Chapter 48 Betrayal: The Rover project that led to the breakup

Until the beginning of 2001, Yang Rong's career showed no sign of decline. In January, in recognition of the first "Zhonghua" brand car rolled off the assembly line, the Shenyang Municipal Government held a grand ceremony and awarded Yang Rong the title of "Honorary Citizen".Yang Rong announced the company's performance in 2000. Brilliance's sales revenue was 6.3 billion yuan, the light bus market share was as high as 60%, and the after-tax profit was a record 1.8 billion yuan, second only to Shanghai Volkswagen and FAW-Volkswagen in the automotive industry. In March, a major earthquake occurred in the political circles of Shenyang. Mayor Mu Suixin and Executive Vice Mayor Ma Xiangdong were arrested for corruption.As the most well-known large enterprise in Shenyang, Brilliance has very close interactions with the government. The fall of the current head of the city government will naturally affect Yang Rong's strategic thinking.It was at this sensitive moment that he began to negotiate with Rover, a famous British car company, planning to build a new car base in the south.

Yang Rong's contact with Rover began with the engine project. After the "Zhonghua" brand car rolled off the production line, he found that the Mitsubishi engine used did not match the model, and the power was insufficient. However, Mitsubishi refused to update the technology. Under the recommendation of BMW, Rover entered Yang Rong's vision.Rover is an old factory with a history of more than 100 years. Due to its slow growth, it has suffered a lot of losses in recent years and is eagerly looking for buyers around the world.The negotiation between Yang Rong and Rover quickly rose from the engine project to a comprehensive joint venture.This is a very suitable partner with strong technical research and development capabilities and a noble brand.The cooperation methods proposed by Yang Rong include: after the joint venture, all Rover products will be moved to China for production; Rover’s British R&D center and European sales system will be maintained. Among the products produced in China every year, the Rover brand will be exported to Europe. The Chinese brand sold in China and the Asia-Pacific region; Rover helped Brilliance complete the upgrade of the engine and put the "Zhonghua" trademark on the engine.

Yang Rong's plan made it difficult for the proud Rover to accept at first.They pointed out that in China, joint venture brands are more preferred, and cars sold in the Chinese market in the future should bear the "Rover" trademark, and a trademark fee of 200 US dollars will be charged for each car.Yang Rong said bluntly: "Don't worry, I will never use your brand for sales in China, and you will definitely not be able to earn this money." Although Yang Rong's conditions are very harsh, the vast Chinese market and the fact that German Volkswagen has obtained huge profits from investing in China finally made Rover agree to a joint venture.The final agreement is: the two parties will jointly build a factory, the Chinese side will invest in land and factory buildings, accounting for 51% of the shares, and Rover will invest in products, technology and equipment.The Chinese side lent Rover 190 million pounds for the relocation of British factories, layoffs and new car research and development.

This is a long-awaited large-scale joint venture project, and it is the first time that Chinese entrepreneurs appear on the international mainstream business stage as integrators and rescuers.After entering the 21st century, the rising China began to show a more powerful force in the global economic competition. Some fast-growing large companies are trying to achieve cross-border development and industrial upgrading through mergers and acquisitions and cooperation. Brilliance and Rover’s The joint venture should be one of the earliest and most anticipated projects. Compared with Lenovo's acquisition of IBM's PC division and TCL's acquisition of Thomson TV in the future, Yang Rong's initiative and ambition seem to be greater.If this joint venture is successful, the territory of China's auto industry will be completely rewritten, and even the growth path may be drastically changed.Therefore, its significance is no less than that of Brilliance listed in the United States 10 years ago.

Negotiations were conducted in secrecy.Like all veteran Europeans who kept their promises, the determined Rover was very active, and everything went smoothly beyond imagination.After the relevant agreements were signed, Yang Rong made a decision that he regretted for the rest of his life. He decided to put the Rover project in Ningbo City, Zhejiang Province.Many years later, Yang Rong did not disclose the real motive of this decision.It seems that Ningbo is a good choice for building a factory. It has the best deep-water port in the country, and there are many auto parts companies in the surrounding area. The Ningbo Municipal Government has shown strong interest and granted Brilliance 3,000 mu of land at one time. The transfer price is one mu. Only a mere 50,000 yuan.Moreover, what moved Yang Rong was that he was allowed to invest in the Ningbo Cross-sea Bridge. This project is said to bring tens of billions of yuan in cash flow.

In the calculation of this excellent strategic architect, the moves are precise and tightly linked, and all the elements are perfectly prepared.It's a pity that he missed a seemingly unimportant point: the mentality of the Northeast government. Perhaps in the eyes of the Liaoning Provincial and Shenyang Municipal Governments, Yang Rong wanted to "slip away" this time.Since Jinbei was revived, Liaoning Province has always regarded the automobile industry as the most important pillar industry in the province, and Shenyang City has never given up its dream of "China's Detroit". They naturally hope that Yang Rong will put all its assets and projects in Put it in Shenyang.In the past 10 years, they have been responsive to Brilliance and spared no effort.Once, a Shenyang city leader said to Yang Rong: "For Brilliance, we even paid for the purchase of pants." At this time, turning around and going south, in the eyes of Northeast officials, this is tantamount to betrayal.An investment bank analyst believes, "From the perspective of Liaoning Province and Shenyang City, Yang Rong's approach is like hollowing out Jinbei Automobile and letting Jinbei Automobile transfuse blood for his projects in other provinces."

The details of the negotiations between the government and Yang Rong have never been made public, but the results of their communication are well known.The government hoped that Yang Rong would put the Rover project in Liaoning. At the beginning of the year, the main person in charge of the provincial government also proposed a "Dalian plan" in detail.Yang Rong insisted on building a factory in Ningbo, but he promised that Shenyang would still be Brilliance's bus base.Obviously, this is an answer that cannot satisfy the government.In this way, the contradiction suddenly intensified in the autumn of 2001.

Another background for the intensification of conflicts is that Yang Rong, who has always been low-key and mysterious, became extremely high-profile in 2001. He began to accept frequent interviews with reporters and appeared on the covers of various financial media.Perhaps in his view, Brilliance's grand structure is finally clear, and it's time to stand up and make a public appearance for a great cause.In the "China Rich List" published by "Forbes" magazine, Yang Rong ranked third with assets of 7 billion yuan, after the Liu brothers of the Hope Group and Yang Bin of the Eurasia Group.Before that, few people knew Yang Rong's name except the automobile industry. He became known to the world overnight as a sudden rich man.The list designer, Hu Run, calculated Yang Rong's assets based on his shareholding in Brilliance, and Yang Rong acquiesced to this.Therefore, the government's questioning of him began with the calculation of assets. The "exquisite pen" 10 years ago finally revealed its ferocious side.

The government believes that Brilliance is definitely not Yang Rong's Brilliance.According to the equity design 10 years ago, the China Financial Education Development Foundation is the real owner of the company, and the foundation is undoubtedly the representative of state-owned assets.For such a long time in the past, both the government and Yang Rong have carefully avoided talking about the nature of the foundation's assets, but it is like the cornerstone of a building, lurking there silently, and once shaken, the sky will collapse. In fact, Yang Rong has always been brooding over Brilliance's ownership.There has been a subtle change in his mentality about this.For a long time after listing in the United States, he publicly admitted that Brilliance was a state-owned asset. In 1992, he was received by the leaders of the central government on an occasion. The central leaders asked him: "Your stock is listed on the market, who owns the money you make?" Yang Rong blurted out: "It all belongs to the state!" With the continuous expansion of the enterprise, Yang Rong's statement has gradually changed. In October 2001, at a high-level meeting, he suddenly mentioned that "Brilliance's family background is not good." It may not be necessary to clarify the rights..." Among all the "clearly clarified", the most disturbing thing for him should be the ownership of Brilliance's property rights.In a subsequent interview with reporters, he clearly stated: "The company cannot have such an ambiguous ownership structure for a long time. Historical issues must be settled and the foundation for the company's future competitiveness must be laid. And this group of management followed me. In 10 years, I should have an account for them, I think about the shareholders every day, why can't I think about my managers and my team leader?"

When making this speech, Yang Rong actually had his own overall conception of the "finishing" of property rights.In the first step, he designed and constructed a "labyrinth of capital". The assets of more than 100 enterprises in the "Brilliance Department" are intricately intertwined and interrelated, and the complexity is astonishing. He is probably the only person in the world who really understands it.The second step is to lay the groundwork for the Ningbo project.He exchanged multiple shares of Junan Investment, Zhuhai Brilliance, Zhengtong Holdings, Zhengyun Industry and Shenyang Jinbei under Brilliance Group. Finally, he registered and established a China Zhengtong Holdings Company in Ningbo with him as the legal representative. It will become the Chinese parent company of the joint venture between Brilliance and Rover.At the same time, he established an employee stockholding company within Brilliance Group, which was initiated by more than 3,000 employees, and China Zhengtong Investment Company and the latter conducted a certain form of equity exchange.In this way, a "New Brilliance" with clear property rights was born.In the future, if Shenyang Jinbei is too big to lose, he can completely abandon it and reborn in the Ningbo Rover project.In the third step, he started negotiating with the government on foundation issues.He believes that the foundation is just a "shell" designed for listing. The state-owned investment in the year was only 100,000 yuan, and the state has never invested a penny since then.Therefore, the proportion of state-owned assets in Brilliance cannot exceed 30%.

Yang Rong believes that he has accurate calculations, he can advance forward, and retreat backward, and there is no one to miss. No one can take the "golden cup" away from him.The only thing he didn't figure out was, what if the other party would rather smash the "Gold Cup" than give it to him?In the eyes of some local officials, Yang Rong's departure was a matter of embarrassment for them.Even if Brilliance really grows into a towering tree, if it grows in someone else's yard, what does it have to do with me?What's more, the saplings were dug from my yard back then.They believe that Brilliance is a state-owned asset, which is a solid fact.According to relevant officials citing the relevant regulations formulated by the State-owned Assets Supervision and Administration Commission of the State Council: "All investments in the name of the state and all assets derived from investments are state-owned assets." The Brilliance Assets Receiving Working Group led by Yang Rong negotiated with Yang Rong, and the receiving working group agreed to give Yang Rong a 30% stake in the team.Later, the team leader told the media: "Yang Rong is too anxious and has too much appetite."