2003: Starting with Foreign Trade

Chapter 902 "Boss Tan's Opportunity Has Arrived!"

Setting off for the capital late at night was obviously impossible; Tan Jincheng said this mainly because he didn't want to delay the trip.

Weilai Group is expanding all over the world. For Zhengzhou, who has ambitions in the manufacturing industry, it is usually difficult to catch Tan Jincheng. Today's launch of Xiaopeng Motors is a rare opportunity.

As a province with abundant human resources, Zhengzhou in Henan Province is actually very suitable for building factories. Many migrant workers from surrounding cities will flock here, and coupled with the relatively low local wages, the advantages are very obvious.

The group does not rule out building a factory here in the future, but at present, Tan Jincheng still plans to rely on the Yangtze River to build his industrial empire.

He Xiaopeng understood Tan Jincheng's meaning. Wei Lai's rapid expansion over the past two years has made him a hot commodity in various places. If there is a chance to catch him, no one would want to let it go. It is normal for Zhengzhou to have this idea.

"Understood. In that case, let's wrap things up for today. You can all go back and rest. By the way, the scale of this round of financing will be over 20 billion yuan. The personal portions for President Lei and President Tan may be further diluted."

"No problem, we understand."

With each round of financing, an individual's influence diminishes, and funding and resources become paramount. The first major event after officially taking over Xiaopeng was the launch of a new car, followed by large-scale financing.

It seems that He Xiaopeng, who has transformed into a "Transformer," is prepared to go all in.

Xiaopeng Motors is currently valued at around 200 billion yuan, which means that He Xiaopeng plans to raise 10% of the shares this time, and the valuation will increase accordingly after the financing.

Tan Jincheng's shareholding in Xiaopeng Motors remains at 10%, but this 10% has changed from personal ownership to an investment method involving himself and Weilai Group, with Weilai Motors holding 6% and him personally holding 4%.

Lei Jun's investment style is similar to Tan Jincheng's, with the company and the individual each contributing 60% and 40% respectively.

Li Bing holds fewer shares; in subsequent rounds, he only invested in some shares in his personal capacity. Currently, he holds 1.75% of the shares, which is quite a significant amount and puts him among the top ten shareholders of Wenjie.

After saying goodbye to He Xiaopeng and Lei Jun.

The next morning, to avoid being stopped, Tan Jincheng and his group set off early. Their trip to the capital was naturally to handle the follow-up matters before Orange Group's listing. With the specific listing date already set, there was virtually no possibility that Orange Group would not be able to go public.

However, Tan Jincheng cannot relax. Back in the day, Ant Group, sponsored by Jack Ma, was abruptly halted just days before its IPO. Anything can happen.

Tan Jincheng's first stop was not the capital city, but Baoding in Hebei Province.

Having gotten up too early, Tan Jincheng and Zhao Xinyi were both feeling drowsy on the way. Driver Li Yaohui's eyes lit up.

"By the way, boss, this is a secondary listing, will you be giving out bonuses to Orange's employees?"

For the nearly six-hour drive, Tan Jincheng and his two companions chose to drive themselves. This time, they drove the Weilai L1, and the long journey also allowed them to test the driving experience of the L1. Any product needs a good experience to be successful.

Since its launch six months ago, the Weilai L1 has been quite popular in China, and has been able to maintain stable monthly sales of around 3000 units. However, its performance in the European market has not been as good as Tan Jincheng had expected.

There is considerable debate in European countries about what form of subsidy should be given to a range-extended electric vehicle, and the same is true in China. Currently, it is being subsidized as a plug-in hybrid vehicle, with relatively smaller subsidies, but it is still very popular with consumers.

Moreover, this model is especially popular in Beijing and Shanghai. With features like a refrigerator, color TV, comfortable sofa, and the elimination of range anxiety, it sells exceptionally well, especially with the support of new energy vehicle policies.

Taking Shanghai as an example, new energy vehicle license plates are free to obtain, while ordinary fuel vehicle license plates require a lottery system, making the cost quite high. The same applies to Beijing.

Almost all megacities have similar experiences: buying a car is not difficult, but getting a license plate is extremely difficult. New energy vehicles are one of the best options.

Currently, the best-selling provinces for new energy vehicles across the country are Hainan, Guangdong, Zhejiang, and Jiangsu, as well as megacities like Shanghai and Beijing. Policies coupled with the widespread deployment of charging infrastructure have led to the rapid promotion of new energy vehicles.

"We still need to send them. This year is a different year for Orange. By the way, Xiao Zhao, how many employees does Orange Group have right now?"

This year marks the 11th anniversary of Orange Group's founding. Having completed its restructuring and transformation into an artificial intelligence company, and with its secondary listing on November 1st, coupled with the two major promotional events of Singles' Day and Double Twelve at the end of the year, this year is destined to be different for Orange Group.

"After the restructuring, the number will be around 20,000."

Only Zhao Xinyi could accurately report the number of employees in the Orange Group. She reports on the changes in the number of employees in each company every quarter. It can be said that she knows better than Boss Tan how many employees are managed in total.

After reporting the number of employees, Zhao Xinyi asked curiously, "Boss, how much are you planning to pay?"

Every time Tan Jincheng distributes red envelopes, he pays out of his own pocket, which really leaves other entrepreneurs speechless. It's one thing if it happens once or twice, but when SF Express went public, Wang Wei gave red envelopes to 40 employees, which was very generous.

However, some stingy bosses scoff at the behavior of Tan Jincheng and Wang Wei.

Tan Jincheng thought for a moment and said, "This time it's the tenth anniversary, so the situation is different. Let's pay according to seniority. The minimum is 1000 yuan, and the maximum is 10,000 yuan. Let Chengzi do the statistics. Those who have worked for ten years can get a commemorative medal or something. I will reimburse the money."

What material is the commemorative medal made of?

"Of course it should be made of gold. Show me the design when it's ready. If there's not enough time, you can give out commemorative medals at the year-end party."

The internet industry has a high turnover rate. Although the first batch of employees all had shares, ten years have passed now. These employees are not necessarily financially independent, but they are certainly not short of money. Tan Jincheng is really not sure how many of them will stay.

Moreover, Tan Jincheng's companies have a rule that they do not use outsourced personnel; all employees sign contracts directly with the group company or its subsidiaries.

In the internet industry, where outsourcing is rampant, Tan Jincheng's way of managing employees is simply bizarre. In addition, Orange, located in a remote corner, offers good benefits, so many employees who make money start their own businesses midway through their careers.

For example, He Jia, a former employee of Orange Technology, founded Orange Live through internal incubation and left Orange Technology.

At the beginning of the year, Lu Qi, who served as the chairman of the Orange Group’s compensation committee, gave Tan Jincheng a budget for compensation and benefits expenses in 2017.

The $4 million figure is approximately 27 billion RMB. This figure does not include project bonuses, which are audited and approved by each project team.

Based on 20,000 employees, the average cost per employee is 135,000 yuan per year.

According to salary reports on the internet industry released by platforms such as Zhaopin.com, the average annual salary in first-tier cities for the internet industry in 2017 was around 15 to 25 RMB.

Leading companies like Ali and Tencent will charge higher prices, while in second-tier cities the price is roughly between 12 and 20 yuan.

Ningbo is a second-tier city. Before the restructuring, Orange Technology's salary level, along with other talent benefits such as housing subsidies and tax incentives, made it quite competitive.

However, if the restructured Orange Group continues to operate under this standard, it will have little advantage. In the current boom of artificial intelligence, the salaries of AI and cloud computing engineers, such as algorithm engineers, have been significantly increased.

"Next year, we need to increase the salary budget, otherwise we won't have much of a competitive advantage."

Orange has many ways to attract talent. The first is that it does not outsource, which is very attractive to ordinary programmers. Outsourcing is inherently considered inferior. In the Internet industry, there are countless cases where the work is done but the outsourcing is blamed when something goes wrong.

The second point is Tan Jincheng's enormous influence in Beicang. Orange has its own talent apartments, as well as cooperative benefits from the collaboration between the two large enterprises, Flash and Weilai.

For example, Orange employees or their families can enjoy certain discounts when purchasing cars at Orange's self-operated 4S stores throughout the country, and they can also enjoy discounts when renting or purchasing residential buildings built by Orange in various places to solve employee accommodation needs.

The same applies to the Flash Group; they offer discounts on electric vehicles and clothing at outlet malls.

This strong physical business support has attracted a lot of talent to Orange. In addition, Tan Jincheng has also tried his best to secure some benefits for Orange's employees from some strategic partners in the three major groups.

Discounts are available when purchasing Xiaomi and Meizu phones, as well as small appliances at Midea's self-operated stores. These hidden benefits are quite attractive.

In addition to junior programmers (with one to three years of work experience), Tan Jincheng collaborates with schools around Ningbo to supply talent through partnerships with universities, which is much less costly.

The recent college graduates also highly regard Tan Jincheng's companies. Working for any of the three listed companies is a good stepping stone, and after a few years, they will be more sought after when they change jobs.

Another point is that the Ningbo municipal government, or rather the Zhejiang provincial government, is also very generous in attracting talent. In addition, with money to spare, various regions have many preferential policies for talent.

However, these were all previous ways of attracting talent. After 2018, when the economy was slowing down and everyone was reluctant to spend money, cash in hand is far more practical than consumer benefits. Orange must offer more attractive compensation packages to retain talent.

If you can't afford to spend real money and aren't located in a first-tier core city, retaining talent is naturally extremely difficult.

Mr. Tan, the big boss who went to Beijing to promote the listing of Orange Group, changed his route to Baoding, Hebei Province this time. On the surface, he was visiting Great Wall Motors, but in reality, he was there to poach people.

The automotive industry saw significant activity in 2017, but if we're talking about which company acted most aggressively, Great Wall Motors certainly deserves a mention. Having lagged far behind competitors like Woolly, BYD, Geely, and Chery in the new energy vehicle sector, Great Wall Motors went on a rampage in 2017 under the pressure of the dual-credit policy, especially with its marketing expenses increasing exponentially.

Mr. Wei created a new energy brand with the same surname as him. To promote this brand, Great Wall Motors went on a spending spree of advertising. Meanwhile, in the SUV market, Great Wall Motors, which was suppressed by the Yuechi series, also engaged in aggressive promotions.

In the first three quarters, Great Wall's revenue did not change much, but its net profit plummeted by more than 50%.

With marketing costs rising exponentially and the pressure to maintain sales volume, Great Wall Motors has been running a car-buying lucky draw promotion throughout the year.

This campaign is not targeting a specific model or series of vehicles, but rather all of Great Wall Motors' models. Over the past three quarters, Great Wall Motors' net profit has plummeted from over 10,000 yuan last year to around 5000 yuan.

The structural transformation, heavy spending on advertising, and rapid decline in profits have led to a fiscal deficit. Salary levels are rising, but under multiple pressures, it is certainly impossible to satisfy employees.

This was already evident at Great Wall's 2016 annual employee summary and commendation meeting. At that time, Mr. Wei stated that there were huge problems with the company's human resource management, resulting in a high turnover rate and low employee satisfaction. This was the biggest problem that Great Wall needed to solve at the moment.

On the external front, there is the collective entry of new internet companies into the car manufacturing industry. These companies, which have been criticized for being "PPT car manufacturers" and unable to even produce a car, have not yet played a significant role in promoting the industry's development.

But from the perspective of ordinary employees, their appearance is really good. These internet and investment institutions know nothing but money.

Poaching talent is done at any cost, and even companies like Lianwei Group, which originally had a huge salary advantage in the industry, are under immense pressure, not to mention traditional car companies like Great Wall Motors.

The lack of attractive compensation led to frequent job-hopping among the company's employees, especially technical staff. By the end of 2016, Great Wall's technical staff had decreased by more than 6,000 compared to 2015, with 30% of the technical staff leaving Great Wall.

Great Wall Motors had good sales in 2017, with changes mainly affecting ordinary employees and few senior executives. However, when new energy vehicle startups began poaching senior executives in 2017, Great Wall Motors began to struggle.

Just after New Year's Day this year, Great Wall Motors announced that its sales target for 2017 was 125 million vehicles. With ten months of the year almost over, judging from the current results, it has only achieved less than 80% of the set target, which is obviously very difficult to achieve.

Another example is Wey, which aspires to be a high-end new energy brand. Despite investing heavily, its promotion efforts have not reached the expected level. The VV series has generated a lot of hype but little actual sales, failing to meet Great Wall Motors' expectations.

Currently, in the domestic high-end electric vehicle market, Chinese consumers only recognize Tesla and WILRE. In the high-end SUV segment, WILRE's ES6 and ES8, as well as the newly launched L1 range-extended electric vehicle, are almost unbeatable.

Weipai, which has been registered for a year, has the idea of ​​opening up the high-end brand market, which is not wrong. However, at present, it is somewhat unfortunate to be born at the wrong time. The Weilai ES series is better than Weipai in terms of design, price and intelligence.

The main problem is that this brand name is the same as that of Xiaopeng Motors, which is the subject of much criticism.

It undoubtedly takes a lot of courage for the founder to use their own surname or given name as the brand name, but whether it can be accepted by consumers remains to be seen in the long run. In traditional culture, this is indeed a bit difficult for consumers to accept at first.

Due to various reasons encountered by Great Wall Motors during its transformation this year, on the 24th of last month, Mr. Wei and Ms. Wang Fengying announced that they would impose self-imposed penalties of 300 million yuan and 200 million yuan of their annual salaries, respectively.

Tan Jincheng was speechless at this.

If you don't give others shares, they're just employees earning a salary. If the company encounters various problems during its operation and fails to meet its KPIs, she, as the person in charge, does indeed bear some responsibility.

But to start by making someone pay a fine of 200 million yuan is just plain disgusting.

According to Great Wall's financial report, Wang Fengying's salary this year was 551.41 million yuan. The 200 million yuan self-penalty reduced her salary by 36%. Penalizing her for more than four months' salary without giving her shares is rather inhumane.

It's not wrong to put on a show, but a small, token punishment will suffice.

However, this was a great opportunity for Tan Jincheng.

The performance of the Weilai L1 made Tan Jincheng feel that the three-year agreement with Wang Fengying might still have a chance to beat Great Wall in terms of total sales. The Yuechi series will remain Weilai's main model.

While the total sales of the Yuechi A1 have declined somewhat compared to last year, the sales volume of 6.3 units in September, representing a month-on-month growth rate of 14.75%, proves that this model still maintains its vitality.

In addition, the growth of the new energy vehicle sector has led to a further decline in the sales share of the Yuechi series, which is a very good sign for Weilai.

In the first three quarters, Weilai's new energy vehicles maintained an average growth rate of about 15% compared to last year. If this trend continues, Weilai's overall sales of new energy vehicles this year will be roughly between 10 and 12 vehicles.

The proportion of new energy vehicles in total sales may increase to around 12%, a two-percentage-point increase compared to last year.

Don't underestimate these two points of improvement. Among traditional car companies with sales exceeding 50 units, only WYD can achieve this 10% increase. And only car companies like BYD, which have almost completely stopped their gasoline vehicle business, have new energy vehicles accounting for the majority of their sales.

In an era where gasoline-powered vehicles still dominate, it is remarkable that Weilai has been able to maintain its existing business structure while ensuring steady growth in its newly developed businesses. None of the models it sells are pure volume sellers like those in the A00 segment, such as those from BAIC and Zhidou.

"President Wei, President Wang, it's been a long time."

When President Wei arrived, Lao Wei gave him a grand welcome, personally greeting him. Tan Jincheng showed considerable respect for this senior figure in the automotive industry.

As the most direct competitor in the SUV market, Weilai has never engaged in malicious comparisons in its marketing like its competitors in the mobile phone industry. The phrase "competitors are XX" doesn't apply to them.

As a junior player, Yuechi could have easily used this marketing approach to promote itself when the series was first launched. After all, he was all too familiar with the common practice in the mobile phone industry of directly comparing competing products with those of rival companies at launch events.

These days, phone comparisons are incredibly brutal. A few years later, they might try to downplay competitors' brands and only list specifications or benchmark scores. But that's completely absent now. They start by listing all the "disadvantages" of similar competing products.

Zhao Ming, the head of a sub-brand of Chrysanthemum Factory, almost broke Lei Jun, who is known as the number one marketer in the mobile phone industry, with his marketing methods.

"Welcome, Mr. Tan; come in, please come in."

Mr. Wei, who usually appears quite serious, chuckled and grabbed Tan Jincheng's hand. With his other hand, he patted Tan Jincheng's shoulder and led him into the Great Wall headquarters building.

Tan Jincheng's visit this time was actually at his invitation. Great Wall's setback with the Wei brand led them to decide to create another high-volume brand, which is the legendary ORA.

Unlike the Aion series, which focuses on high sales volume, the ORA, priced around 10 yuan, has a cute appearance and seems to be aimed at the female market. It also seems to be intentionally differentiated from the BYD Qin and Aion series to avoid direct competition.

This was ORA's new product launch event. Boss Wei invited Tan Jincheng for a similar reason as He Xiaopeng: to leverage Tan Jincheng's fame for publicity.

In addition, Lao Wei still admires this younger generation who has been suppressing him. The product and service are excellent, and the marketing is even more overwhelming than the competition. What Lao Wei is most pleased about is that Tan Jincheng has never maliciously targeted Great Wall Motors.

"We old men don't care about competition, nor are we afraid of it, but we do care about our reputation. Mr. Tan, you have never maliciously targeted us in the market. For that alone, I, Old Wei, have nothing to say. Come on, let's have a drink."

It was already noon when we arrived at the Great Wall. We first had a welcome banquet in the canteen, with Lao Wei and Wang Fengying personally accompanying us.

"Haha, you can't say that. I just poached President Wang's husband. President Wei, you're so magnanimous that you didn't hold it against me. I should be the one thanking you."

Old Wei laughed and said, "Sigh, these days even big companies like FAW and SAIC have a hard time retaining employees. What can we do? These internet guys are just too rich. It's really enviable."

This topic made Lao Wei a little embarrassed, but he still maintained his composure. At first, he was indeed a little annoyed when Zhang Li left and Wei came. In those days, personnel turnover was not so frequent, and losing an excellent manufacturing director was a great loss.

However, after so many years, he has long since come to terms with it.

Wang Fengying simply smiled and didn't reply. She understood why Tan Jincheng would bring this up in such a setting; he simply wanted to remind her.

"Speaking of which, among us traditional car companies, only you can compare with them in terms of financial resources. Your Orange has raised another HK$150 billion."

"I'm not being pretentious about that. In terms of financial resources, I'm not afraid of them. However, as you know, our salary structure is well-established and cannot be changed suddenly just because of the poaching by new forces."

Mr. Wei also complained bitterly: "That's right, we've actually made a big adjustment to salaries this year, but it's still very difficult to retain employees."

Wei Lai's salary is adjusted every year, and is generally maintained between 10% and 30%. There will be no intention to disrupt the salary structure. For outstanding employees or those who have made significant contributions, they will only be compensated in terms of bonuses and stock options.

Faced with the unreasonable poaching of talent by emerging internet companies, Weilai is in a slightly better position, but like traditional automakers, it still faces significant pressure.

Li Bing and that old rascal He Xiaopeng, on the surface they cooperated well, but behind the scenes they also poached people from Weilai and even Horizon. Tan Jincheng would call them from time to time to jokingly scold them, and they would just laugh it off.

Tan Jincheng wouldn't complain about this; people always strive for better opportunities.

Since that's the case, let's learn from Durant.

Tan Jincheng glanced at Wang Fengying discreetly, wondering if this iron lady had made up her mind yet.
(End of this chapter)