Under the epidemic, every industry is not easy. As China’s three major high-paying industries of real estate, finance and the Internet, a wave of salary cuts and layoffs has been staged in turn. And the industry’s recognized outlet, new energy vehicles are not spared. According to the automotive supply chain, the Shanghai headquarters of the new energy vehicle company WM has started large-scale layoffs, many stores have been closed, and Hengchi Automobile has notified employees to handle “suspension and retention” from now on.
01 Wilmar: All employees have reduced salaries, and the financial pressure is great
A few days ago, an internal letter from the CEO of WM Motor circulated on the Internet. The content of the letter revealed that WM Motor’s production and operation have been affected, and since October 2022, WM Motor has implemented a series of cost-reduction measures to cope with financial pressure. These measures cover salary cuts, including 50% of the base salary for managers at the M4 level and above; Other employees are paid 70% of the base salary; Payday postponed from 8th to 25th; This year, the 13th salary, year-end bonus, retention bonus, and car purchase subsidy will be suspended, and the salary month will be implemented from October.
In fact, WM Motor has long had a salary cut, and in October, there was news that the senior executives above the vice president of WM Motor took the initiative to cut their salaries by 50%. With the above internal letter, it means that WM Motor’s salary reduction has covered all the company’s personnel, indicating that WM Motor’s financial pressure has been quite significant.
WM Motor’s stock book disclosed that as of the end of March this year, the total amount of cash and cash equivalents owned by the company was only 3.678 billion yuan, and the company urgently needed financing to replenish blood. The IPO of WM Motor’s Hong Kong stock is still in the review stage and is about to expire, and there are no more sources of funds. At the same time, WM Motor is also burdened with huge debts, and the prospectus shows that from 2019 to 2021, WM Motor’s total borrowings will be 2.42 billion yuan, 6.41 billion yuan and 9.95 billion yuan respectively.
For the new forces of car manufacturing, burning money may not be able to burn a successful enough car brand, but no money to burn is enough to destroy a start-up car company.
The only good news may be that WM Motor has not yet reported news about “wage arrears”. You know, although the salary cut is terrible, but for the new forces of car manufacturing “arrears are more terrifying”, turning over the old yellow calendar, almost all bankrupt, bankrupt new forces of car manufacturing have faced problems involving the vital interests of employees such as arrears of wages and arrears of social security before “dying”.
02 Hengchi: Suspension of work, salary arrears
On November 29, Hengchi New Energy Vehicle, a subsidiary of Evergrande, issued a notice of suspension and retention to employees, and since December 1, Hengchi New Energy Vehicle employees have ushered in a “super long holiday” spanning the entire Spring Festival, which lasts for 90 days.
Hengchi New Energy Vehicle announced that the company has serious operating difficulties, and some projects have been suspended and waiting for production, because the position of the notified person has no work for a certain period of time, so it is suspended and left behind. The suspension period is from December 1, 2022 to February 28, 2023, for a period of three months, and will be adjusted and notified according to the work situation. During the period, if you establish labor relations with other units, you must submit a written resignation application at least 3 working days in advance, otherwise it will be regarded as an automatic termination of labor relations with the company.
In addition to the large-scale shutdown, Hengchi also experienced large-scale wage arrears nationwide.
According to people familiar with the matter, Hengchi showrooms in most areas have stopped paying salaries in October and November, and some parts of the south have not paid salaries since September, and employee advance fund reimbursement has also stopped.
It is reported that Hengchi 5 achieved the first car off the production line on December 30, 2021, opened global pre-sale on July 6, and ordered more than 37,000 units in less than 15 days, and officially mass production on September 16, and officially started delivery in October, with the first batch of 100 units delivered. In addition, the delivery of Hengchi 5 will be carried out in two batches. The delivery period of the first 10,000 Hengchi 5 cars will be from October 1 this year to March 31, 2023, and the delivery will be in accordance with the fixed payment order. After 10,000 units, Hengchi 5 will be delivered from April 1, 2023 according to the order of deposit payment.
In fact, since Evergrande Group invested in Jia Yueting’s Faraday Future FF Company in June 2018, this year has been the fourth year of Evergrande Group’s entry into the new energy automobile industry. From investing in new energy vehicle enterprises to building its own factories to produce and sell new energy vehicle products, Evergrande has invested a lot in “car manufacturing” so far.
Data show that in 2022, the cumulative total investment of Evergrande Group in the new energy vehicle industry will be 47.4 billion yuan. From 2018 to 2020, Evergrande Automobile’s total revenue was 3.133 billion yuan, 5.636 billion yuan and 15.487 billion yuan, respectively, with a compound annual growth rate of 70.35%. However, the net profit loss attributable to the parent continued to increase, reaching 1.428 billion yuan, 4.426 billion yuan and 7.394 billion yuan respectively, with a cumulative loss of 13.248 billion yuan in three years.
As we all know, the cake of new energy vehicles is not only a new force in car manufacturing, but also traditional automobile brands have entered the market and are deeply loved by consumers.
As the saying goes: “natural selection, the strong survive”, at this stage, China’s automotive industry is in the integration period of big waves, traditional car companies will have more competitive advantages under the scale effect, and new energy vehicles such as WM and Hengchi cannot get out of the financial predicament, cannot find a stable supply chain, cannot solve the quality control problem, can only wait to be forced out of the circle.
Post time: Dec-05-2022