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Cutting Factories, Chopping Staff, Cutting Cadres, Making Shoes Big Factory Baocheng International Abacus.

2020/5/18 12:07:00 0

Baocheng International

The new crown pneumonia epidemic hits the global economy. The world's largest foundry shoe factory is also in deep danger. "Shoe king" has become a crisis. It not only announces high salary cuts in Taiwan, but also has no pay leave for workers. It also shut down the Hubei plant in May 14th (yesterday), sent more than 4000 workers to Hubei factory, and even sent over 200 cadres directly from mainland China. The outside wants to ask, "shoe king" what happens exactly? After the outbreak of the new crown pneumonia this year, the famous sports big Nike and Adidas chopper directly hit Baocheng's shoe orders. Insiders said, "orders for the second quarter were slashed, and orders for the third quarter were almost invisible."

Open up Baocheng financial report, before April this year, Baoji consolidated revenue is Eight hundred and seven point four Billion yuan, compared with the same period last year. One thousand and thirty-eight point one one Billion yuan, recession Twenty-two point two %, a new low of nearly 6 years, Yu Yuan made shoes, accounted for 6 of Baocheng revenue, Yuyuan also declined more than 2 yuan, so that Baocheng is facing the biggest crisis in 51 years of entrepreneurship. Cai Peijun, executive director of Baocheng, who is known as "iron blood Princess", urgently offered a blood stopping strategy, hoping to pass the crisis by cutting factories and chopping people. The first to bear the brunt of the closure is the Yangxin plant in Hubei, which has more than 4000 employees in total, and Taiwan and Lu Gan have transferred to other factories. Baocheng emphasized that the Hubei plant accounted for less than 2% of the total shipment. After closing the factory, it had no impact on the overall shoe production capacity, but in fact it had an impact on the livelihood of the grass-roots employees. Baocheng produced more than three hundred million pairs of shoes last year. One of five pairs of shoes in the world is from Baocheng, Baocheng from Taiwan. It leaped to become the global shoe king by cheap Chinese factories and cheap manpower. In 2011, Yuyuan's capacity in China was nearly 5. In 538 production lines, there were 255 in China.

As the Chinese government promoted the five risk one gold policy and increased the burden on enterprises, Baocheng began to quietly reduce factory capacity in China. During the past five years, it can be clearly found that China's capacity has continued to shrink, and its capacity has shrunk from nearly 30% in 2015 to 15% in the previous year. Last year, it was only 10%. Baocheng is now in the shoe factories in China. There are only three factories in Dongguan, Guangdong, Gao Gao and Jiangxi, and Guangdong, Beiyang and so on. There are three factories in Guangdong, two in Jiangxi and only one in Hubei. After closing the factory in Hubei, Baocheng will only have six factories in China, and its production capacity will drop to below 10% at one fell swoop. Baocheng's main shoemaking factory has been transferred to Vietnam, and there are 7 factories in Vietnam, accounting for 46% of the total output and about the number of employees. Fourteen point five Ten thousand people, followed by Indonesia accounted for 37% of the total output. Baocheng not only reduced China's production capacity, but also reduced the proportion of Chinese cadres in Baocheng group. Yuyuan has also been sent to Vietnam and Indonesia's factories in the current epidemic, and more than 200 land workers have been relieved of their labor contracts, people familiar with the matter said. Baocheng also admitted frankly that in the face of the epidemic, Lu Gang was a direct source of dispatch. Now Lu has also been protesting through other pipelines in the mainland and Baocheng. According to people familiar with the matter, these land companies are not very cheap because of their high seniority and salaries, and because of the dispatch of Vietnam, Baocheng pays well for their welfare. The cost of the company is also higher than that of the cost. Therefore, Baocheng simply takes advantage of the opportunity of the outbreak to dispatch them in a single way, greatly reducing the cost of personnel. Baocheng explained internally that a moonlight in the world would cost 1 billion 500 million yuan to pay. In such a severe situation, people could only survive. It was thought that Baocheng had chosen to close factories and cut people in order to survive the difficulties, but the real reason was closely related to trade war. According to people familiar with the matter, in fact, Cai Peijun just took advantage of the situation. Baocheng continued to shut down factories in the mainland. It was only low-key and silent. The Hubei factory was shut down on the surface for epidemic. In fact, apart from the old reason of five risks and one gold, another key factor is the Sino US trade war.

On the face of it, people familiar with the matter explained that Baocheng closed the Hubei plant because of the impact of the epidemic and was unable to return to work, so it was very difficult to resume the factory directly. In fact, the real reason was that after the Sino US trade war started, the brand manufacturers in Europe and the United States strongly urged the factories to transfer their production lines to Southeast Asia, India and other places. The brand factories even directly transferred to Vietnam or Hubei. Other Southeast Asian countries have capacity. There are technology companies, frankly speaking, in the Sino US trade war, the Taiwan OEM chain can only choose side stations. Customers directly say that the goods here do not sell you, so you have to think of other ways to develop your own supply chain, and the supply chain is equivalent to the elimination of re training. Not only Baocheng, but also other generations of factories, such as apple and IOT, are required to transfer their production lines to Southeast Asia, so as to ensure the operation of production lines. Cai Peijun simply did not make two endless efforts to reduce the cost of personnel and the cost of the products. He first matched the brand factory's policies, and gradually transferred the production base to the local cadres. Cai Peijun once admitted that for customers, if customs duties were to bear more, customers would think about whether to transfer or not. However, Baocheng was originally a Multi Country layout, so the proportion should be adjusted. Cai Peijun said that Baocheng has invested more than 20 years in Vietnam. Vietnam has a larger factory scale than the Chinese factories in the past. Vietnam's management mode needs to integrate with the local culture and environment. Baocheng is also adjusting to Vietnam's factory's ability to use more professionals in the field. Of course, Baocheng will not let go of the Chinese market. After Cai Peijun took over, Bao began to transform the strategy, turning China's position from the world factory to the consumer market, and Yu Yuan, who is responsible for shoe-making business, withdrew from China and changed to Baosheng, which is responsible for the distribution of China's products. He made the two brands of YY SPORTS and Sheng Dao, mainly responsible for sporting goods sales, brand and agency business.

In the past, Cai Peijun had mentioned many times that he hoped to make Baozhong become Baocheng's second profitable golden rooster. Baosheng was originally under Yuyuan banner, and was listed in Hongkong in 2008. Currently, it has nearly 10000 stores in China, 60% are direct stores, and 40% are franchises. Unexpectedly, the terminal also caused closure of the city due to the outbreak of the epidemic. It was impossible to do business. Baosheng revealed that nearly eight thousand stores were faced with the dilemma of going out of business when the epidemic was most serious. Although the epidemic slowed down, the storefront had been opened, but the impact could not be underestimated. According to people familiar with the matter, taking the shop in Shanghai as an example, although the shop is open, there are no guests at all, and two or three kittens a day can be very good. Goods can not be sold at all, stores are empty, and there are more waiters than customers. Market participants say frankly, Baosheng is even more worried about the impact of the epidemic on all walks of life, the consumption of people to tighten up, willing to spend less people, and the reduction of consumption is really a worry, only Baosheng last year's marketing expenses of more than 800 million yuan, opened the door, things can not sell, light rent, personnel costs and other costs, enough to make Baosheng pressure. Although the epidemic has been postponed, all countries are faced with the heavy burden of economic burden. They must not be afraid of fear. They will sacrifice policies to stimulate consumption. Whether or not they will be effective will remain to be observed. Source: shoe industry headlines

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