XCMG: From the Verge of Bankruptcy to be the Seventh Biggest Manufacturer

“We keep unswerving faith in party building, independent innovation, internationalization and talent training for a long term, because they are the four secrets that have taken XCMG from the verge of bankruptcy to the seventh biggest player in the world!” said Wang Min, Secretary of the Party Committee and Chairman of Xuzhou Construction Machinery Group Co., Ltd. (XCMG) to the reporter.

Party Building: the Focal Point

In 1999, after six rounds of discussions on the bankruptcy of XCMG by the Standing Committee of CPC Xuzhou Municipal Committee, Wang Min was appointed as Chairman of the group. At that time, XCMG was seriously insolvent. Many of its leaders sponged and took more than their due incomes, and many of its subordinates embezzled the private assets of the group or kept their own accounts. The workers complained about sharp income reduction. Some of the group leaders even suggested, “We’d better issue B shares as soon as possible to raise RMB 200 million and split it before the company is over!”

The first action that Wang Min took was managing the party building and the working style of leaders. He initiated strict investigations into the embezzlement of assets, stopped providing free cars for the leaders, took back the houses that were allocated to the leaders unreasonably, ended unnecessary banquets and cliques, promoted serious work discipline ... ...Since then, the authority of the Party Committee has been defended and people have been united together. “He successfully caught the focal point!” said Lu Chuan, President of XCMG, emotionally

During the interview, the reporter constantly heard those words from the leaders and workers at XCMG: We have to show better morale than our competitors in the United States, Germany and Japan if we want to overtake them; leaders of a state-owned enterprise act on behalf of the state and must be better than our counterparts in private enterprises!

More than 70 leaders of the group have been dismissed over the past 18 years when XCMG was leading the construction machinery industry in China and was catching up with the advanced level in the world. They did not make big mistakes, but they were dismissed just because they did not meet the “criteria of being a good leader at XCMG”, that is, “being energetic, concentrated and vigorous, full attendance, with might and main, and working to the full capacity”.

In 2017, XCMG recorded a 23.4% increase in revenue and a 109% increase in exports. It was ranked the 7th among the global industry players released by the China Construction Machinery Association. It was the only Chinese enterprise to make into the Top 10.

Innovation to Reach the Peak

Before 2000, the largest crane in China could lift a maximum weight of 50t. Today, XCMG has created the largest 1,600t all-terrain crane and 3,600t crawler crane in the world.

XCMG is constantly breaking the monopoly of German, American and Japanese multinational corporations in the areas of lifting, earth-moving, road maintenance, excavation, concrete and piling machinery by introducing heavy-duty trucks, environmental sanitation equipment and open mining equipment to be a global mainstream supplier.

“For more than a decade, we have always adhered to the main business of construction machinery so as to achieve the goal of reaching the ‘Everest’ of the global industry. It is not difficult for XCMG to develop real estate in Xuzhou, but we won’t do that!” said Wang Min.

In order to guarantee the development of high-end products, the annual R&D investment in XCMG accounts for over 4.2% of the total sales revenue. XCMG has established a R&D system that is led by national key laboratories and national industrial design centers, based on the technical centers of the subsidiaries and supported by overseas R&D institutions. It masters 5,669 valid authorized patents in core technologies. The highest award of technology innovation project that the group has ever received is RMB 10 million.

Over the past 9 years, XCMG won 6 first-class awards for state-level enterprise management innovation achievements, among which the “343” comprehensive budget management system was promoted by the Ministry of Industry and Information Technology across the country.

Going International for the “Influence of China”

“Loader! Loader!” shouted an Iranian airport security officer, pointing at the XCMG logo on the uniform of Liu Jiansen, General Manager of XCMG Import and Export Co., Ltd. This anecdote that occurred two years ago made Liu Jiansen proud. “It speaks of the overseas influence of XCMG!”

From 2010, XCMG began to stride toward the international stage. At present, its products have been exported to 178 countries. The group has 3 large manufacturing bases and 10 assembly factories in Asia, Europe and America, hiring more than 3,000 foreign workers.

By building overseas factories, XCMG continues to open up the international market; through overseas mergers and acquisitions, XCMG has learned from the international advanced technologies extensively. At present, XCMG has sold its products to 57 of the 65 countries along the “Belt and Road”. Almost all of the major construction projects in Uzbekistan used XCMG equipment. Schwing, a German company acquired by XCMG, has become the No.1 brand of concrete machinery in the European and American markets.

In order to crack the cultural differences in its overseas subsidiaries, XCMG has assigned its Party Secretary to serve as the “Chief Cultural Officer” at its overseas factories. It has also set up “Double General Managers” - the Chinese general manager is responsible for human resources, budget objectives, performance appraisal and staff management, while the foreign general manager is responsible for day-to-day operations and dealing with locals. This arrangement is very popular at the foreign subsidiaries.

Talents: the Main Force for the Peak Climbing

In 2013, XCMG used the RMB 300 million that it was awarded by the superior department to purchase business aircraft to fund the building of apartments for young talents. The 1,380 apartments it built can accommodate more than 5,000 residents, and employees with a bachelor degree or above can at least get a private apartment. To enhance the sense of belonging among the employees has always been a top priority of XCMG. Over the past 10 years, the per capita income of its employees has increased by 3.1 times, reaching RMB 92,000 in 2017.

These talents shoulder the great tasks of climbing to the peak in the industry. Of more than 22,300 employees aged 34 on average in XCMG, more than 6,000 are technicians, including more than 220 technical experts. There are 6 national model workers and 867 advanced employees at the group level or above. Senior workers and those having higher status account for more than 50% of the skilled workers.

In June 2017, XCMG began to implement the “Seniority Honor Mechanism”, which honored 6,113 workers who had worked for 10-40 years “XCMG Seniority Medals” that ranged from one star to five stars. Many senior workers were so touched that they burst into tears! Some of them were even very excited when they shared the story with the reporter after six months!

“Our next goal is to be among the Top 5 by 2020 and the Top Three by 2025 in the world!” said Wang Min firmly. (www.chinatrucks.com)

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