Shandong Heavy Industry: Stretches the Backbone of China's Equipment Manufacturing Industry

Shandong Heavy Industries, which shoulders the heavy task of revitalizing Shandong's equipment manufacturing industry, finally borrowed a product display conference after setting up for half a year, allowing its brands to make a collective appearance. On December 7th, Shandong Heavy Industry Group's product exhibition kicked off a high-profile event in Jinan, the provincial capital. Its dazzling array of products covered areas such as powertrains, heavy trucks, construction machinery, and auto parts. It was an industry event. Over.

“The reorganization of Shandong Heavy Industries was established, marking the beginning of a strong rise in Shandong's equipment manufacturing industry. After three to five years, we will enter the 100 billion-dollar Global Heavy Industry Group Club.” Tan Xuguang, chairman and party secretary of Shandong Heavy Industry Group, confidently Say.

(T) "The reorganization of Shandong Heavy Industry was successful"

The financial turmoil that hit more than a year ago has caused many companies to get into trouble, and even some world-renowned companies can't avoid the fate of bankruptcy. However, Shandong Heavy Industry has delivered a beautiful answer sheet in the harsh winter: It is expected that the annual operating income will exceed 60 billion yuan, up 10% year-on-year, and the profit will reach 5 billion yuan, soaring by 40%.

This kind of development performance surprised the industry's insiders: How could the newly formed Shandong Heavy Industry break the trend?

“The reorganization of Shandong Heavy Industries was established. It is the provincial party committee and the provincial government that follow the trend of the current national equipment manufacturing industry structural adjustment, meet the requirements of the province’s automobile industry restructuring and revitalization plan, and is also the Weichai, Shangong, and Mountain. There is an urgent need for the development of the three-party auto companies.” Tan Xuguang said, “From the current situation of corporate operations, we can proudly say that the reorganization of Shandong Heavy Industry was successful.”

Since the beginning of this year, the impact of the financial crisis on the real economy has spread, and Shandong has also played a series of combinatorial fights to cope with the crisis and optimize the economic structure. It has optimized and reorganized resources, promoted superior enterprises to become bigger and stronger, and improved industrial competitiveness. one of them. As we all know, Shandong is a large industrial province, and its industrial added value ranks first in the country in recent years. However, in the equipment manufacturing industry known as the “backbone of industry,” the development of most enterprises still mainly depends on scale expansion, and the capacity for independent innovation is not strong. The technical content is relatively low and the pattern of extensive development of the industry has not been fundamentally changed.

In April, the province issued the “Notice on Adjustment and Revitalization Plan of Shandong Automotive Industry”, proposing to cultivate 8 to 10 large-scale enterprise groups with strong competitiveness, including two companies with operating revenue exceeding 100 billion yuan; June 18 On the same day, Shandong Heavy Industry Group Co., Ltd. established by three state-owned enterprises, Weichai Holding Group Co., Ltd., Shandong Construction Machinery Group Co., Ltd. and Shandong Automotive Industry Group Co., Ltd., was established in Jinan.

"Actually, this is a rare opportunity for development for the three companies including Weichai. This opportunity is not to be missed in the development of a company." Tan Xuguang has been working in the industry for many years and is good at product operations. With the vision of entrepreneurs operating in capital, the reorganization of Shandong Heavy Industry was established.

In fact, Weichai was able to develop from an internal-combustion engine production plant that was on the verge of bankruptcy in the industry ten years ago to become a leader in today's industry, relying on every opportunity for development to firmly seize it, from the reform of state-owned enterprise systems. Listed in Hong Kong, to the acquisition of Hunan Torch, return to the A-share market. “Since 1998, when the company began institutional reforms, the company and I have experienced almost all the problems that have arisen during the reform of state-owned enterprises in the past 11 years. But now think about it, if the reform process is very painful, if we shrink back then, Perhaps, like many state-owned enterprises, Weichai will miss the best time for reform.” Tan Xuguang was filled with emotion when he was interviewed by reporters.

In today's fiercely competitive global market, the industry is reshuffled, and each company cannot develop its own business. The fate of mergers and acquisitions and mergers and acquisitions may come at any time. In particular, some international industry giants have already extended the giants of mergers and acquisitions to China. Participation in international competition and cooperation is not a matter of which companies are willing or unwilling, but active and passive issues, and at what level.

“Shandong Heavy Industries has undertaken the historic mission of realizing the strength and expansion of the equipment manufacturing industry in our province. We must establish a global vision and strategic thinking, participate in international competition and cooperation at a higher level, and build a new brand of Shandong equipment manufacturing industry. We are It is very clear.” Tan Xuguang said, “The province has given us so many assets and the target is very high. We must ask Shandong Heavy Industries to achieve a global leader in sales revenue exceeding RMB 100 billion in three to five years. , Equipment manufacturing group with core competitiveness and sustainable development."

At present, each segment of Shandong Heavy Industry is advancing toward this goal and formulating specific development plans: With the engine as the core, the competitiveness of the powertrain system in diversified markets such as vehicles, ships, and power generation equipment will be built; commercial vehicles will be the core The entire vehicle system is based on Shantui's construction bulldozers, excavators and other construction machinery products, achieving diversified leap-forward development, building a global leader in the construction machinery industry, and fully integrating auto parts business to form a rational product distribution within the group. The highly integrated auto parts platform strives to become one of the largest parts and components companies in China.

During the integration

At the beginning of the establishment of Shandong Heavy Industries, this newspaper once pointed out in its report that the key to the success of reorganization lies in "integration." At present, the Group already has more than 100 subordinate enterprises. How to allow various resources to achieve industrial synergy and achieve "1+1>2" is a severe test for Shandong Heavy Industry.

Weichai has undoubtedly played a central role in the restructuring of Shandong Heavy Industry. The goal of the Provincial Party Committee and Provincial Government in establishing Shandong Heavy Industry is to improve the entire industry through the optimization of structures and innovations in the chain, utilizing the advantage of Weichai as a competitive enterprise in terms of brand, technology, capital, and innovation to drive the development of other related companies. Competitiveness, promote industrial upgrading.

Integrating industry resources, Weichai has a wealth of successful experience. Over the past 11 years, Weichai’s economic indicators have doubled in succession and achieved steady growth in profitability. An important means is to achieve reorganization and acquisition of relevant companies through capital operations, and to achieve “double operation of product operations and capital operations”. Wheel drive." After entering the main torch, Weichai reorganized the company such as Shaanxi Heavy Duty Truck, Fast, and Hande Axle to integrate related resources and create the “engine+transmission+axle+vehicle” which is the Chinese heavy truck industry. The “golden industrial chain” has been fully recognized by the market and investors, and the stock price has been steadily rising. This is precisely the effect of industrial synergy.

“Weichai is already a central enterprise that is not a central enterprise, and the assets it operates span seven provinces including Shandong, Shanghai, Shaanxi, Chongqing, Heilongjiang, Hunan, etc. As a large enterprise group emerging from Weifang, Weichai Power can successfully The capital bond and the realization of cross-regional and inter-provincial reorganization of state-owned holdings, the successful experience among them should be worth learning. I think this is also an important reason to promote Shandong Heavy Industry to build Weichai as the core.” Tan Xuguang believes that Weichai Power At present, the advantage of this state-controlled, cross-regional and inter-provincial business model, which is capital-linked, lies in the formation of a game of checks and balances between the various stakeholders and their respective roles.

For the restructuring of state-owned enterprises, the recognition of administrative power is indispensable. There have been concerns in the past that the cross-administrative-regional restructuring with capital as a link is facing management pressures that cannot be resolved by market forces. However, Wei Chai has done quite successfully. On October 29th, at the Weichai Power (Xi'an) Science and Technology Innovation Conference, relevant government leaders in Shaanxi Province clarified their support for this reorganization management model: “Shanxi Zhongqi has grown at a rate of nearly 30% per year in recent years. It is proved that Weichai Power's reorganization of SAIC and FASC is successful,” he said. “As one of the shareholders of Shaanxi Zhongqi, I am speaking here today on behalf of the Shaanxi Provincial Government. We will fully support Weichai Power. It is said that finding Weichai Power is a blessing for our two Shaanxi enterprises."

To a certain extent, the reorganization structure of Shandong Heavy Industry is also referring to Weichai’s capital-linked management model. Shandong Heavy Industry shall become the “five centers” of the group, namely strategic planning center, capital operation center, investment decision center, human resources center and technology research and development center, and implement unified within the group in terms of planning, investment, finance, personnel, and research and development. Management, give play to the advantages of the Group and strengthen the Group's management and control.

The newly appointed general manager of Shandong Heavy Industries, Jiang Kui, once served as vice president of Shantui and Weichai. According to him, in response to changes in business content and management methods, the Group is proceeding with the establishment of organizational structures and business processes, researching and implementing the organic integration of the Group's industrial plate resources, including unified procurement and sharing of a communication protocol platform. Supporting collaboration between. At present, the Group is dispatching several large projects. The expansion of construction machinery and the development of commercial vehicles are all accelerating.

As one of the directions for resource integration, it concentrates on the Group’s advantages in R&D resources and develops new products such as green power and hybrid vehicles. Jiang Kui believes that the impact of the country's energy-saving and emission-reduction policies on the industry will be far-reaching and must be prepared in advance. The reason why Weichai has continued to grow for many years is because the product structure has been adjusted early and adjusted quickly. It is very important to unify R&D directions in a large industrial chain so that they can avoid their own battles and ineffective inputs. In the aspect of manufacturing, structural adjustments must be made to gradually transfer some of the high-energy-consuming components.

In terms of improving the market layout, Shandong Heavy Industry also has new actions. On November 24th, Weichai Holding Group signed a strategic cooperation agreement with the Yangzhou City Government to accelerate the construction of the Weichai Group's Yangzhou Auto Parts and Ships Power Manufacturing Manufacturing Base by integrating the advantageous resources of all parties and reach the scale of 10 billion industry as soon as possible. Realize the rapid expansion of the Group in the Yangtze River Delta region. This was seen as the full implementation of the strategy for the Yangtze River Delta business segment after Weichai followed the Bohai Business Segment, the Western Business Segment and the Southwest Business Segment.

Human resources are also integrated. New groups need new management groups. After Weichai Power reorganized the Hunan Torch, the company's management team successively injected new members from the acquired Shaanxi and Shanghai, and also introduced a large number of members from the United States, Hong Kong, and Europe. Now that Shandong Heavy Industries has been established, personnel adjustments and exchanges within the group are inevitable. Tan Xuguang said at a group meeting: “The establishment of Shandong Heavy Industry has opened up channels for cadre exchanges. In the future, Weifang’s ministers may become Jinan’s ministers. Shantui’s cadres may also come to Weichai to exchange ideas. This is normal. Form institutionalization."

When the reporter was interviewing in Weifang, the group was conducting a large-scale middle-level and part-batch training. During the one-month closed study period, all the famous experts from Peking University and Tsinghua University were invited to use the MBA course. A middle-level cadre who just attended the training said: "This kind of brainwashing training really benefits a lot."

The advantages are emerging

Although only six months after its establishment, Shandong Heavy Industry Group is a “stars” and has many industry-leading brands and industry firsts. Tan Xuguang pinched his fingers one by one to reporters: Weichai Power, the world's first high-speed high-power engine; Shantui bulldozer, China's first, the world's third; Fast, the world's first heavy-duty transmission; Hande, heavy Axle China's No. 1 brand; Torch, spark plug China No. 1 and No. 3 in the world; Shaanxi Zhongqi, No. 4 heavy truck nationwide. This kind of non-replicable brand advantage is crucial to protecting the company's future market competition.

What is even more rare is that this is not a simple accumulation of brands but an organic combination of common industry foundations and the same value chain.

Just last month, a total investment of 1.5 billion in the country's commercial vehicle powertrain assembly engineering technology research center, approved by the Ministry of Science and Technology, settled in Shandong Heavy Industry's Weichai power. As the only powertrain engineering and technology center in the domestic industry, its significance to Shandong Heavy Industry is self-evident.

Judging from the development trend of the world's heavy truck industry, the commanding heights of future products lie in system matching and new energy technologies, namely taking the whole vehicle and the whole machine as the leading forces, and the power always becomes the core, coordinating the development and promotion of new energy technologies, and realizing the sustainable development of the company. . The advantages of synergy are reflected in the unified sharing of technologies, shortened research and development time, and mass production of key components, thereby greatly reducing new product costs and increasing market competitiveness. Weichai currently has a unique powertrain product consisting of “engine+transmission+axle” that can be used to systematically apply new energy technologies to all aspects of the industrial chain from heavy trucks to construction machinery. In order to build up their own core competitiveness.

In the integration of marketing network, brand and market resources, Shandong Heavy Industry has also tasted the sweetness. The cooperation between Weichai Power and Shaanxi Auto in marketing and after-sales service has been fully recognized by users and the marketing and management expenses have been greatly reduced. In the next step, Shandong Heavy Industry will start from the international network and realize the cooperation of Weichai Power, Shantui, Shaanxi Auto, and Fast and achieve integration.

The growth of the Group’s scale and strength has also created conditions for the development of post-market operations. The formation of financial companies, financial leasing companies, and the development of collaborative services and remanufacturing businesses are the future core business contents of Shandong Heavy Industry Group. According to Tan Xuguang, the international market can contribute 25-30% of the revenue, which is an important profit growth point for the Group in the future.

Compared with the domestic same-industry group, Shandong Heavy Industry has the most complete industrial structure and has the potential to grow into the most powerful heavy industry group in China. Even compared with the global equipment manufacturing group, Shandong Heavy Industry's business structure is relatively comprehensive, in line with the trend of international industrial development, and has the potential to grow into a world-class heavy industry group.

At this product exhibition, people saw a boat engine product from Baudouin in France. At the beginning of this year, Weichai successfully acquired the French Baudouin Company. This product, which has more than 100 years of brand history, fills a gap in Weichai's high-end engine production and development technology of 16 liters or more, and will enable the company's products to be more serialized. This is also seen as a small step towards the internationalization of the group.

However, Tan Xuguang has a clear understanding of "going out". He said that the current international financial crisis has clearly provided a good opportunity for emerging market countries, especially Chinese car companies, to enter overseas and seek further development and growth. However, while seeing opportunities, we should also see risks. A good company is by no means a business that is driven by instant impulses. If it does not see its own shortcomings, it will sooner or later have problems. We also lack the talents and teams that run international companies. This is our weakness.

However, this short board is being supplemented. In November, Jiang Kui took the team to recruit talents in the United States, injecting fresh blood for internationalization into Shandong Heavy Industry Group. Of the 47 senior talents, there are many experts and doctors who have worked in top 500 companies. One of the reasons why they are applying for a job is to value the unique industrial chain value advantages embodied in the brand of Shandong Heavy Industry.