Termination of fresh graduates, salary cuts of employees, lithium battery leader China Innovation Airlines "brakes"
Author | Zhao Ruoci
Edit | Liu Yang
The graduation season is approaching, and China Innovation Aviation, the third largest power battery company in China, has terminated a batch of graduates of the class of 2023.
"The termination of the notice on May 24 was due to the adjustment of the company's structure, and then 3,000 yuan of liquidated damages. There are still ten days to graduate, and now HR directly deleted my WeChat, and I can't be contacted at all. Fresh graduate Ye Jun said to "Leopard Change".
Two days before receiving the cancellation call, Ye Jun found that the company's signing group of more than 190 people suddenly disbanded. Later, he received a text message from the talent management of China Innovation Airlines, saying that in order to facilitate docking, he asked to add several landline numbers to the whitelist of mobile phones. Recently, Ye Jun joined a QQ group of a dismissed fresh student organization, and there are currently more than 800 people in the group.
On the evening of May 26, China Innovation Airlines sent an email to share the job fair information with the fresh graduates who had terminated their contracts, saying that they were actively coordinating to find multi-party employment resources, and China Innovation Airlines collected the information of the job fairs planned to be held in Hefei, Changzhou and Chengdu from May 27 to June 10 for reference.
China Innovation Aviation sent an email to share the job fair information
A fresh graduate whose contract was terminated said: "The information of the job fair is not very useful, Chengdu and Hefei are too far away, it is not convenient to go, and the Changzhou area has not yet started." A friend who has been to the Chengdu job fair told him that most of them are sales positions.
In addition to meeting fresh graduates, "Leopard Change" learned that some of the employees in various bases of China Innovation Airlines have also been demoted and their salaries reduced on the grounds of "unqualified performance", and the employees who have been reduced are mainly fresh graduates of the class of 2022 who joined last year. Since May 29, some employees whose wages have been reduced have successively applied for labor arbitration at the local human resources and social security bureau.
According to data released by the China Automotive Power Battery Industry Innovation Alliance, in the first four months of this year, China Innovation Aviation ranked third in the installed volume of domestic power battery companies, second only to CATL and BYD. China Innovation Aviation has seven industrial bases in Changzhou, Luoyang, Xiamen, Chengdu, Wuhan, Hefei and Northeast China, and also has a professional independent R&D institution - China Innovation Aviation Research Institute.
China Innovation Airlines was officially listed on the Hong Kong Stock Exchange on October 6 last year, and its market value fell by nearly 50% in less than a month after listing. After the news of the termination of the fresh graduates, the stock price of China Innovation Airlines continued to fall recently.
At the end of 2022, EVE Chairman Liu Jincheng said at an industry conference that it is expected that there will be overcapacity in the entire industry chain by the year after tomorrow at the latest. In April this year, the output and installed capacity of mainland power batteries were 47.0GWh and 25.1GWh, respectively, and the two were 130.0GWh and 65.9GWh in the first quarter, respectively, and the pressure on the industry to deinventory increased sharply.
China Innovation Airlines concentrated on terminating fresh graduates and reducing the salary of some employees, which may be related to the cooling-off period after the power battery industry soared.
However, for the fresh graduates whose contracts were terminated, the incident happened so suddenly, it was obviously impossible for people to face it calmly.
1. Employees who have been terminated or their salaries reduced
"I got an offer in November last year, and I was planning to take a graduation trip before joining the company, but not long after the defense, I received the news of the appointment, and now I can only start reading the recruitment information again." Li Yi got an offer for the position of development engineer of China Innovation Aviation.
When recalling last year's autumn recruitment process, Li Yi said: "After participating in the interview on November 14, I received an offer on the 16th. The process is very simple, there is only one round of interviews, after introducing yourself, it is over after being asked a few questions, and there is no written test and other links. ”
At present, most of the fresh graduates are preparing for defense and graduation-related matters, and the most friendly spring recruitment for graduates has long been over, and most people are at a loss in the face of sudden changes.
"Originally, the situation of looking for a job this year was more grim, but I was very happy to get an offer last year, and I didn't think about looking at other companies. Now the resumes are basically in the sea, and many people around plan to go to graduate school or public examinations. Ye Jun said.
"Leopard Change" learned that the number of fresh graduates terminated by China Innovation Airlines this time is about 1,000, including research and development, equipment, manpower, etc., leaving only a few positions in research institutes.
Wang Xin, a graduate student at a 985 university in the eastern region, also got an offer as a battery design engineer at China Innovation Aviation in November last year, and he is currently on the "survivor" list and has not received a notice of termination. Wang Xin said that he has also received offers from other new energy companies, and chose China Innovation Airlines because of weekends and less overtime. However, because someone in the same position was terminated, he has also been paying attention to this matter.
In addition to the fresh graduates whose contracts were terminated, many employees who joined in 2022 are also full of anxiety about the current situation.
"Our salary was paid on the 19th of the following month, and on the 13th, we received a call from the company saying that we wanted to reduce our salary. However, the company's performance appraisal evaluation standards are a bit far-fetched, and this time there was no advance notice of the performance appraisal. In the end, I was given a 30% pay cut, about 3,000 yuan less a month. An employee of China Innovation Airlines told "Leopard Change".
Downsizing and salary cuts didn't happen overnight. According to Caixin Weekly, China Innovation Airlines' recruitment service center has stopped hiring since February this year, and the door is locked. In a dormitory area at Changzhou's headquarters that seats tens of thousands of people, the number of employees has dwindled from more than 8,000 at its peak to more than 1,000, mainly due to a shortage of orders and some employees who have been transferred to work at the newly built Hefei plant.
"Leopard Change" learned from China Innovation Airlines employees that some colleagues were transferred in mid-March and had just tried to return to Changzhou in April, but in May they were called to sign the salary reduction notice, and the reason for the salary reduction was that the base transferred to support in March gave him a bad grade.
According to insiders, China Innovation Airlines consumed inventory in the first half of the year, the production line was not fully opened, and the front line could not use so many employees.
2. The adjustment period after the carnival
Behind the demotion, salary reduction and a large number of terminations, is the rapid adjustment of business by China Innovation Aviation.
"New energy vehicles are not selling well this year, and manufacturers have to sell their cars before they buy upstream." This situation has also been encountered in the electronics industry such as chips before. If the downstream is not good, it will be doubly bad for the middle and upper streams, because the middle and upper reaches can only receive orders when the downstream sells the goods. Industry observer Liu Yuan said.
The business of China Innovation Aviation is mainly composed of two major segments: power battery and energy storage battery, of which power battery is the core business, accounting for 80% of revenue.
In 2021, the new energy vehicle market is developing rapidly, and power battery shipments have also soared. According to data from the Passenger Association, China's new energy vehicle sales reached 3.521 million units in 2021, a year-on-year increase of 1.6 times. According to data from the Advanced Industry Research Institute (GGII), China's power battery shipments in 2021 were 226GWh, a year-on-year increase of 182.5%.
The popularity continued until last year, and the first annual report of China Innovation Airlines after its listing showed that its revenue in 2022 was 20.3 billion yuan, a year-on-year increase of 198.88%; The net profit was 692 million yuan, a year-on-year increase of 393.9%. China Innovation Airlines said that the growth in performance was mainly due to the gradual release of the company's production capacity last year, the scale effect was significant, and the product sales and gross profit margin increased.
The performance growth is also related to the low price strategy of China Innovation Airlines. According to the prospectus of China Innovation Airlines, from 2019 to 2021, the average selling prices of its power batteries will be 0.87 yuan/Wh, 0.64 yuan/Wh and 0.65 yuan/Wh, respectively, which can be called "low prices" in the industry.
It is precisely with this "low price" that China Innovation Airlines has attracted many large customers. According to data from the Advanced Industry Research Institute, in 2021, China Innovation Aviation provided GAC Passenger Vehicle with an installed capacity of 5.34GWh, with which GAC Passenger Vehicle also became the largest customer of China Innovation Aviation.
According to the prospectus of China Innovation Airlines, GAC AION's revenue contribution to China Innovation Airlines decreased from 51.9% in 2021 to 31% in Q1 2022, and the penetration rate of China Innovation Airlines in the GAC Group also dropped from 65.9% in 2021 to 44.0%.
On the other hand, automobile manufacturers are also trying to get rid of the suppression of the supply chain and vigorously deploy self-research. For example, the magazine battery, the main product of China Innovation Aviation, is a product jointly developed by GAC AION and China Innovation Aviation. In August 2022, GAC reached a strategic cooperation with Ganfeng Lithium to open up the supply of upstream raw materials. Subsequently, in order to develop and produce its own batteries, GAC AION invested another 10.9 billion yuan to establish a battery technology company.
In addition, although the low-price strategy is helpful to open up the market, it has led to the gross profit margin of China Innovation Aviation is not high, which is slightly inferior to other companies in the industry.
3. Under the fierce competition, going to sea is the most preferred?
Nowadays, the entire new energy industry is facing the problem of destocking and optimizing the structure. According to a previous report by "Leopard Change", about 750,000 domestic new energy vehicles will need time to digest in 2022, and the inventory of new energy vehicles will increase by about 260,000 units in the first quarter of 2023. According to the latest data from the China Association of Automobile Manufacturers, in April this year, new energy vehicle sales were 63.3 units, a year-on-year increase of 112.8%, a month-on-month decrease of 2.6%, and the penetration rate of new energy was 29.5%.
"The growth rate has slowed down, on the one hand, because the penetration rate of this industry has been relatively high, and the general penetration rate is the fastest growth of enterprises at 10%-30%, and the growth rate of the industry will come down if it exceeds 30% penetration." Liu Yuan said.
Similarly, after the crazy investment and expansion brought about by the new energy vehicle boom in the previous two years, the problem of oversupply and overcapacity in the power battery industry has become more and more obvious. According to data released by research institute EVTank, the inventory of power batteries in the whole industry chain will reach 164.8GWh in 2022, a record high.
Only four power battery companies participated in the 2021 Shanghai Auto Show, but at the 2023 Auto Show, many power battery companies such as CATL, Hive Energy, China Innovation Aviation, EVE Lithium Energy, and Sunwoda appeared. On the one hand, this shows that driven by new energy vehicles, power battery companies are developing rapidly, on the other hand, it also means that competition is intensifying, and battery manufacturers need to establish closer ties with upstream and downstream.
In addition to continuous improvement in technology, many battery manufacturers have set their sights on overseas markets. According to data released by SNE Research in South Korea, the installed capacity of global power batteries has increased significantly from 59GWh in 2017 to 517.9GWh in 2022, with Chinese manufacturers contributing nearly seventy percent.
For battery manufacturers, whether it is business development or brand influence, going overseas is a huge opportunity. Specific to various domestic manufacturers, CATL, EVE Lithium Energy, Hive Energy, etc. have accelerated their layout overseas.
Although it is necessary for the current power battery industry to squeeze out the bubble and return to rationality, a more specific and reasonable explanation is needed for the fresh graduates and employees who were cut by China Innovation Airlines.
(At the request of interviewees, the characters in the article are pseudonyms)