Chapter 38 1. Two Gree "fighting storms"

Speaking with facts and capabilities, Gree's prosperity proves that state-owned enterprises can also flourish.The future is full of various variables. In the face of fierce market competition and challenges, trademark ownership has become a fierce battle on the way to build the Gree brand. On November 4 and 5, 2005, Gree Electric suddenly issued a public statement, saying that some companies used the brands and good images of "Gree Electric" and "Gree Air Conditioning" to promote themselves and their products in special reports published in the media. Misleading the majority of investors and consumers is an infringement of the Gree Electric brand.Some of the companies mentioned in Gree Electric’s statement are none other than Zhuhai Gree Small Appliances Co., Ltd. (referred to as “Gree Small Appliances”), which is also a subsidiary of Gree Group.Gree Electric's "sudden" statement caught Gree Group and its subsidiaries by surprise.In order to clarify market misunderstandings, Gree Group hastened to publish advertisements, clearly stating that the "Gree" brand is owned by the Group, and Gree Group's subsidiaries, including Gree small household appliances, are authorized by the Gree Group's trademark and have the right to use the "Gree" trademark.However, Gree Electric did not shrink back, and quickly published information announcements in the media that Gree Group would pledge all the shares held by Gree Electric, which may have a negative impact on Gree Group.Soon the "cold fight" between Gree Electric Appliances and Gree Small Appliances brand competition turned into an "internal strife" between the listed company and the controlling shareholder, and even evolved into what the media called a "father-son battle".In fact, as early as three years ago, Gree Electric launched a protracted trademark dispute with the controlling shareholder Gree Group.When outsiders talk about Gree, most people will only think of the producer of Gree air conditioners, that is, the listed company Gree Electric Appliances.For a long time, with the full support of Gree Group, Gree Electric Appliances, as the only listed company under Gree Group, has made full use of various advantages of listed companies to rapidly develop into one of the best well-known enterprises in the field of air conditioning, and has developed Gree Air Conditioning into a well-known national trademark .It is precisely because of Gree Electric's special contribution to Gree Group and Gree brand that its position in the group has been at the peak of its power, and its leading role has even surpassed the group in some aspects.The independence of finance, personnel and operation makes Gree Electric an "independent kingdom" under the Gree Group, which Gree Group has no control over.The serious differences in the "specialization" and "diversification" development strategies and corporate culture have caused Gree Electric Appliances and Gree Group to gradually drift apart on the development road, and finally developed into a direct and open confrontational relationship.Gree Electric Appliances belongs to Gree Group, a state-owned enterprise group in Zhuhai City, which is a state-owned enterprise group with strong administrative characteristics.Zhuhai Special Economic Development Corporation, the predecessor of Gree Group, was established in 1985 and was authorized by the Zhuhai Municipal Government.

In 2003, Gree Group's total output value was 15.1 billion yuan, accounting for one-seventh of Zhuhai's total industrial output value.It has formed an industrial structure with industry as the main body and commerce and real estate as the two wings. It owns two well-known trademarks: Gree air conditioner and Rossini watch.From the perspective of Gree Group, the birth and development of Gree Electric Appliances are inseparable from the support of the group. Without the group, there would be no popularity of Gree air conditioners across the country.In the early 1990s, in order to support the development of Gree Electric, the group did not hesitate to stop some projects and concentrate funds on air-conditioning projects.

In 1996, thanks to the group company's efforts and active efforts, Gree Electric Appliances Co., Ltd. was officially listed, and since then it has ushered in a period of great development.After the listing, Gree Group held the equity of Gree Electric Appliances and became the largest shareholder, owning the Gree brand, major decision-making and personnel appointment and dismissal rights.Gree Electric Appliances, as the pillar and flagship enterprise of Gree Group, has formed a management model and unique culture different from the group over the years, and has accumulated a solid network of people and financial strength.According to the data of Gree Group in 2002, among the 22 billion yuan industrial output value of the group, 21 billion yuan was contributed by Gree Electric Appliances, and this figure also accounted for half of the output value of the entire Zhuhai city that year.

In 2003, Gree Electric Appliances has become the largest pillar industrial enterprise in Zhuhai. Its total industrial output value accounted for 1/3 of the total industrial output value of Zhuhai City, employing more than 10,000 people; it has maintained the sales champion for 9 consecutive years in the highly competitive Chinese air-conditioning industry , 5.16 million units of air conditioners were sold that year, and the sales revenue exceeded 10 billion yuan. The "Gree" trademark is an intangible asset of great significance to the production and operation of Gree Electric Appliances. The Gree trademark was established by Gree Electric Appliances in 1991, and the word "Gree" is still in the handwriting of Zhu Jianghong.Since Gree Electric Appliances was not a listed company at the time, but a subsidiary of Gree Group, it could only hand over the self-created "Gree" trademark to the group for free. At that time, Gree had little influence, and other subsidiaries were unwilling to use the "Gree" trademark, but Later, with the expansion of Gree's influence, various subsidiaries began to compete for the Gree trademark and even the name of "Gree Electric".The disadvantage of state-owned enterprises is that the interpersonal relationship is complex, each with its own background.Some people take responsibility for the company's performance and push it away when it fails.As a leader of a state-owned enterprise, in addition to engaging in market operations and technology development, he also spends a lot of energy and thought on dealing with complex interpersonal relationships.This has led to the fact that state-owned enterprises often do not act in accordance with market rules, and it is not uncommon for some people to engage in favoritism and fraud for certain purposes.The relationship between Gree Electric Appliances and Gree Group has always been delicate.Gree Group has changed its chairman three times in a row, and everyone seems to be in harmony with Gree Electric Appliances.Coase, the Nobel laureate in economics, made a famous statement: the first condition for a company to succeed is clear property rights.Entrepreneurs of Gree Electric Appliances only have the right to operate, and any major decision made by the company must be reported to each level and wait for approval from level to level.The air-conditioning industry can be described as the most thoroughly market-oriented industry in China.As operators of listed companies, Gree Electric Chairman Zhu Jianghong and General Manager Dong Mingzhu believe that they do not fully represent the interests of the major shareholder Gree Group, but also represent the interests of small and medium shareholders, and they do not agree with the orders issued by the group.When it was not listed, Zhu Jianghong once had a fierce quarrel with the chairman of the group at that time for a decision, and even slammed the table, fighting from morning to noon, and finally won.Similar things happened again and again. He even prepared the resignation report, and if he failed, he resigned and retired.People from Gree Electric Appliances are generally reluctant to talk about their relationship with Gree Group, and they have repeatedly stated that they have nothing to do with Gree Electric Appliances regarding other industries under the Gree Group.In the early years when Gree Electric's business was in full swing, Gree Group seemed to be able to tolerate this kind of disrespect, and the two basically lived in peace.However, due to a series of management problems that existed and occurred within the group, the conflict between Gree Group and Gree Electric Appliances began to intensify.Gree Group has repeatedly asked Gree Electric to provide financial support in the name of supporting the development of brother companies, and even deposited deposits in the empty Gree Group Finance Company, but they were all rejected by Gree Electric executives.

In May 2003, Gree Group reorganized and established Gree Group Finance Co., Ltd., requiring its subsidiaries to contribute capital. Among them, Gree Electric Appliances invested more than 10 million yuan and even borrowed from banks with guarantees provided by Gree Group. This is a serious violation of regulations. Behavior.At that time, Gree Electric Appliances had nearly 2 billion yuan in cash, and the group hoped that the cash would be kept by a financial company, with a minimum investment of 500 million yuan.Regarding the issue of the financial company, Gree Electric believes that due to hidden dangers in the group's operating conditions, the financial company must have certain risks.At the same time, according to the Document No. 72 issued by the China Securities Regulatory Commission in 2001, listed companies must ensure financial independence and are not allowed to share bank accounts with controllers. Gree Group's wish has not been realized.Conflicts between the two parties began to accumulate. Gree Group made a big fuss about the account that Gree Electric was found to be used to pay dealer rewards two years ago, accusing Gree Electric of embezzling state-owned assets, and then calmed down because no personal problems were found.

In 2003, the long-term conflicts between Gree Electric Appliances and its parent company, Gree Group, finally broke out. The institutional conflicts between superiors and subordinates were made public and hyped by the media as a "father-son dispute".This year, Gree Group leased the "Gree" brand to two small household appliance companies in Zhongshan, and two "Gree" brands appeared in the market.This approach was strongly opposed by Gree Electric Appliances, who believed that small household appliance brands would have a negative impact on Gree air conditioners.Under the strategic thinking of "diversification of the group and specialization of subsidiaries", Gree Group has controlled or wholly owned more than 60 subsidiaries, including three small household appliance companies, including Zhuhai Gree Small Appliances Co., Ltd. Home Appliances Co., Ltd., Zhongshan Gree Small Appliances Co., Ltd.It mainly produces "Gree" brand electric fans, electric heaters, electric hot pots, rice cookers, induction cookers, drinking fountains, electric kettles and other small household appliances.These three small home appliance companies have simple production equipment and no core technology. Almost all parts are purchased from outside, and the quality is difficult to guarantee.Gree Group, in addition to charging an annual brand usage fee, does not participate in production, operation, finance, etc., and lacks supervision.Gree Electric once planned to acquire Zhuhai Gree Small Appliances Co., Ltd., and sent personnel to the factory to conduct a preliminary audit and investigation. It was found that the company that claimed to be profitable actually lost tens of millions of yuan, and the acquisition plan had to be shelved.

For a long time, Gree Small Household Appliances Co. has used the good brand image of Gree air conditioners in the minds of consumers, either explicitly or covertly, to promote its products. It often uses "Gree Electric Appliances, which is famous for producing professional home appliances, announces its entry into the kitchenware market" in its promotional materials. and "Gree Electric Appliances enters the small household appliances and kitchen utensils market", this kind of "skimming the ball" has seriously affected the professional image of Gree air conditioners.The reputation of Gree small household appliances is not very good in the industry, and the maintenance rate is relatively high.Since they all use "Gree", it is easy to misunderstand the public.Many consumers only recognize the trademarks and do not look at the consumption habits of the manufacturers, so they mistakenly believe that these small household appliances are produced by Gree Electric Appliances. A series of disputes caused Gree Electric Appliances undue trouble and negative impact, which seriously interfered with the normal operation order of Gree Electric Appliances and affected the brand image and reputation of Gree Air Conditioning.Gree Electric issued a "stern statement" to some domestic media, saying that the recent reports published by some media such as "Gree Electric entered the small home appliance and kitchenware market" were purely fictitious, fabricated, and groundless, and had seriously misled the majority of investors and investors. consumer.

In early November 2005, the brand competition between Gree Small Appliances and Gree Electric Appliances kicked off.Gree Group, as the owner of the Gree trademark, is trying to make full use of the Gree trademark, which has gained a high reputation in the market, to develop diversified product operations; but Gree Electric issued a solemn statement in the media, claiming that the Gree trademark belongs to itself. opposition.In fact, Gree Electric is not the only one that has encountered such troubles.At present, the brand ownership rights of many well-known domestic enterprises are in the hands of the parent company, while the listed companies can only spend high annual fees to purchase the right to use the trademark from the parent company as the controlling shareholder.It is understood that the ownership rights of brands such as "Kweichow Moutai", "Haier", "Hisense", "TCL" and "Softel" do not belong to listed companies, but are held tightly in the hands of major shareholders such as Moutai Group and Haier Group.Statistics show that in 2005, Qingdao Haier paid 63.7 million yuan in trademark licensing fees to Haier Group and Qingdao Haier Investment and Development Co., Ltd., accounting for 26.65% of its annual net profit of 239 million yuan.The trademark license fee paid by Hisense Electric also greatly increased the operating expenses of the listed company in 2005, accounting for about 10% of its 2005 net profit.In addition, according to the original agreement between Softto and the major shareholder Wuzhou Yuandong Beauty and Health Products Co., Ltd., Softto can use the Softto trademark for free until December 12, 2008, and the Softto trademark will not belong to Sofitel until 20 years later. Ford.At present, Sichuan Changhong has become one of the few listed companies with trademark rights.Through asset replacement last year, Changhong Group transferred its Changhong trademark intangible assets to Sichuan Changhong, a listed company, at a price of 1.378 billion yuan.Brand experts pointed out that the trademark dispute between the group company and the listed company reflects the contradiction between the listed company's own development and the holding parent company.On the other hand, the competition between controlling shareholders and listed companies for trademark resources will to a considerable extent restrict the value of assets owned by listed companies and profit distribution. This issue should arouse the attention of relevant companies.

In September 2004, Gree Electric invested 148 million yuan to acquire the corporate equity of four subsidiaries held by the parent company Gree Group, Lingda Compressor, Gree Small Appliances, Gree Electric, and Xinyuan Electronics. The brand conflict of small household appliances has eased the "father-son dispute" with Gree Group.And on December 21, 2005, it signed a trademark right transfer contract with the group. According to the stock reform plan at that time, Gree Group, the major shareholder of Gree Electric Appliances, made a commitment to transfer the "Gree" trademark to Gree Electric Appliances for free.The much-concerned issue of ownership of the right to use the "Gree" trademark has finally come to an official conclusion.

On March 28, 2006, Gree Electric (000651) announced that the "Gree" trademark transfer procedures had been completed, and the State Trademark Office had confirmed that Gree Group's application for transferring the "Gree" trademark to a listed company would come into effect on March 27.So far, the dispute over the use of the trademark between Gree Electric Appliances and Gree Group that lasted nearly three years has been completely "closed".