My 1999

Sanjiang Renault was completely closed, all employees were fired, and only 29 gatekeepers were left.

There was only one general manager and financial manager left on the French side, and the rest of the staff were withdrawn to France.

It really fits the saying.

Its rise is vigorous, and its fall is sudden.

Soon, Delong, who had the dream of "making cars", took a fancy to Aerospace Brilliance.

It planned to build it into a strategic development platform for the company in passenger cars and commercial vehicles.

After two consecutive failures, both China Aerospace Science and Industry Group and Renault were extremely disappointed with this project.

Therefore, Delong's acquisition was very smooth and the price was not high.

But Delong's subsequent docking with Renault was not smooth.

There are two reasons.

First, Renault is now in contact with Dongfeng and is not optimistic about the Aerospace Torch project that has failed twice in a row.

Second, after entering 2003, Delong's financial crisis has been very serious, and it is difficult to come up with enough money to operate this huge project.

Therefore, it was not until May 2004 that Aerospace Torch resumed work. However, without Brilliance's mature local supply chain for commercial vehicles, Taffic's price could not be maintained at a low price.

Fortunately, Xiang Torch itself is also an auto parts giant. As long as there is enough time, it is not difficult to integrate its own industrial chain.

Unfortunately, Delong no longer has enough time to operate.

By the end of 2004, Xiang Torch had a total revenue of 11.3 billion Chinese yuan, 2.875 billion Chinese yuan in inventory, and 1.758 billion in accounts receivable.

But compared with the huge revenue, Xiang Torch's net profit was only 290 million Chinese yuan, less than 3%.

Far lower than the same industry.

It can be seen that although Xiang Torch has huge assets and amazing revenue, it is a bloated giant with problems in internal integration and management.

After reading it, Peng Shengyu put down the information in his hand.

"You are the president of Alloy Shares. I think you should know where the problem of Xiang Torch lies?" Xu Liang said.

Peng Shengyu nodded.

They are all industrial groups and belong to Delong.

When it comes to specific issues, although there are differences, they are roughly similar.

"Tell me about it."

After Peng Shengyu responded, "First, poor management, redundant personnel, and lack of reasonable incentive mechanism.

Second, the acquired company has not been thoroughly integrated, inefficient, and has a heavy historical burden.

Third, there is a lack of effective supervision, and internal corruption is serious.

Fourth, there is a lack of R\u0026D investment, the technical level is not high, and the product homogeneity is serious, making it difficult to obtain high returns.

..."

There are more than a dozen items, each of which can hit the point, and it is obvious that they have been studied.

Xu Liang and Jiang Xiaoyang looked at each other and saw the recognition in each other's eyes.

"It seems that you have studied the problem of Xianghuo Torch a long time ago?" Xu Liang asked with a smile.

Peng Shengyu nodded and said: "In fact, at the end of this year, Mr. Tang Wanxin planned to merge Xianghuo Torch and Alloy Shares into one company.

So, I read a lot of information about Xianghuo Torch in advance."

"Don't fight a battle without preparation, very good." Xu Liang praised.

"You are too kind. I am not a professional business major, so I have to be the first to fly."

"Successful entrepreneurs are not necessarily business majors. I am a genuine art student. The key is responsibility, decisiveness and strategic vision. You are very good in these aspects." Xu Liang praised.

"You are too kind. I just became the president of Alloy Shares by force. I have always been trembling with fear that I will not do well."

"But the fact is that you are doing very well." Xu Liang smiled.

Pause.

"Do you think Xiang Torch and Alloy Shares need to merge?"

"Mr. Xu, I will abide by the decision of the head office." Peng Shengyu said.

Although he is not good at speaking, he is not stupid.

Say that he supports the merger?

Will he be suspected of grabbing power?

Reject?

He does hope that Xiang Torch can merge with Alloy Shares.

After all, he is a human being, not a saint.

He also hopes that he can have a brilliant career and obtain a higher social status and income.

Although Alloy Shares is very good, it can never be compared with the giant "Xiang Torch" in the automotive field.

Xu Liang is also a smart man. From Peng Shengyu's answer, he guessed what he was thinking.

So he changed the question.

"If the two companies merge, how would you integrate?

Of course, forget about management. Judging from the integration case of Alloy Shares, you have enough experience and ability.

Let's talk about the business." Xu Liang said.

Peng Shengyu didn't know the considerations of the headquarters. He was worried that if his ideas conflicted with those of the headquarters, would he lose this opportunity?

But he also knew that he had to answer.

After all, the most important quality for managing a troubled company is decisiveness.

After a little thought.

"If it were me, the new company would retain the heavy truck business, passenger car business, as well as the power tool and garden machinery business."

"Tell me your reasons."

After Peng Shengyu nodded, "The reason for retaining power tools and garden machinery is mainly because after acquiring Mao Rui Company, we obtained the other party's technology and channels, and with Alloy Shares' dominant domestic production, we are not lacking in competitiveness in the world.

In contrast, whether it is the Second Machine Tool or the Black Cat Group, the product technology added value is too low, and it is difficult to maintain profitability in the increasingly fierce competition.

So Alloy Co., Ltd. should get rid of the dross and keep the essence, get rid of the weak and keep the strong.

The heavy truck industry is the core business of Xianghuo Torch, and it is also a dominant business, which should be retained.

The passenger car business should continue to be developed and strengthened. With the development of China's economy, from 2000 to the present, the passenger car industry has always maintained an annual growth rate of more than 50%.

In this growing giant market, we have laid a foundation and should not give up.

As for Xianghuo Torch's auto parts business, I think it should be sold. "

Subconsciously glanced at the expressions of Xu Liang and Jiang Xiaoyang.

After not seeing anything unusual, he continued.

"There are three main reasons.

First, although Xianghuo Torch's auto parts business is large in scale, its technical added value is too low.

Second, the automobile industry itself is a high-tech industry, and we lag behind our foreign counterparts. In order to make up for this gap, we must increase R\u0026D investment.

Limited funds must be used on the cutting edge.

So we can only choose one between vehicle R\u0026D and auto parts, and the whole vehicle is undoubtedly more valuable.

Third, there is a certain contradiction between the auto parts business and the passenger car business.

To make a good car, the most basic requirement is to use accessories with better quality and more reasonable price.

But obviously, Xianghuo Torch's auto parts business cannot fully meet the technical requirements of Xianghuo Torch's passenger car business.

This will cause a contradiction. "

This relationship is the same as the film and television industry.

Their own artists charge high prices, and if they are used, the cost of their own entertainment projects will be increased; if they are not used, it will become a waste of money and make their own artists dissatisfied.

So no matter which choice is a contradiction.

The best way is to abandon one.

"The world's mainstream automobile groups, General Motors, Toyota, and Mercedes-Benz have all had accessories businesses, but in the end they all sold or abandoned them. It's not that they don't recognize the value of them, but that they really can't coexist. "

Paused.

"Mr. Xu, Mr. Jiang, I'm done. "

Xu Liang clapped his hands lightly, "Good analysis.

Let me ask you a question.

Auto parts business and passenger car business, in which aspect do you think we have a better foundation?"

Peng Shengyu said directly: "Auto parts business. ”

Xiang Torch’s auto parts business has a complete industrial chain, and at least it is profitable.

Aerospace Torch’s passenger car and commercial vehicle business is still losing money.

“So, if we focus on the auto parts business, we only need to improve management, increase profitability, and then invest in research and development, and we can slowly increase the company’s net profit in the auto parts business and its industry influence.

In contrast, if we do passenger car business, the first thing we need to do is to solve the profitability problem, and then we can talk about R\u0026D investment and industry influence.

If we express it in numbers.

The auto parts business is 3 to 4, while Aerospace Torch is 1 to 2. Although the scale is there, it is still far from profitability.

Considering from the perspective of corporate operations.

It is obvious that the auto parts business is more in line with the company’s future development.

More importantly, the rapid development of Huaxia’s passenger car business is also a major benefit to the auto parts business itself, so even if we don’t make complete vehicles, we can still share the benefits of the entire market, and even get more.

After all, there are many giants in the passenger car business, but in the auto parts business, only a few, including Wanxiang, can compete with us. ”

“Mr. Xu, I understand. The new company will focus on four major businesses: heavy trucks, auto parts, power tools and garden machinery. "

Xu Liang smiled and said, "I called you here this time because I want you to be the CEO of Torch Group and be fully responsible for the integration of the two companies and the subsequent management work."

The speculation and desire became a reality, and Peng Shengyu was instantly excited.

"Thank you for your appreciation. I will do my best to complete the integration of Xiang Torch and Alloy Shares."

Xu Liang smiled and nodded, "Don't be too happy too early.

I will divest all the debts of Xiang Torch and Alloy Shares, and I will give you another 3 billion in development funds. You decide which direction to invest.

I will see the results in a year.

If you can increase the net profit margin of Torch Group to 7% by the end of the year, I will give you a 0.2% equity reward in the company.

If the net profit margin reaches 10% in the second year, the company will reward you with another 0.5% equity. ”

Spending money on acquisitions will increase total revenue rapidly, but profit margins will not.

The company's management, production, and after-sales service must be improved to generate more profits.

"Of course, the net profit ratio is only the most core assessment indicator. The company's total revenue, net assets, R\u0026D investment, and output ratio will also be included in the assessment. The specific standards will be sent to you in a few days."

"Understood."

Peng Shengyu nodded with a serious expression.

But his eyes were fiery.

He has been in Alloy Co., Ltd. for many years. As a non-Jiang Province, non-Dayuan Huiyi, he has never obtained company shares.