Chapter 48 Figures in corporate history: the fate of the overlord

When Ni Runfeng was in power, Changhong was once extremely dazzling. At its peak in 1998, its sales accounted for 15% of the GDP of Sichuan Province, the most populous province in China at that time. The rise and fall of the first factory was directly related to the economy of Bashu.In China's home appliance industry, Ni Runfeng looks down on the world, is famous for his tough style, and has always been known as the "overlord".Every time home appliance tycoons gather, Changhong is besieged and bombarded because of bloody low-price competition. After implementing the strategy of hoarding color tubes, he has become a "public enemy" hated by everyone in the industry. It's like Mount Tai can't collapse.However, such a heroic strongman is as weak as a reed when it comes to system change.

Around 1999, South China color TV companies such as TCL, Skyworth, and Konka came to Changhong to recruit people. There was a Changhong Hotel at the gate of Changhong headquarters in Mianyang. Higher prices poach.Ni Runfeng was at a loss when he saw this scene. He could not keep the useful people, but he could not drive away the unwanted ones. He once said frankly to the reporter of "China Economic Times": "Changhong is a city in the valley of Sichuan. It is an old-fashioned military enterprise in China, and its personnel relations are intricate and complicated. This is different from enterprises in coastal areas, so even if one person is dismissed, it may involve more than a dozen or even one or two hundred people, which is quite difficult." During his tenure as chairman, Ni Runfeng's annual salary was 200,000 yuan, and he also had 26,000 shares of Changhong shares. Compared with Li Dongsheng's 1.2 billion net worth, these incomes are really insignificant.

Pained by the backwardness of the state-run system, Ni Runfeng made up his mind to carry out property rights reform. In an interview with a Taiwanese reporter, he said without hesitation: "The current policy is very clear, because color TV is a competitive product, and the state-owned shares will be gradually withdrawn in the future. Let Changhong become a private enterprise." According to his conception, the reduction of state-owned shares and the implementation of MBO of management are the only way for Changhong.However, as the largest home appliance company in the central and western regions, with a military background, its "noble" background and outstanding achievements have become the biggest obstacle to Changhong's transformation. Various property rights reform plans seem to be unsuitable for Changhong. During the debate, Ni Runfeng admitted several times that "the local government in Mianyang cares too much about enterprises, and some things that the government should not care about." He even proposed the idea of ​​"moving the capital" and wanted to move Changhong's headquarters out of Mianyang, or even out of Mianyang. Sichuan Province.Gradually, he became an alternative in the eyes of major state-owned shareholders.

From 1996 to 1998, Changhong Group ranked first among the top 100 electronic companies in China for three consecutive years; in 1999, it lost its crown; in 2000, it fell to the fifth place.It was also in this year that Ni Runfeng failed in the color tube hoarding war brazenly launched, and he was forced to announce his resignation.However, what is very dramatic is that after only 8 months, the 57-year-old Ni Runfeng actually returned to the furnace and became the chairman of the board again.At that time, many media believed that this unusual restoration meant that Ni Runfeng's restructuring plan had been approved by the government, and Changhong's privatization was not far away.After Ni Runfeng came back, he immediately put forward the goal of "clear property rights, clear rights and responsibilities, separation of government and enterprises, and scientific management", and divided Changhong Group into two from the property rights. Among them, Sichuan Changhong Electronics Group Co., Ltd. is a listed company Sichuan Changhong Electric Co., Ltd. The company's parent company and largest shareholder holds 53.62% of the shares and has an absolute controlling stake.Both companies are independent legal persons, the group does not interfere with the daily operation of the joint-stock company, and the two companies share the Changhong brand.Separating the functions of the group from the listed company is the first step for all large state-owned enterprises to carry out property rights reform. The next step should be to reform the equity of the listed company. Difficult to enter.The financial turmoil that followed turned Changhong's restructuring into a conspiracy in the fog.

After Ni Runfeng came back, he began to enter the overseas market. The partner was a Chinese company named APEX in the United States. The founder was Ji Longfen. He was from Jintan County, Changzhou City, Jiangsu Province. In 2010, he sold recycled scrap metal from the United States to mainland China, earning a little money. After a little accumulation, he started a company called APEX. APEX's main business is to sell low-cost Chinese DVD players to the US market. In 2001, APEX's DVDs entered Wal-Mart, and in the second year it overtook Sony to become the largest DVD supplier in the US.In 2002, Time magazine of the United States stated that Ji Longfan was one of the 15 most influential businessmen in the world in the next generation. There are two secrets to the rise of APEX: one is the cheapness of Chinese products, and the price is generally only half of that of other brands.The second is that Ji Longfan relies on defaulting on the payment of goods. When doing business with domestic companies, he often asks for a lot of goods at the beginning and pays in time. After gaining trust and increasing the volume of goods, he suddenly refuses to pay. APEX owed 215 million yuan to Hongtu Hi-Tech DVD, 35.62 million yuan to Tianda Tiancai DVD, and 22 million US dollars to China Minmetals.It was such a bad businessman who became a distributor of Changhong color TV exports.Ni Runfeng, who regained power, went to the United States to investigate and set up a cooperation strategy with Ji Longfan.

What happened next is confusing. In 2002, Changhong's color TV exports amounted to US$760 million, of which US$700 million was represented by Jilong fans, making APEX the fifth largest supplier of color TVs in the United States.Changhong announced in a high-profile way that its overseas strategy has achieved major success.The strange thing is that truckloads of color TVs were shipped out but failed to exchange for handfuls of US dollars. Jilong fans always refused to pay or defaulted on the payment under the pretext of quality or failure to receive the goods. In fact, the two parties signed a standardized agreement. For export contracts, APEX must pay within 90 days of receiving the goods.According to reports, Changhong's overseas marketing department discovered business risks and ordered the shipment not to be allowed, but Jilong fans with great powers can always persuade the top management to continue to ship. At the end of 2003, Changhong sent high-level executives to the United States to negotiate with APEX, but Ji Longfan left these people and went back to Mianyang to meet with the high-level executives. As a result, in early 2004, Changhong sent more than 30 million US dollars of goods to Ji Longfan.Almost at the same time, the two managers in charge of the APEX project both left Changhong when the labor contract expired.During this period, Changhong's receivables black hole received widespread attention from the financial media, and various rumors about Ni Runfeng were flying around. On June 29, 2004, the public relations department of Changhong announced, "We have never heard of the news that the chairman is leaving. Just the day before, he signed a strategic cooperation agreement with the global vice president of Microsoft in Chengdu." Only 9 days later , the Sichuan provincial government suddenly announced that Ni Runfeng would be dismissed from all positions in Changhong and hired as an economic consultant to the provincial government. The reason was that "the retirement age has reached 60." At that time, Ni himself was in a meeting in Beijing.Half a year later, Changhong Group admitted in its 2004 annual report that its overseas business lost 3.681 billion yuan, and the myth of Changhong was shattered.

Changhong's financial black hole in overseas business is intriguing.In fact, in the past many years of operation and management, Ni Runfeng has very strict and effective control over funds.So, why did Ni Runfeng, who attaches so much importance to capital flow, lose his style in the APEX business?Among them, the strangeness leaves a lot of room for imagination.Professor Lang Xianping, a financial expert, disclosed in a Changhong case analysis report: "Ni Runfeng visited the United States during his retirement, and signed a cooperation agreement with APEX after his comeback, arranging his daughter to serve as a director of APEX. A senior executive of a broadcasting company, in 2003, APEX acquired 54.06% of the shares of the major shareholder of China Data Broadcasting, a Hong Kong-listed company, with 300 million Hong Kong dollars in cash." Lang Xianping also discovered an abnormal investment operation phenomenon, "Since 2000, Changhong has engaged in A customer financial management account of as high as 1 billion should be accrued for depreciation provision, but Changhong did not accrue short-term investment depreciation provision in accordance with the procedures. Changhong’s explanation for this is that these accounts receivable are all within one year. According to experience, it can be recovered in the second year. According to Changhong's report, we found that he had 99.92% of one-year accounts receivable in 2000, 99.80% in 2001, and 99.76% in 2002. Accounts receivable have never been recovered.” Lang Xianping deduced and determined: “Why did Changhong reserve so many assets that can be accrued? I think there is only one conclusion: Ni Runfeng wanted to wait until the time for MBO to accrue. If the stock price falls and the company’s net assets fall, he can buy it at a low price.” When commenting on the Changhong phenomenon, the famous consultant Zhao Min once analyzed that for a large company controlled by the local government like Changhong, its real The objective fact that strategic decision makers are outside the enterprise determines that their mistakes are inevitable.

In the history of Chinese enterprises, the managers of state-owned enterprises are a very unique group worthy of study. They are trapped in a rigid system and shoulder an almost "impossible task", but they spend their whole lives and wisdom trying to manage the business they manage. Enterprises into the track of marketization.Ni Runfeng, Zhang Ruimin, Liu Chuanzhi, Pan Ning and others are all entrepreneurs who rose through market development. Although their enterprises are state-owned or collectively owned, they are actually very weak or outdated. Overcoming the thorns will eventually become the leader of the moment.However, these new state-owned entrepreneurs all face common troubles, such as system, property rights, decision-making supervision, corporate achievements and personal interests.A small number of foresight and lucky ones escaped from the fence, and most of them became victims and experiments of change.In the Chinese business world, the managers of state-owned enterprises should be the group with the best personal qualities and a strong sense of responsibility. There are many successful people, and it is impossible to sum up a universal law of success. "Household appliance overlord" Ni Runfeng is deeply trapped in this huge "destiny".