It is not difficult to understand why some people are still unwilling to leave their jobs after being owed wages for several months.

In addition, some employees revealed that Yinlong mainly left the front-line production staff, that is, "those who made batteries", while there were more than 30 people in the quality control department, and fewer employees left.

For the employees who left, some people are full of resentment against Yinlong; For those who stay, some people try their best to maintain the positive image of Yinlong, thinking that dismissing employees is the company’s downsizing and increasing efficiency; There are also on-the-job employees who reveal their true thoughts and hope that the media can make some objective reports, which are neither partial nor exaggerated, so as to urge Yinlong to pay attention to the interests of employees.

Of course, more local people hope that Yinlong can recover, which is not only out of the selfishness of finding a job and supporting the family, but also the expectation of Wu ‘an’s economic transformation as a member.

Wei Yincang’s "Black Hole" Superimposes Dong Mingzhu’s "Great Leap Forward"

Wei Yincang, a native of Wu ‘an, Handan, won the first bucket of gold in his early years in Wu ‘an.

In 2008, Wei Yincang founded Yinlong New Energy Co., Ltd. in Zhuhai and entered the field of new energy; In 2010, Zhuhai Yinlong spent 57.5 million US dollars (about 400 million RMB) to acquire 53.3% of the shares of American Aoti, and Yinlong mastered the production technology of lithium titanate battery; Since the implementation of industrialization investment in 2009, Yinlong has carried out a comprehensive layout around lithium titanate core materials, batteries, motor control, charging equipment, energy storage and pure electric vehicles.

In 2016, after Dong Mingzhu, who regarded Yinlong as a dark horse, failed to acquire Yinlong in Gree Electric, he joined hands with Dalian Wanda Group headed by Wang Jianlin, Suqian Hanbang Investment Management Co., Ltd. under Liu Qiangdong, CIMC Group and Beijing Yanzhao huijin international Investment Co., Ltd., a mysterious shareholder, to jointly increase the capital of Zhuhai Yinlong by 3 billion yuan. Since then, Dong Mingzhu entered Yinlong, and the iron lady’s tough work style began to permeate every corner of Yinlong.

Later, everyone is familiar with the story. Yinlong’s management was reshuffled, founder Wei Yincang left the post of chairman, and Gree executives entered the core management.

The shutdown of Wu ‘an Yinlong New Energy Industrial Park is not an isolated case, and other industrial parks invested by Yinlong all over the country are also facing similar difficulties.

In 2017, Dong Mingzhu signed a project cooperation agreement with Luoyang on behalf of Yinlong New Energy and Gree Electric, including Yinlong’s investment of 15 billion yuan to build a new energy industrial park in Luoyang High-tech Zone. Now, half a year later, Luoyang Industrial Park is still a "wilderness".

The situation of Yinlong Chengdu Industrial Park is also not good. The automobile factory is in a semi-stop state because there is no order, and the second phase of the project, namely the lithium titanate battery project, is suspected to be in a state of stagnation.

As a key park of Yinlong in North China, Shijiazhuang Park was once one of the three production bases of Yinlong, and now some workshops are also in a state of suspension.

Yinlong has always been a "dark horse" among new energy automobile enterprises. From the acquisition of Aoti Nano to Dong Mingzhu’s shareholding with a number of star entrepreneurs, Yinlong’s aura is incomparable to ordinary enterprises. The root cause of Yinlong’s large-scale shutdown is not from a single factor — — It is not only related to the things in Yinlong gene, but also to the violent changes of Yinlong in recent years and the Great Leap Forward.

After Dong Mingzhu became a shareholder in Yinlong, a large-scale industrial park was built in order to "scramble for land" before the new energy policy was tightened. At present, Yinlong has at least 11 industrial parks in China. After Dong Mingzhu became a shareholder in Yinlong, the total investment of new energy industrial park projects signed by Yinlong reached at least 80 billion yuan.

So, where does the money for investing in industrial parks come from? Borrow.

In May 2017, CITIC Bank granted a credit of 27.6 billion yuan to Zhuhai Yinlong Group, which can be used for pledge financing of subsidies for new energy vehicles, and provided construction loans totaling 8 billion yuan to Chengdu Yinlong and Tianjin Yinlong bases. In addition to CITIC Bank, many banks such as China Construction Bank and Ping An Bank also provided financial support to Yinlong.

Dong Mingzhu’s "Great Leap Forward" only had a strategic position, and did not consider too many consequences. As of December 31, 2017, Yinlong’s total assets were 31.512 billion yuan, while its total liabilities reached 23.767 billion yuan.

Dong Mingzhu governed Yinlong in his own way. After "taking the pulse" for Yinlong, she said rudely that from a cultural perspective, Yinlong lacks corporate culture and craftsmanship, and it must be completely subverted; From the business model, Dong Mingzhu’s "dagger" stabbed Yinlong directly — — Yinlong used to rely on bank financing to survive. As a manufacturing enterprise, it should rely on the market to solve problems.

Careful people will find that since Dong Mingzhu dominated Yinlong, Yinlong official website has made great adjustments, and the "four-way win-win" model of bus companies, new energy vehicle companies, local governments and financial institutions that Yinlong had vigorously promoted before has disappeared.

According to Yinlong’s business model of "zero-price car supply, 10-year lease, 10-year warranty, vehicle replacement and win-win for all parties", bus companies only need to do a good job in operation scheduling and management, and vehicle manufacturers are responsible for the 10-year warranty of the vehicle "three electricity" system. The bus pays the rent by means of financial lease, with zero down payment and the car payment by ten-year installments.

This model can alleviate the one-time payment pressure of local finance and increase orders for Yinlong, but it is difficult for Yinlong to obtain sufficient funds from the sales of buses to support the further development of the enterprise. It can be inferred that Dong Mingzhu has denied this model.

While Dong Mingzhu emphasized "relying on the market to solve problems", Yinlong has obviously not done it.

Yinlong’s main lithium titanate battery product has many advantages: it can be quickly charged and discharged in 6 minutes, can withstand wide temperature (-50℃~+60℃), has a 30-year cycle life, has high safety without fire and explosion, and has low life cycle cost.

However, the disadvantage of lithium titanate battery is also obvious: its cruising range is short, which is not attractive to consumers who are full of mileage anxiety at present, and its products are mostly used in the bus market. After all, the growth of the city’s bus market is limited, and it will face bottlenecks to a certain extent. Now the suspension of production in Wu ‘an Yinlong factory is directly related to this.

The operating data of Yinlong in recent years is not ideal. According to Gree’s previous announcement, Yinlong’s operating income in 2016 was 7.898 billion yuan and its net profit was 836 million yuan. It is worth mentioning that the amount of state subsidies declared by Yinlong in 2016 alone was as high as 2.135 billion yuan. In 2017, Zhuhai Yinlong’s operating income was 8.752 billion yuan, its net profit was 268 million yuan, and its net profit decreased by 67.94%.

In response to the current shutdown event, the relevant person in charge of Yinlong said that Wei Yincang, the founder of Yinlong, left some black holes. At present, Yinlong has carried out internal rectification around product quality, supply chain management and manufacturing. Due to the great changes in Yinlong’s senior management team and the implementation of new management concepts and standards, the supplier system has been reshuffled, and some suppliers have failed to get payment due to quality problems. According to incomplete statistics, the overdue payment of Yinlong is at least 1.2 billion yuan.

Therefore, the present predicament of Yinlong is caused by the superposition of Dong Mingzhu’s "Great Leap Forward" expansion and the "black hole" left by Wei Yincang, not by a single factor. It is worth mentioning that the operating difficulties faced by Yinlong have affected its IPO process.

Only eight months after China Merchants Securities entered the counseling, the listing of Zhuhai Yinlong came to an abrupt end.

Regarding the latest progress in the internal rectification of Yinlong, Hunting Cloud Network tried to interview the relevant person in charge of Yinlong, but the other party did not respond.

The future is uncertain and there is not much time left for Yinlong.

The measures taken by Yinlong can be seen from the employees.

In the face of the shutdown of the Wu ‘an factory, at the beginning, Yinlong adopted the practice of sending some of its employees to Gree for digestion. To this end, Gree also specially held a "double election meeting" for Yinlong employees, and trained these employees of Yinlong. Some employees are quite satisfied with this.

Yinlong under Dong Mingzhu is now facing a complicated situation.

It is rumored that Yinlong will shift from bus products to passenger car products, which means that a number of new production lines and teams need to be established as soon as possible, and passenger cars need to be developed. Is there room for Yinlong in the already crowded electric passenger car market?

In addition, if developing passenger cars, Yinlong’s lithium titanate battery is absolutely impossible. Yinlong needs to find new battery technology or purchase battery products produced by other enterprises. If Yinlong wants to develop ternary batteries by itself, unless it has a long-term technical reserve, time and market will not allow it.

Or, it is also a good choice to merge with other potential battery companies and save the country by curve. The problem lies in whether there is a good target and whether Yinlong has enough financial support.

For new energy automobile enterprises, these three years are extremely crucial at present, and the rapid decline of subsidy policy will make the whole vehicle and parts enterprises reshuffle.

There is another test. Will the shareholders who have been investing money and can’t harvest continue to support Dong Mingzhu and Yinlong?

There’s really not much time left for Yinlong.