Chapter 6 I did not cultivate a good successor for Brilliance

Review background: The appearance of Yang Rong is very heroic. In July 1991, he bought 46 million shares of Shenyang Jinbei Bus Factory at the price of the original shares. In October 1992, he repackaged the unremarkable Jinbei Bus with poor returns and sold it under the name of Brilliance Company. The successful listing on the New York Stock Exchange, as the "first stock in a socialist country", caused a huge sensation on Wall Street.Afterwards, he led Brilliance to try to save China's automobile industry, which had lost its fighting spirit and was sinking day by day; in 1995, Yang Rong took over the management of Jinbei Bus as a major shareholder and developed a new type of "Sea Lion" brand passenger car , and made it quickly become the No. 1 car brand in the light bus market. At the end of 1997, Brilliance introduced German technology and equipment and announced the establishment of a production line with an annual output of 100,000 cars.Since 2000, Brilliance has cooperated with five internationally renowned automobile companies including BMW, GM and Mitsubishi to implement the "Five Golden Flowers" project.In December of the same year, the first generation of "Zhonghua" brand cars rolled off the production line in Shenyang, and Brilliance's sales revenue and after-tax profit in that year were second only to Shanghai Volkswagen and FAW-Volkswagen in the auto industry.

In the summer of 2001, Yang Rong negotiated a joint venture project with British Rover Motor Company and decided to set up a new factory in Ningbo, Zhejiang Province.And he personally also ranked third on the "China Rich List" published by "Forbes" magazine with assets of 7 billion yuan. From these aspects, Yang Rong seems to have succeeded.But enough, this person who is good at designing mazes was finally lost in the huge and misty "capital maze" designed by himself. In the autumn of 2001, Brilliance Assets Receiving Group was established in Liaoning Province. On March 11, 2002, the negotiation between the Liaoning provincial government and Yang Rong on the nature of Brilliance's assets broke down; in June of the same year, the board of directors of Brilliance Automobile dismissed Yang Rong from the positions of chairman and president; on October 18, the People's Procuratorate of Liaoning Province A global arrest warrant was issued for Yang Rong's alleged economic crimes, formally apprehending Yang Rong.And Brilliance also changed four groups of top managers like a lantern in the following three years, which was seriously damaged. By January 2006, when Qi Yumin became the chairman of Brilliance Holdings, Brilliance lost nearly 400 million yuan, and the factory almost lost money. is at a standstill.

In this way, Yang Rong became a fugitive wanted criminal. On the other side of the ocean, he watched helplessly that the "empire" he had built in 10 years declined and sank day by day. Looking back now, all the fuses that led to the incident were nothing more than Yang Rong’s decision to put the Rover project in Ningbo, but he forgot the mentality of the local government. From the perspective of the Liaoning Provincial and Shenyang Municipal Governments, Yang Rong’s behavior is no different Yu betrayal!Later, he also lost his mind when dealing with political and business relations. Yang Rong forgot that at many critical moments, entrepreneurs' "political game skills" often determine the fate of the company.The China Financial Education Development Foundation, which was co-founded by Yang Rong with Hainan Huayin, China Finance Institute and the Education Department of the People's Bank of China for Brilliance's listing in the early years, has become his own "Achilles' heel".And its "industry-finance" layout has also been criticized, although Yang Rong himself disagrees.

Behind all the defeats, the most painful and passive thing for Yang Rong is the collective betrayal of his four assistants who are called Brilliance's "Four King Kongs", which he relies heavily on. In August 2005, Yang Rong said in a telephone interview with the "Chinese Entrepreneur" magazine: "I did not train a good successor for Brilliance." From the joint venture in 1991 to my departure in 2002, I have devoted all my efforts to this enterprise.Seeing the current Brilliance, I feel as if I have knocked over a five-flavored bottle, which is very unpleasant.As a founder, it is impossible for me to be happy to see Brilliance losing money.Brilliance left one person, and I was responsible for the decline in three years. At least I did not cultivate successors. There was no talent training plan in the early days, and now an unexpected incident has caused the company to decline to this point.

If I have the opportunity to go back to save this company, I must first change my previous management model, instead of being in charge of JJ, I should guide and train a group of people, so that they can still run the company well when I am not in the post.Cultivate a group of successors with such a heart, that is the real master of the enterprise. If an entrepreneur wants to run a business well, first of all, he must run the business with heart. This is very critical, and this is a prerequisite.The problem Brilliance is facing now is that those who want to do a good job in this enterprise cannot decide the fate of the enterprise.

Secondly, the established development blueprint of an enterprise cannot be arbitrarily changed and negated by personal prejudice.In an enterprise, the successor leader should not completely overthrow the former leader.As a company grows so big, it cannot change its course arbitrarily. This will cause big problems.In the past, Brilliance followed the path of integrating finance and industry. Later, they said that they only focus on industry and not finance, but the facts have proved that this path is not feasible.When I left, the financial plan for the Ningbo Rover project had already been set up, why was it not implemented?Otherwise, Zhonghua Car will not be what it is now, and Jinbei Bus will also get a good return on investment.What a pity!

Some people have always had a lot of objections to my approach of "combining industry and finance".I think it is a special argument in the process of transition to just say whether a person is in finance or in industry.In the process of perfecting the market economic system, this argument will be absorbed and digested.In the environment of a sound financial system abroad, there is no clear division of finance and industry. The key is to look at the proportion of output value and profit in the group.If the output value of the financial business exceeds that of the industrial sector, it is a financial-based group.My idea is that Brilliance has three pieces under one holding company: first, the automobile part, I have "Five Golden Flowers" and Rover; second, the infrastructure part, there is the Ningbo Bridge project, and I have thought about buying The Jinmao Tower, as the headquarters of the automobile business, is more conducive to hanging the "China" brand in the Asia-Pacific region; third, the financial sector, such as insurance and trust.However, 80% of the group's output value will come from automobiles.

Don't look at me as a courageous person who goes forward bravely. In fact, I am a very conservative person.Delong and Zhongke both talked to me, and even drafted the contract, but I was not so courageous, so I didn't sign it in the end.I have never used tradable shares to mortgage loans, and I have never used bank loans to speculate in stocks. I know what the red line is, and if you break the red line, you will be out of control. In 1996, Su Qiang took 50 million yuan from Jinbei Bus to Shanghai to speculate in stocks. In the end, I went to Shanghai to recover the money as a company legal person with a legal person certificate.A factory is a factory, and managers cannot get involved in stocks or the capital market. I will replace anyone who is involved.Su Qiang is kind enough to use the company's money to speculate in stocks, hoping to improve the company's food, but how can he do this, what if he loses money?Factories are about to shut down, and tens of thousands of people have no food to eat.Playing finance in the enterprise will definitely kill the enterprise.

After I left, the remaining 4 people (referring to the "Four King Kong") sold stocks on the premise that the company's profits would not meet expectations. This behavior is illegal in Western countries.They want to quantify the deal with the government, but the promise they make to you is theoretical. The fulfillment of this promise first depends on what you have contributed to the company, and you can't always think about how the company treats you.After I left, their treatment remained the same, with an annual salary of more than 300,000 US dollars plus a 5% profit commission.When I was there, it was stipulated in the contract that the company did not meet the specified profit index, and the 5% was not allowed to be raised.Last year (2004) they managed to make a little profit, and they still took this commission, which didn't make any sense.After I ordered, no one supervised them.I think these 4 people are very smart, but there must be someone to lead them. As a result, all 4 people want to be the leader, and these 4 people are finished.I don't know if the four of you can be army commanders or commanders?Why don't I let you take care of yourself if you can do it alone? Why do I have to work so hard?My body is better now than before, why?Because I am not tired anymore.I was so tired before!Ability is accumulated over time, but talent is also required.

I think that after I left, the management of Brilliance made three mistakes in "Zhonghua".The first mistake is the wrong pricing, wrong step by step; the second mistake is that the management positions itself as a cadre in Liaoning, and wants to place the parts procurement base in Liaoning; Below a certain level, the hearts of the workers are distracted, and Su Qiang and others are also absent-minded.These three mistakes are the three mistakes that hurt the enterprise the most. The strategy I set for "Zhonghua" before I left was: enter the market at a low price, and gradually increase the price every year. The premise of the price increase is the improvement of the quality of parts and interior parts.At that time, in order to catch up with a better opportunity, the price was 129,900 yuan. For a car worth 120,000 yuan, consumers feel that this car is still good compared to Santana, but if you price it at 180,000 yuan, consumers will feel that it is not worth it if they want to compare it with Passat and Honda.

Therefore, a flash of pricing made "Zhonghua" go astray later. If the price is 129,900 yuan, after the improved interior parts of Rover come in, plus the improvement cost of 20,000 yuan, it should be 149,900 yuan, then you can sell it for 159,900 yuan.You also get a profit.After two years, 129,900 yuan of products can be produced in limited quantities.In short, Zhonghua Motors can achieve 40,000 to 50,000 units at a price of 129,900 yuan, and it can also maintain a break-even point.But in the end, it is necessary to improve the quality and increase the price to obtain profits, and this is the route. But the later management was eager for quick success, and their subsequent pricing was wrong.How can you expect the company to make a profit when the production volume is only 10,000 to 20,000 units?My prediction at the time was that it was normal for a company to lose money if the production and sales volume was less than 30,000 vehicles.In the first year, "Zhonghua" may lose 500 million yuan in policy, so let it lose.Automobile is an industry with economies of scale, and if it fails to achieve mass production of more than 100,000 units, or cannot manage in accordance with international standards, it will not be able to achieve a profit-loss balance.You just want to make money by producing 10,000 cars, is it possible?Profit should be driven by mass production, and profits cannot be made by short-term behavior.New products enter the market at a low price, and it is right to increase the price by adjusting the configuration every year. Why does Brilliance follow the conventional path of other joint ventures in China, blacking out the common people's money first?The short-term behavior has reached the extreme, and in the end it is yourself who cheated yourself. The joint venture with Rover could have made up for the lack of "Zhonghua" interior parts and engines, but then this project stopped.In terms of interior parts, I sent 4 prototypes to Rover in the UK in 2001, and Rover helped me improve all the interior parts, and the improved prototypes were all built, very beautiful, and the whole car was completely new .And it also matches the Rover 2.5-liter engine. Rover agrees to use the "Zhonghua" trademark on the engine installed in my car.Its engine is better than the original Mitsubishi used by "Zhonghua", and the two are not on the same level.If you transform "Zhonghua" in this way, you can imagine what kind of car the Zhonghua cars were in 2003 and 2004.Even if I'm really... a bad guy, this bad guy is still valuable, not to mention I'm not a bad guy, why not use Rover's improved engine and interior parts?What a pity. The decline in quality is also related to relevant policy mistakes in Liaoning Province.They believe that Liaoning's auto industry should be supported in Liaoning, and should not be supported by parts factories in other provinces and cities.They adjusted the spare parts area, dumped a large part of the spare parts factories outside Liaoning, and re-established a batch of new spare parts factories.This kind of local protectionism is still prevalent today, which is wrong.After I left, the four of Su Qiang and the others positioned themselves as cadres in Shenyang. The cadres in Shenyang must consider the interests of Shenyang. If parts and components can be produced in Shenyang, Liaoning, they must be produced locally, starting from Ningbo. pull back.How can their backtracking supporting model improve the product quality of an enterprise?It is impossible to improve only by going backwards.Based on my quality requirements, if I look at BMW at the top and Rover at the bottom, I think these parts are unqualified. In addition to the pricing strategy, there was another route that I didn't tell them at the time.In my opinion, it is necessary to adopt a diversified approach to ensure the sales of the enterprise.The so-called diversified sales are not based on production to determine sales, or vice versa, but to use many tools to achieve sales.Back then, an order was required to place 30,000 units. After reaching the batch size of 30,000 units, the parts suppliers became more motivated, and they were able to put into production with confidence, which improved the quality and boosted the morale of the workers.If the batch is small and the production is determined by sales, it will be opened today and closed tomorrow, morale will be low, and quality will not be guaranteed.Therefore, it is necessary to do a good job of financial subsidies for sales, share sales costs and advertising costs for enterprises, and minimize the costs of enterprises.This requires extracorporeal circulation outside the automobile industry, and other means are used to ensure that "Zhonghua" is successfully put on the market.Therefore, it is not enough to understand the industry alone, but also to understand finance.Only a person who has two ideas in his mind can fully integrate Brilliance.Because "China" is a new challenge, new methods must be used to ensure that products are put on the market.But I didn't have time to talk about it, and they may not be able to use it properly after I talk about it. Brilliance's current situation is like a terminally ill patient, whose root cause is the people who don't put their heart into managing it.It is the same set of Taijiquan, whether you do it with your heart or not, the airs are exactly the same on the surface, but when you really need to use four or two to pull a thousand catties, it is impossible to be powerful with airs.Because he didn't master the way of using force, and he didn't use his heart to fight. If I have the opportunity to run Brilliance again, I will definitely do my best to save the company, otherwise I will not make a comeback.If I want to make a car, I will definitely go back to the original place. If I can't, I will end my career in the car industry.From now on, I will never take the road of car manufacturing again, and I will never ask again.