Changan will increase financial input to Changhe -- Zou Wenchao also announced the development plan for Changhe Automobile, with increased investment in funds, models, salaries, and talent. In 2012-2013, Changhe Automobile will launch eight new models (including facelifts), including three sedans and five mini vehicles. In terms of investment, Hefei Changhe will relocate to a new factory with an annual production capacity of 150,000 units, with a total investment of 1.73 billion yuan, which was completed and put into operation in December 2011. The whole vehicle production capacity of the Jingdezhen base will be expanded from 100,000 units to 160,000 units, with an investment of 150 million yuan. President of Changan Automobile Group, Zou Wenchao, stated that since the restructuring of Changhe, Changan has cleared historical losses amounting to 390 million yuan. In 2011, Changhe Automobile achieved a turnaround, making a profit of 1.18 million yuan. The previous disputes also showed the "strong desire" of employees for the development of Changhe Automobile. China Changan will promote the rapid development of Changhe Automobile according to the "set plan." At the request of the National Development and Reform Commission (NDRC), the qualification of Changhe Suzuki will be canceled.
Regarding the reasons for the strike incident, Zou Wenchao believed it involved "multiple levels," leading to "inconsistent interpretations." Just before the Spring Festival, due to dissatisfaction with Changan's plan to transfer the production qualification of Changhe Suzuki to Changan Mazda, employees in Jingdezhen stopped work and protested for several days. At yesterday's communication meeting, Changan explained that it was not about transferring qualifications but rather to separate Changan Mazda as required by the NDRC, necessitating the cancellation of Changhe Suzuki's qualifications.
Zou Wenchao clarified that the Changhe Automobile system holds two whole vehicle production qualifications. Even after canceling Changhe Suzuki, the Jingdezhen factory and Jiǔjiāng factory can still produce whole vehicles, without affecting current operations or future development, nor impacting the benefits and income of Changhe Automobile employees. "It seems someone used the excuse that China Changan wants to take away Changhe's production qualification to stir up trouble, but it failed!" said an industry insider to Tencent Auto.
"Changhe Suzuki has been losing money for many years, and Japan's Suzuki Company has already proposed to withdraw from Changhe Suzuki. China Changan has approved in principle the withdrawal of Japan's Suzuki from Changhe Suzuki." However, China Changan simultaneously denied that both parties have signed any formal acquisition agreement yet.
It can be seen that on the issue of integrating "the two Suzukis," the positions of Changan and Suzuki are consistent, while Changhe Automobile, the Jingdezhen municipal government, and even the Jiangxi provincial government stand on the other side. The conflicts arising from the intertwining interests of all parties make the originally precarious integration process "like walking on thin ice."
The prospects of Changan's reorganization are not optimistic. After the incident, through negotiations among China Changan, Changhe Automobile, and the Jingdezhen municipal government, on January 17, China Changan jointly issued a notice with the Jingdezhen municipal government, stating that Changhe's production qualification, production base, and brand will remain unchanged, and the joint venture between Changhe and Suzuki will not change, temporarily calming the situation. But later news reported that the high-level leaders of Changhe sent by Changan had resigned or been suspended, and Changhe was operating a plan to "detach from Changan" to resolve long-standing accumulated problems.
Changan's clear statement at the communication meeting seemed to express its determination to "never abandon Changhe" through the media. Zou Wenchao stated that the reorganization process is full of difficulties, but managing and using state-owned assets well is "China Changan's responsibility to the country." There is meaning behind the words: Changan will not stop its ongoing reorganization efforts.
Experts do not have a positive outlook on the current reorganization situation. In recent years, the state has set a new prerequisite for obtaining new production qualifications, which must be based on mergers and acquisitions. This time, the preservation of Changhe Suzuki's qualifications directly led to another deadlock in Changan Mazda's independence. Chairman of China Changan, Xu Liuping, stated that whether Changan Mazda can obtain production qualifications now depends on the decisions of relevant national departments.
According to reports, in 2011, China Changan sold a total of 2.01 million vehicles, ranking fourth in the industry. Although sales did not increase, profits and economic added value grew significantly. In 2012, Changan plans to achieve automobile production and sales of 2.235 million units.
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