Standing at the door of the Production Plant area of Shaolin Bus covering an area of more than 1,000 acres, Feng Xiaofeng looked lonely, "You see, there is no one now, at most, our factory has more than 1,000 employees, and now, all gone." ”
Feng Xiaofeng is an old employee of Henan Shaolin Bus Co., Ltd. (hereinafter referred to as "Shaolin Bus") for more than 20 years, and when he mentions his old owner, he still has unconcealed concerns.
Recently, a message that "Shaolin Bus will be bankrupt and reorganized" has once again pulled the old bus manufacturer back to the public's vision.
On the afternoon of December 15, the first financial reporter noted that the Shaolin Bus Marketing Center located on Kangtai Road in Xingyang City had been requisitioned by the liquidation team as a temporary office location, and creditors went to register creditor information from time to time.
"Young (employees), some of them jumped to the nearby CRRC Industrial Park, but like me, who are more than 50 years old, no one wants to jump jobs, and they can't do anything else, so they can only stay in the factory area to watch the gate." Feng Xiaofeng said that Shaolin Bus also had brilliant, in the best efficiency, he can get a monthly salary of more than 3,000 yuan, but now, although the liquidation team pays him more than 2,000 yuan a month, but of which more than 1,000 yuan, he has to take to pay pension - since the suspension of Shaolin Bus in 2019, it is no longer paying pension insurance for employees. "How did a good factory get to this point?"
What he didn't know was that, in fact, the entire bus industry, including Shaolin Bus, and even the entire upstream and downstream, was experiencing an unstoppable depression.
Photo by Ma Jichao, Shaolin Bus Factory
"Martial Arts Conference"
The predecessor of Shaolin Bus was founded in 1968 in Zhengzhou Xingyang Shuishui Printing Machinery Factory, in 1983, the then director Zhou Wenchang began to enter the bus industry, after that, with the movie "Shaolin Temple" popular all over the country, he named the bus "Shaolin".
Almost at the same time, the predecessor of Yutong Bus, The Zhengzhou Bus Repair Factory of the Henan Provincial Department of Transportation (later renamed Zhengzhou Bus Factory), has also just opened the road of market-oriented production and sales of buses.
At that time, looking at the whole country, Brands such as Yaxing Bus in Yangzhou, Jinling Double-decker Bus in Nanjing, Junma Bus in Shanghai and Peony Automobile in Zhangjiagang, Dafu Bus in Changsha, and Emei Bus in Sichuan also entered the bus market.
The Guangzhou bus factory in the south began its "golden decade" in 1982, and an old employee recalled that until 1992, Guangke was a "sought-after commodity", and even the purchase of Guangzhou buses had to queue up to go through the "back door".
The Beijing Bus in the north once occupied more than 70% of the Beijing bus passenger market.
Further north, Hualong Bus Factory, in its most brilliant period, once had a share of more than 90% of the Shenyang bus market.
Recalling the scene of that year, Lin Yi, a retired executive of Shaolin Bus, recalled that because the entry threshold of the bus industry was not high at that time, but the local protection was serious, various bus brands have emerged across the country, Wudang brand, Emei brand... It simply became a "martial arts conference".
"In fact, in the entire automotive industry, buses are only a very small subdivision, but can you think of it? It was such an industry that sold only 100,000 vehicles a year at that time, and there were nearly 200 bus companies gathered before and after. Lin Yi said that this crazy situation eventually led to the first reshuffle of the entire industry in 1985, and for a time, domestic bus companies mourned everywhere, of which Henan Province alone has shut down nearly twenty automobile factories.
Lin Yi said that at that time, Shaolin buses were also suffering, throughout 1985, they only sold 3 buses, the company faced a disaster, but in the end, they gained a chance to breathe by switching to less-than-truckload shuttles, environmental monitoring vehicles, medical ambulances and 16 high-top tourist buses and other chicken rib products in more segmented fields.
Later, with the bankruptcy and closure of a large number of peers, although it lacked core engine technology at that time, shaolin buses that were often innovative in models turned into industry rookies.
In 1988, the production capacity of Shaolin Bus Factory exceeded 1,000 vehicles, with an output value of 21 million yuan and a tax profit of 1.79 million.
In 1991, Shaolin Bus successively launched a number of light buses, and even began to sell buses abroad, and the annual sales volume further increased to 1116 vehicles, with sales revenue of 52.88 million yuan.
By the mid-1990s, the annual production capacity of Shaolin Buses had reached 3,000. At that time, the annual sales of yutong buses were also only 3458 (1997 data). The production and sales data between the two companies were not much different at that time.
But these two once equal companies eventually went down two very different paths.
Zhou Jian, president of the Henan Provincial Reform and Development Research Institute, which has long been concerned about the development of the two enterprises, found that Yutong Bus, which has obtained continuous financing with the help of the capital market, has begun to increase its investment in scientific and technological research and development, and its annual research and development expenses have mostly remained at 3%-5% of the operating income, while Shaolin Bus has on the one hand put some energy on the "imitation" of the bus, on the other hand, it has begun to accelerate the diversification of enterprises.
As a senior employee of the production department, Feng Xiaofeng also witnessed the peak moment of Shaolin Bus: around 2004, Shaolin Automobile had sold nearly 10,000 buses per year, ranking among the top five in the same industry in terms of production and sales, and even signed a contract with Kazakhstan in 2004 to export 1,000 buses, becoming the largest export order in China's bus industry that year.
But the good days didn't last long, and new trials followed.
"The Last Straw"
With the roar of China's first high-speed rail at a speed of 350 kilometers per hour on August 1, 2008, the long-distance passenger transport industry, which the public relies on, has begun to be replaced by high-speed rail.
The data shows that in 2011, the national commercial passenger car completed road passenger traffic of 32.862 billion people, still showing a year-on-year growth trend, but by 2019, this data has dropped to 13.012 billion people, down 4.8% from the previous year, while the railway passenger data in the same period is rising year by year.
"Who's going to take a coach until the last resort?" At Zhengzhou East Railway Station, a passenger who was waiting for the train told First Finance and Economics that his home was in Nanyang, and when the high-speed rail had not yet been opened a few years ago, he returned to his hometown in Nanyang from Zhengzhou, and he had to take a long-distance bus for six or seven hours to get to the station.
"Affected by multiple factors such as high-speed rail, online car-hailing, and the continuous increase in private car travel, the downward trend of bus sales may be irreversible." Huang Jianhua, the founder of the Henan Used Car Alliance, which has been infiltrated in the automotive industry for nearly 20 years, said that in the future, with the continuous decline in demand for long-distance passenger transportation, the life of bus companies may become more and more difficult.
In order to save the declining company, Zhou Wenchang's son and then general manager of Shaolin Bus Zhou Jumin began to turn his attention to new energy buses, in 2010, Shaolin Bus got the production qualification of new energy vehicles, but the decline in performance is still impossible to contain.
In 2015, in the face of the shrinking market share of Shaolin buses, Zhou Jumin extended his tentacles to the old scooter market without a license or driver's license, with the intention of using this unpopular market to achieve "overtaking in curves" and save Shaolin cars that are sliding downhill roads.
In Lin Yi's eyes, a "cheating incident" that occurred in 2016 became the last straw that crushed the Shaolin bus.
In September 2016, the Ministry of Finance informed the public about the disclosure of local budget and final accounts and the special inspection of subsidy funds for the promotion and application of new energy vehicles, including Five New Energy Automobile Enterprises including Suzhou Jimxi Bus, Golden Dragon United Automobile, Shenzhen Wuzhoulong Automobile, Chery Wanda Guizhou Bus, and Shaolin Bus Company, which were listed as the five typical cases of fraud.
In December of the same year, the Ministry of Industry and Information Technology issued an administrative penalty decision saying that among the new energy vehicles that Shaolin Bus Company declared for the 2015 central financial subsidy fund, 252 vehicles had not been completed by the end of 2015, but in 2015, they applied for a motor vehicle driving license in advance and declared 75.6 million yuan of central financial subsidy funds, which had a serious problem of "fraudulent compensation". The penalty imposed in this regard is to recover the pre-allocated funds of the central financial subsidy obtained by 252 illegally licensed vehicles in 2015, and to impose a fine of 50% of the problem amount in accordance with the relevant regulations. At the same time, the Ministry of Industry and Information Technology also decided to cancel the central financial subsidy qualification of Shaolin Bus from 2016 and remove its problem models from the "Catalogue of Recommended Models for Energy-saving and New Energy Vehicle Demonstration and Promotion Projects".
"At that time, the capital chain of Shaolin Bus was already very tight, and because the traditional fuel-based bus had long been exhausted, the company pinned all its hopes on the new energy bus, but now, it was suddenly disqualified from financial subsidies, and this blow was almost fatal." Lin Yi recalled that the already precarious company, along with the disclosure of fraudulent information, was quickly approached by some creditors, and after that, the company even wanted to maintain normal operations became very difficult, after that, successive lawsuits, as well as a large number of the company's bank accounts were blocked, and finally pushed the company to stop production.
According to the data, since 2017, more than ten financial institutions such as Luoyang Bank, Xingyang Rural Commercial Bank, Pingdingshan Bank, and Bank of Zhengzhou have sued Shaolin Bus Company for debt repayment; dozens of upstream and downstream partners such as Jinhu County Chunchen Bus Door System, Zhangjiagang Fengle Automobile Equipment, Shanghai Dajun Power Control Technology, and Anyang Chase Steel have also come up with supply agreements to join the lawsuit.
Several other bus companies that were also included in the "fraud compensation" case in that year are not optimistic today. In June 2020, the Wuzhong District People's Court of Suzhou City issued a civil ruling stating that it was carrying out bankruptcy liquidation against Suzhou JimXi Bus Manufacturing Co., Ltd. (hereinafter referred to as "Suzhou Jimxi").
Suzhou Jim west was founded in August 2013 and began production in March 2015, but after only one year of operation, it fell into the "cheating" incident in March 2016. In the end, Suzhou Jimsi was punished by forging production certificates, forging transaction contracts, sales data, "fake production", and obtaining subsidies with non-existent products, and the Ministry of Industry and Information Technology imposed a penalty for canceling the production qualification of the whole vehicle, which means that Suzhou Jimsi was forced to completely withdraw from the automobile manufacturing industry. Shortly thereafter, Suzhou Jimsi was sued for arrears of payment to suppliers, and then, in July 2016, the production was completely stopped, and on August 31, 2016, the labor contract relationship with all employees was terminated.
As a company executive, Lin Yi still remembers that in 2016, the company's bus sales gradually shrank, and wages began to be in arrears, in 2018 and 2019, the company announced sales records of only 315 and 150 vehicles - by the end of 2019, the company simply shut down the production line, including Feng Xiaofeng, thousands of workers have also been "holiday" so far.
An unstoppable decline
The shaolin bus has a seal on the door of the office area photo by Ma Jichao
Why did Shaolin Buses decay? Zhou Jian believes that there may be at least five reasons: strategic choice mistakes, lack of core advantages, loss of value orientation, lack of financing channels, and even falling into the strange circle of enterprise joint guarantee and joint loan, and backward corporate governance.
"When the rivals in the same city began to advance into the national, high-end and even internationalization, the strategic main goal of Shaolin Bus continued to lock in the rural market and the low-end urban market, which eventually led to large sales but low-end profits, so that in the later competition, enterprises could only face market encroachment and could only retreat step by step." Zhou Jian said.
At its peak, Shaolin Bus was once a local business card, and now, with the decline of the enterprise, what is ultimately left to the local area is a chicken feather.
However, Lin Yi, Feng Xiaofeng and other Shaolin bus employees believe that if there had not been a "cheating" incident in 2016, Shaolin Bus would not have closed down so quickly.
Is this really the case? In Zhou Jian's view, it seems that it is not the same, "new energy subsidies are policy-oriented, and there is a possibility of adjustment at any time." He said that in fact, shortly after the Shaolin bus "cheating" incident, the state began to reduce the subsidy ratio of new energy vehicles, and since then, in the context of the 40%-70% decline in subsidies in 2017, the subsidy for new energy buses in 2018 has been reduced by 40% again, of which the reduction for plug-in hybrid buses is more than 50%.
These have had a considerable impact on the remaining bus companies, taking Yaxing Bus as an example, the company's net profit attributable to the shareholders of listed companies in 2018 was about 13.0722 million yuan, a year-on-year decline of 69.47%, for the sharp decline in net profit, Yaxing Bus attributed it to the reduction of subsidies. The revenue of Yaxing Bus also fell off a cliff after briefly exceeding 3.3 billion yuan in 2016, and by 2020, the annual revenue of Yaxing Bus has fallen to 1.879 billion yuan. At the same time, an inquiry into the annual report of Yaxing Bus can also find that from 2015 to 2019, even if the proportion of new energy subsidies continues to decline, Yaxing Bus still received up to 2.6 billion yuan of new energy subsidies in five years, while the net profit in the same period was only 150 million.
Even Yutong Bus, which is the leader in the industry, cannot get rid of the impact of the continuous reduction of the proportion of new energy subsidies on the company's performance. Taking 2016 as an example, the annual revenue of Yutong Bus was 35.85 billion yuan, but subsequently, the performance also declined all the way, and by 2020, the annual revenue has dropped to 21.71 billion yuan. The same decline in the company's net profit, in 2016, Yutong Bus's net profit reached the highest peak in the calendar year, 4.044 billion yuan, but then, it showed a cliff-like downward trend, by 2020, Yutong Bus's net profit has fallen to 516 million yuan, Yutong Bus's 2021 semi-annual report data show that as of June 2021, Yutong Bus's net profit has fallen to 145 million yuan again, and this is already one of the few profits in the entire bus industry, other such as Zhongtong Bus Ankai Bus, etc., all showed different degrees of losses, of which Zhongtong Bus lost 149 million yuan in the first half of the year, and Ankai Bus lost 0.65 billion yuan.
Behind the disparity in data, there is a huge hidden worry - once the subsidy ratio continues to be reduced, or even cancelled, where will the entire bus industry go?
The Shaolin Bus is ready to turn around and "leave the table".
On November 16, 2021, the Zhengzhou Intermediate People's Court ruled that "due to the poor management of (Shaolin Bus), the suspension of production and operation, and the improper settlement of employees, involving regional social stability, the Xingyang Municipal People's Government has established a liquidation team." "It was decided to pre-reorganize Shaolin Bus, and designated the Shaolin Bus Liquidation Team as the interim administrator of the pre-reorganization, and the person in charge of the liquidation team was Du Pengyi, member of the Standing Committee of the Xingyang Municipal Party Committee and vice mayor of Xingyang Municipal Development and Reform Commission, Finance Bureau (State-owned Assets Supervision and Administration Bureau) and other units.
(Feng Xiaofeng and Lin Yi are pseudonyms)