Enterprise restructuring of Hangzhou Second Cotton Textile Factory

The predecessor of Hangzhou Zhonghui Cotton Textile Co., Ltd. is Hangzhou Second Cotton Textile Factory, the largest cotton textile joint venture in Zhejiang Province with a history of 40 years. The company has experienced three shocks: bankruptcy, reorganization, and restructuring of state-owned enterprises. These three shocks have not only had a great impact on the management foundation, workforce, production and operation of this old state-owned enterprise, but also continue to eliminate the inherent shortcomings of state-owned enterprises such as unclear property rights systems, rigid labor and employment systems, and inactive mechanisms. . From Hangzhou Ermian to Hangzhou Zhonghui, this is not a simple change of the company name. It contains two thorny issues on how to solve the restructuring of state-owned enterprises. That is: one is where does the money come from, and the other is where do people go? In other words, how can state-owned enterprises maintain stability during restructuring? Keep growing? The restructuring process of Hangzhou Zhonghui Cotton Textile Co., Ltd. has better answered these two questions. In 1998, in accordance with the overall arrangements of the Party Central Committee and the State Council to use the textile industry as a breakthrough point to implement reforms of large and medium-sized state-owned enterprises, the Hangzhou Municipal People's Government implemented legal procedures to suppress and bankrupt Hangzhou Ermian. In November of that year, the Hangzhou Zhongxing Textile Factory, which was still state-owned, was reorganized. With the acceleration of the restructuring process of state-owned enterprises and the Hangzhou Municipal People's Government's requirements for the orderly withdrawal of state-owned assets from highly competitive industries, Zhongxing Factory was listed as a key enterprise to complete the restructuring in 2000. At the same time, it was determined that the restructuring of Zhongxing Factory "can only be carried out through public bidding and auction of net assets." The subject matter of the bidding auction is fixed assets and land use rights in the production area. Through the evaluation and confirmation of fixed assets and land use rights, the Hangzhou Asset Appraisal Office determined that the base price of the assets subject to the restructuring and transfer of Zhongxing Factory was 123 million yuan.

On December 8, 2000, the Hangzhou Property Rights Trading Center published an investment invitation announcement for the restructured assets of Hangzhou Zhongxing Textile Factory in Zhejiang Daily and Hangzhou Daily. In order to ensure that the bidding and investment promotion is conducted in a fair, just and open manner, a committee composed of 4 employee representatives from 10 units and enterprises including Hangzhou Municipal Economic Commission, Foreign Economic and Trade Commission, Structural Reform Commission, Labor Bureau, State-owned Assets Bureau, Finance Bureau, and Municipal Federation of Trade Unions was established. Bid and Investment Promotion Committee. Among 10 Chinese and foreign companies that were interested in participating in the bidding process, Zhejiang Guosen Holding Group Co., Ltd. won the bid with a transaction price of 123.45 million yuan through the prescribed bidding process. On January 5, 2001, the "Auction and Investment Transaction Confirmation" was formally signed. At this point, the original assets of Hangzhou Zhongxing Textile Factory were officially withdrawn from state-owned assets and became corporate-owned assets. From the government's perspective, the transfer of state-owned assets through bidding also solves the problem of "where does the money come from" for the restructuring of state-owned enterprises and provides financial guarantee for the restructuring of state-owned enterprises. In addition to clarifying the property rights system, the reform of state-owned enterprises also has another important symbol: the transformation of the original employees' "national" status. That is, the status of "ownership by the whole people" and "owner" status formed under the original planned economy is transformed into a "natural person" and "social person" who are employed according to the needs of the labor market under the conditions of the market economy. In 1998, when Hang Ermian went bankrupt and Zhongxing Factory was reorganized, because the status of the employees had not changed, the labor contracts were still signed for a long period of time. The employees had outdated ideas and concepts, and the mentality of laziness towards the company was serious. When enterprises transform their operating mechanisms, there is resistance at every step. After the ZTE factory was sold through bidding in February 2001, the problem of employee status conversion was first solved. We also call it "get off the bus first", that is, all the employees on this state-owned "old bus" at the Zhongxing factory get off the "bus", which means that all employees are terminated from their labor contracts. The economic compensation after the labor contract is terminated, according to the relevant provisions of the Labor Law, is based on the individual's average monthly salary in the 12 months before the labor contract is terminated. Based on the individual's working years in the unit, an amount equal to the amount of compensation will be paid for each full year of employment. Replacement of one month's salary as financial compensation. Among them, if the average monthly salary of employees is lower than the average monthly salary of the enterprise, the salary will be calculated and paid based on the average monthly salary of the enterprise (983 yuan). In late January 2001, Zhongxing Factory issued a notice of termination of the labor contract and a notice of receipt of economic compensation to all employees. On February 28, the labor contract between the company and 2,400 employees was officially terminated, and the employees received economic compensation in accordance with regulations. All of them later left the company.

The employees who got off the "car", that is, after the labor relationship between the company and the employees is terminated, where will the employees go? With the approval of the relevant departments of the municipal government, more than 2,400 employees of the Zhongxing Factory and the laid-off employees and retired personnel (a total of 3,330 people) in the Zhongxing Factory were diverted and resettled through the following methods:

First, get off the bus first , and then get on the bus, that is, the new enterprises after restructuring will absorb a group of new enterprises.

This is not a simple and general recruitment, nor does it mean to get everyone on the bus again, but to recruit the best according to the principles of leanness and efficiency, and to compete for positions. As of the end of April, the new enterprise had recruited 934 Zhongxing factory employees.

Secondly, the more than 330 former retirees are still required to go through retirement procedures when they reach the legal retirement age in accordance with the provisions of the Municipal Government Minutes (1998) No. 103.

Third, the 600 laid-off workers who have entered the re-employment center and are willing to leave the center to terminate the custody agreement will be given financial compensation in accordance with regulations. Among them, those who are self-employed, engaged in self-employment or start a private enterprise and obtain an industrial and commercial business license can also receive employment subsidies (the standard is: those with more than 16 consecutive years of service, 300 yuan per year of continuous service, but the maximum It will be calculated for no more than 30 years. If the continuous service period is less than 16 years, it will be paid at half the rate) and one-time subsidy (the standard is: more than 16 years of continuous service, based on the month of shortening the custody period, based on the basic living expenses standard, of which the first year 325 yuan/person per month, 260 yuan/person per month in the second year, and 255 yuan/person per month in the third year. A one-time subsidy will be given at a half rate for those with less than 16 consecutive years of service). Those who are unwilling to be transferred can stay in the center until the custody period expires in November 2001 and then be transferred out of the center.

Fourthly, after the land expropriation workers terminate their labor contracts, in addition to receiving relevant fees in accordance with regulations, if the pension insurance payment period is less than 10 years, they will make a one-time payment for 10 years.

Fifth, any employee who is over 50 years old for men and over 40 years old for women before February 28, 2001 and meets the conditions for "co-payment" will have 3 months from the date when the new enterprise signs a labor contract. Those who are not recruited by the new enterprise within a certain period of time can apply for "co-payment" in one go according to the payment base and payment ratio stipulated by the local social security department (that is, agree to pay pension insurance and critical illness insurance to the legal retirement age).

Sixth, those who meet the conditions for retirement and resignation shall handle retirement and resignation in accordance with regulations.

According to the above-mentioned diversion and resettlement method, among the more than 2,400 employees of the original Zhongxing factory and the 600 laid-off personnel in custody, in addition to the nearly 1,000 employees hired by the new enterprise, more than 460 people meet the conditions for "co-payment" In addition to the employees and more than 280 laid-off workers who have not yet left the center, there are 1,100 employees who are self-employed or registered as unemployed. By November 2001, all diversion and resettlement were completed. In order to ensure the smooth progress of Zhongxing Factory's bidding and investment transformation work, during this restructuring, in addition to bidding for investment and transfer of assets related to production and operation, and diversion and resettlement of laid-off employees who are in service and under trusteeship, Zhongxing Factory will also provide non-operating employees with the remaining non-operating employees. The management of sexual assets (including staff hospitals, guest houses and other scattered properties and land use rights) and more than 5,200 retirees and 368 retired personnel is managed by establishing "two centers", that is, establishing Hangzhou Ermian Retirees Service Center and Hangzhou Zhongxing Property Management Center. The two "centers" have independent legal person status, and their assets are state-owned. They are affiliated to Hangzhou Asset Management Company and are equipped with full-time management personnel. The original enterprise employee hospital was classified as a retiree service center, with medical services for retirees as the main body and external services at the same time. The funds are partly self-financed. The expenses required for management personnel's salary and daily management shall be approved by the municipal competent department and allocated by the municipal finance in installments, with special funds and closed operation. The management work of the two "centers" has been running for more than a year. All the remaining issues of the original enterprise after the restructuring have been handled by the two "centers". All the burdens of the new enterprise have been stripped away, and it is a company with no assets, liabilities, and no separation. Retirees, "three no's" enterprises with no legacy problems, and restructuring have created a good and relaxed external environment for new enterprises. After Zhejiang Guoxin Holding Group (now transformed into Aerospace Zhonghui Group Co., Ltd.) won the Hangzhou Zhongxing Textile Factory, it jointly invested US$20 million with Hong Kong Weiliang Development Co., Ltd. (ratio: 75:25), of which registered With a capital of US$10 million, it established a Sino-foreign joint venture, Hangzhou Zhonghui Cotton Textile Co., Ltd., and had full authority to implement restructuring and management of the enterprise. After the establishment of Hangzhou Zhonghui Company, it began to operate in accordance with the requirements of the modern enterprise system and implemented a general manager responsibility system under the leadership of the board of directors. The board of directors consists of five people, with the Chinese party serving as the chairman and appointing the first general manager. In terms of the setting up of management agencies, the production and operation command organization should be set up according to the requirements of being capable, efficient and able to respond quickly to market dynamics. The company has set up two production workshops according to the existing scale, namely the spinning department workshop and the weaving department workshop.

The management organization has set up the general manager's office, finance department, supply and marketing company, technology development department, product development center, e-commerce office, and production service department, with a total of 81 management personnel. Among them: 27 are supervisors and above.

In terms of the labor system, the company signs the first labor contract for two years for the employees it hires. It implements dynamic management of employees in accordance with the company's "Management Regulations", with rewards and punishments, and rewards and punishments are clear. Operational production has been changed from the previous "four shifts and three operations" to "three shifts and three operations", and the number of employees has been reduced by 800. In terms of the employment system, the company adopts an open two-way selection, adheres to the basic employment principle of "promoting the capable, letting the mediocre go, and relegating the mediocre", attaches great importance to and gives full play to the role of all kinds of professional talents and backbones, and implements the practice of one person with multiple positions. The employment mechanism of merger belts.

In the distribution system, based on the principle of distribution according to work and the consistency of responsibilities and rights, the traditional distribution concept is broken and tilted towards skilled workers, management backbones, product development and sales personnel. My income is consistent with my contribution to the company. Link contributions to widen the distribution gap and form an effective incentive mechanism.

In terms of life logistics management, the company abandoned the traditional model of corporate social management, and implemented socialized recruitment and contracting for employee canteens, environmental sanitation, and collective dormitory management. These contractors have no labor relationship with our company. The company only supervises and inspects food quality, environmental sanitation, dormitory sanitation, and public security management, and pays them according to quality.

The company has established party committees, grassroots party branches, trade unions, and youth league mass organizations. The company will also establish a corporate culture with Zhonghui characteristics, care about the work, study, and life of every employee, and create good work atmosphere, and carry out ideological and political work and trade union work with a new look that adapt to the market economy.

From Hangzhou Ermian to Hangzhou Zhonghui, the company experienced bankruptcy and restructuring in two years. The first bankruptcy and reorganization was from state-owned to state-owned. The company only reduced its debt burden, but still had a heavy burden; the second time of bidding for investment, the company completely transformed its property rights system and employee status, and the employees' mentality and ideological concepts changed. The company has undergone tremendous changes. The company has thrown away all kinds of baggage and traveled lightly, showing its vitality: in 1999, the reorganized company stopped the loss trend of the old company and realized a profit of 9.7 million yuan that year; in 2000, the company's development momentum continued unabated. , creating another profit of 11 million yuan; the enterprise after restructuring in 2001 showed its development potential and vitality, realizing a profit of 16.2 million yuan. The experience of enterprise restructuring fully demonstrates that only by following economic laws and carrying out thorough reforms in terms of property rights systems, employee identities, and internal mechanisms can state-owned enterprises be full of vitality and show their vitality.