2003: Starting with Foreign Trade

Chapter 940 "The Hidden Supplier of the New Force"

The Shanghai Auto Show is in full swing, and Boss Tan is wandering around the exhibition areas of various manufacturers.

Meanwhile, Wang Fengying, who quietly returned to Ningbo after the press conference, has already begun arranging for Tan Jincheng to improve inventory and other aspects of the project.

Although she didn't quite understand, as the person responsible for carrying out the specific tasks, Wang Fengying still worked diligently to implement various reforms to the supply chain system based on her boss's instructions.

Fortunately, since last year, Weilai has been making various reforms in the supply chain. This dual-track system does not seem too abrupt to outsiders, and Weilai's latest reform in the supply chain has attracted a lot of attention.

The first news to emerge was that Weilai had signed backup agreements with several second-tier suppliers, stipulating that in specific circumstances (such as insufficient production capacity of the main supplier, sudden supply disruption, quality problems, etc.), second-tier suppliers could quickly step in to provide alternative supplies.

This covers almost all of Weilai's second-tier suppliers, from large core components such as chips to small, inconspicuous suppliers such as screws and nuts. It is very difficult to keep such a large-scale backup agreement a secret.

"What are you doing? Do you even have that much production capacity?"

On the last day of the auto show, news of Wang Fengying's actions in Ningbo reached Shanghai. Li Shufu, who had caused a huge controversy at the Shanghai auto show, visited Weilai's Shanghai branch out of curiosity.

Wang Fengying still did not accept any interviews, but through her assistant, she conveyed an ambiguous attitude, roughly meaning that based on the excellent performance in overseas markets, Weilai would make some corresponding adjustments in terms of parts supply.

In fact, it was not as simple as signing a supply backup agreement. From the moment Wang Fengying returned, Wei Lai clearly increased the procurement efforts of various suppliers, and the products supplied by his own company were also being propelled at full capacity.

This is reflected in the recruitment of personnel. The spring recruitment, which started in March, was originally proceeding in an orderly manner as usual. However, after Wang Fengying returned, the director of human resources began to personally oversee the spring recruitment.

With the rapid expansion of the industry, especially the rapid development of the battery business, the number of employees of Weilai Group has repeatedly broken records. Today, Weilai has more than 2.5 employees working in the battery business.

The number of employees in the main automotive industry has exceeded 8, and the total number of employees has exceeded 10. Under such circumstances, the company is still recruiting on a large scale, which is really hard to understand.

It's important to understand that Weilai Group is pursuing technological upgrades and intelligent manufacturing, rather than relying on sheer manpower like BYD. Weilai boasts the highest level of automation among all domestic automakers.

Weilai's live broadcast room is constantly showcasing its automation and advanced technology to the people of the whole country.

"What are you talking about? Automation is automation, but we also need to protect employment. Mr. Li, your actions during the auto show were quite meaningful."

Li Shufu was curious about Wei Lai's large-scale recruitment drive. Companies like theirs have a well-defined plan for how many people they lay off and how many they hire each year. In reality, no boss creates a huge number of employees.

If possible, most bosses would love for one person to do the work of two, since employee expenses are a huge burden for a company.

Taking the automotive industry as an example, the typical employee structure of a vehicle manufacturer is roughly as follows: entry-level employees account for 60%, technical personnel account for 25%, and management personnel account for about 15%. This is the template for most companies.

The structure of Weilai's grassroots employees is similar to that of other companies, around 60%. However, there is a difference between technical and management personnel. Weilai has 28% technical personnel and 12% management personnel.

A company without managers is not good, but if there are too many managers who do nothing, that is also not good. It not only wastes resources, but also reduces efficiency. Therefore, no matter which company he works for, Tan Jincheng has always controlled the proportion of managers.

Just look at LeEco; they can thrive even without a boss. If you pay them enough, their employees will naturally work hard.

"You're just talking nonsense. You have over 10 employees in this system alone. Who dares to say you lack social responsibility? Tell me, on what basis?"

According to Weilai's financial report for the previous fiscal year, Weilai had a total of 10.25 employees in 2018, and its labor costs alone (including social security) amounted to RMB 137.7 billion.

Its employees' salaries are 20% to 30% higher than those of its peers. All employees receive social security benefits. There is no outsourcing. This is the kind of advertising that Dong Ge is so proud of. Under Tan Jincheng's leadership, the company has been implementing this policy from the initial few employees to the current tens of thousands of employees.

The local human resources and social security bureaus treated Tan Jincheng with great courtesy. In the beginning, his companies would even promote him, but in recent years, the companies under Wei Lai have stopped bothering with such promotions; it's become commonplace.

Tan Jincheng himself has been recognized as one of the most socially responsible entrepreneurs for many consecutive years. Even if he doesn't hire any new employees in the future, no one will dare to say that Tan Jincheng lacks a sense of social responsibility.

Especially in the internet and technology industries where outsourcing is prevalent, even companies like Huawei inevitably use outsourcing to reduce operating costs, but Orange Group really doesn't have a single outsourced employee.

Of course, the two are not comparable in size. Orange Group has always controlled the number of employees. Currently, Orange Group has fewer employees than Xiaomi, at about 2.

Of these 2-plus people, 51% are technical personnel. For a lucrative internet company, this is entirely affordable; it just means the shareholders will earn a little less.

"Well, actually it's just a consequence of this friction, and some preparations we've made after learning from our experiences and lessons."

After a moment's consideration, Tan Jincheng decided to reveal some information to Li Shufu and the outside world. After all, the transformation of the supply chain was only the first step, and there would be a series of major reforms to follow, such as logistics, factory epidemic prevention automation, and capacity flexibility solutions.

Even cash flow and channel risk mitigation mechanisms need to be addressed. Tan Jincheng has already planned that before the end of the second quarter, Weilai will issue a debt with a maximum financing scale of 50 billion yuan, in order to prepare for the end of the year.

It's impossible for a rectification campaign that lasts almost a year to go unnoticed by the outside world.

He's not some saint. If it were a sudden event like the friction, he would definitely do the same thing as before, secretly stocking up on inventory to gain a competitive advantage. You know, during the 2018 friction, because of his secretive actions, Weilai was one of the few car companies that didn't lack chips.

Not only that, but the cost is also much lower than other companies. After all, automotive chips don't have the same high requirements as mobile phone chips, and under normal circumstances, no manufacturer would think of stockpiling them when they are cheap.

But this time the situation is different. Just like in 2008, he secretly built many high-quality schools in some provinces under the guise of sponsoring poor students. This is a matter of life and death, and he cannot consider it only from the perspective of a business.

Moreover, if he really did that, no one is stupid. They can piece together the whole story by looking at the details of what Wei Lai did beforehand, and he might become a public enemy.

Do you think this will continue?

Speaking of this, Li Shufu also became serious. This year, bilateral relations have eased considerably, the stock market has performed well, and although supply is not as good as before, it is generally considered normal.

Everyone has seen the changes in the environment, but people always have a sense of complacency. The old man's term is already halfway over, and he has also made himself the target of public resentment. Judging from the opinion polls, it is highly unlikely that he will be re-elected.

This is the view shared by Wall Street; in some people's words, it's about time to hold on for two years.

After all, large-scale frictions like this had happened before, so Li Shufu was naturally prepared. However, he did not expect Tan Jincheng's attitude to be so pessimistic. Wei Lai's series of actions would cost a lot of money.

This is not like the casual act of that kid secretly hoarding goods before; the transformation of the entire system will continue indefinitely.

"Pretty much. Actually, if you spend more time online and look at the current social environment, you'll know that the current situation is not something that can be changed by replacing someone else. I think it will be difficult to change at least within the next ten years."

The old man did indeed go down, but he was replaced by an even more sinister and older one.

Of course, the main reason is the economic downturn. When the economy is booming, all contradictions can be mitigated, but they will be amplified during a downturn. This is actually the most crucial reason.

"What you said makes a good point. Is the high administrative efficiency of your Weilai company related to you and the senior executives frequently spending a lot of time online?"

Li Shufu also knows that people like him often get trapped in information cocoons. They know it, but it's hard to change because that's human nature. The only way to change it is to work harder, but some business founders simply don't have the energy.

Tan Jincheng, who was in his thirties, was 22 years younger than him, old enough to have been born. In terms of energy and acceptance of new things, he was far superior to these "old guys".

The general consensus within and outside the industry is that Weilai has the lowest information cocoon among all companies. This is all thanks to their young and ambitious leader. Any senior executive, whether it is Yu Liguo who is about to retire or Wang Fengying who joined recently, has to accept this style.

In Weilai's management trainee system, trainees do not perform any formal work for the first six months after joining Weilai. Instead, they rotate through various departments. After six months of rotation, they are assigned specific work.

During these six months, Tan Jincheng would often use his spare time, such as meals and gym workouts, to communicate with these management trainees. They were all college students who had never worked a day in their lives, and their life experiences were like blank sheets of paper. Asking them anything was easy for them.

It was this high-intensity, fragmented management model that allowed Tan Jincheng to learn a great deal about the various problems within the entire Weilai system, find the right opportunity, and, with the cooperation of the right people, be able to quickly bring about change.

They are not unaware of these things, but it is difficult for them to do them. Tan Jincheng can play King of Glory with management trainees and obtain the information he wants in this relaxing process. Can they do the same?
That simply won't work.

"Actually, our transformation is a series of changes, starting with the supply chain reform that began last year, and many more to come. If you're interested, Mr. Li, you can take a look." "By the way, Mr. Li, won't you tell me about your series of actions at the exhibition? I'm quite curious about that."

Tan Jincheng couldn't say anything more. This man's background was far beyond his own. He believed that what Tan Jincheng said today would reach some people's ears, but he didn't care. He was just taking precautions and using the pretext of addressing friction.

Everything can actually be explained.

"There's really no great purpose behind it. It's just that our attitude towards the new forces wasn't very good before, so we're thinking of repairing things and finding some opportunities for cooperation. As for what happened at the Great Wall booth, it was just something we did on the side."

At this point, Boss Li was somewhat embarrassed, and he also understood that Tan Jincheng did not want to continue the previous topic. If they continued, it would involve the company's secrets. Why should he tell a competitor?

Of course, he also knew that Tan Jincheng had already told him quite a lot today. Tan Jincheng had always had a very high level of market sensitivity, otherwise he would not have been able to develop to such a scale in just over ten years.

What I've said today is enough for him to digest some information, and it has certain reference value for both him personally and Geely's strategy.

"Huh? That's it?"

Tan Jincheng could understand the sarcastic tone of the Great Wall booth. In any case, Wang Fengying's choice to make a public appearance on the media day of the Shanghai Auto Show was more or less a stimulus to Great Wall. It was probably because of this that President Wei did not attend the Shanghai Auto Show.

Boss Li was lucky; his sarcastic remarks were just a casual thing to do. He would have done the same if he were in his shoes.

However, he was somewhat surprised, even disbelieving, that they were seeking cooperation opportunities.

"You little brat, I've already exposed my embarrassing secrets, why don't you believe me?"

Tan Jincheng didn't believe it, but he had no choice.

That said, ever since he first attended the Internet Conference as a business representative a few years ago, Mr. Li has been dismissive of internet-based car manufacturing, making a series of astonishing remarks.

Subsequent farcical events, such as the LeEco CEO absconding and the company's car manufacturing ventures based on PowerPoint presentations, were indeed similar to his initial remarks, which made him increasingly disdainful of emerging electric vehicle brands.

But no one expected that starting in 2018, the new energy vehicle companies seemed to suddenly rise up. The top three companies not only produced cars, but also had a decent number of orders.

Even Wenjie has already gone public. In addition, the Leapmotor S1, which was officially launched on January 3 this year, has only received a moderate market response. Its price of 109,900 to 149,900 yuan after subsidies has only a moderate influence among new energy vehicle companies.

However, this company, founded by security giant Dahua Technology and its founders, received funding from Hangzhou City Industrial Fund and ByteDance at the end of last year, thus attracting much attention.

This is Leapmotor's A-share financing of 25 billion yuan, with Hangzhou City Industrial Fund leading the investment with 15 billion yuan and ByteDance Engine following with 10 billion yuan. This is a rare large-scale investment by ByteDance Engine in the primary market in recent years.

In terms of government investment, the Hangzhou City Industrial Fund is as well-known as the Luzhou City's "Suoha" (a gambling platform), not to mention ByteDance's "JiLiang Engine" (another investment platform). Any major projects they invest in are invariably approved by Tan Jincheng, and these projects have basically become investment models.

Tan Jincheng spent 10 billion yuan but only acquired 5.99% of Leapmotor's shares. He also went to see the cars, which looked very ordinary and were not priced high. However, through his understanding of the booth, he learned that the company was following the same technology-driven approach as WM Motor.

Most importantly, the technology route it takes is similar to that of WILTER, which focuses on full-domain self-development and vertical integration. Its core electric drive technologies are all self-developed based on the WILTER system (Horizon Robotics, Jinshidai, etc.).

Given time, this pragmatic approach will allow Leapmotor to achieve great things. In Tan Jincheng's words, he invested in Leapmotor because he valued its pragmatic approach.

The leading companies among the new energy vehicle startups have been established, while second-tier new energy vehicle brands such as Leapmotor, Enovate, and Hozon have also made some progress. After experiencing a chaotic period, these new energy vehicle brands have gradually gained considerable competitiveness.

Looking back at what he has said over the years, it seems somewhat like he has become complacent and stuck in his ways. His appearance at various new energy vehicle exhibition areas is also to demonstrate Geely's open and cooperative attitude.

"Fine, whatever you say."

Tan Jincheng pursed his lips. He believed that what Lao Li said was true, but it was definitely not all of it, just as he could not reveal all the information.

"To be honest, I fell into a misconception a few years ago. Now, I'm falling behind step by step, unlike you guys."

Whether Tan Jincheng believed it or not didn't matter to him, but he was genuinely envious. This young man, with his extremely keen investment acumen, actively embraced new forces, giving Weilai a very significant influence in the entire new force brand field.

Wenjie, Xiaopeng, Leapmotor and other companies that have reached a certain scale all have close ties with him. From the high-profile Wenjie to the low-profile and pragmatic Xiaopeng and Leapmotor, Wei Lai’s presence can be seen in all these leading companies.

If you want to reduce costs in the replacement of domestic chips, Horizon Robotics is the best choice. If you want to achieve technological leadership in battery supply and battery management, Jinsheng Technology and CATL are the two leading companies that you can't avoid.

In 2019, among the top ten domestic power battery suppliers, besides Jinsheng Technology, he was an important shareholder in several others, including CATL, Guoxuan High-Tech, and EVE Energy.

The ninth-ranked company, SAIC Times, is a joint venture between Jinshidai and SAIC Group. Among the top ten, he alone has an extraordinary influence on four of them.

These emerging brands are basically not very strong and rely more on suppliers to support their development. According to rumors, the reason why ByteDance did not invest in WM Motor, which was at its peak a few years ago, is because it did not have a good view of WM Motor's path of building its own factories when it lacks the strength.

Otherwise, he would have taken over all the top-ranked emerging brands. But regardless of whether he invests or not, it is almost impossible for emerging brands to develop without completely bypassing the influence of the Wei Lai Group or Tan Jincheng.

Companies like Wenjie, Xiaopeng, and Leapmotor, which he directly invested in, are directly included in the list of the Weilai Group. This means that, to date, Tan Jincheng still maintains a huge influence over at least four independent car companies.

Leapmotor is learning from Wei Lai's pragmatic and low-key attitude, taking the path of self-developed technology to reduce costs and increase efficiency, making electric vehicles with cost-effectiveness similar to the Aion series, and taking a people-friendly approach.

Xiaopeng learns from Weilai's intelligent driving technology, focusing on a technological and fashionable approach, and seeking a breakthrough among young users.

Wenjie, a very well-known company, has learned from Weilai's capabilities in marketing and service. The entry of new players proves that anyone can try to make cars, but selling cars is a technical skill.

In today's market, it's no longer the case that if you build a good car, it will definitely sell well. Some electronic waste sells very well, while some good products are buried.

Companies like WM Motor and Hozon Auto, which have not received any investment from him, also need to maintain good relationships with Wei Lai or Tan Jincheng himself to ensure supply chain security.

In terms of supply chain bargaining power, these new forces are all in a weak position, and maintaining a good relationship with Tan Jincheng himself is the best option.

It's also important to know that even if ByteDance doesn't directly invest in these emerging brands, their shareholders are venture capital firms and international capital such as Tencent, Baidu, Alibaba, and Sequoia Capital.

These capital sources are also closely related to ByteDance's advertising platform, and it would not be difficult for ByteDance to intervene in these companies when the time is right.

Oh, and don't forget, he also holds shares in Tesla, a leading global brand among emerging electric vehicle companies, and he has a good relationship with Elon Musk.

Holding shares in these companies is different from buying them on the secondary market. Those on the secondary market are just financial investments and have little say in the matter.

Upon closer examination, one will realize that Wei Lai's style is just like Tencent in the automotive industry.
"Whether Weilai Motors makes money or not doesn't matter, but with the support of the entire system, the Weilai Group is definitely going to make money."

This was the goal that Tan Jincheng set when he ambitiously entered the automotive industry. Just like in the internet industry, the rise of every emerging internet company can be an impact on BAT (Baidu, Alibaba, Tencent).

However, in the end, you will find that the rise of emerging internet companies can bring certain benefits to BAT (Baidu, Alibaba, Tencent), which is why BAT has maintained absolute dominance in the internet industry for so many years.

Even the Orange Group, which has already subtly established its own independent system, cannot escape this vicious cycle.

What Weilai, or rather Julang, wants to do is to achieve a market position in the new energy vehicle sector similar to that of BAT (Baidu, Alibaba, Tencent). As for monopoly? That simply doesn't exist. Weilai only sells a few cars a year, and its overall market share is less than 10%.

"You've got some skills, kid. I'm really curious to see what you'll do next."

Geely, which started relatively late in the new energy field, has not escaped Wei Lai's influence, at least in terms of patent technology. Wei Lai's influence is already greater than he imagined.

At the recent exhibition, Tan Jincheng appeared at the Chrysanthemum Factory's booth twice, looking at it very carefully, which was something he was particularly curious about.

What attracted this young man?
(End of this chapter)