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Dongfeng spins off three subsidiaries at one go

Echo From Gasgoo| November 23 , 2017

Dongfeng news, Dongfeng model

Shanghai (Gasgoo)- On November 14th, the official Wechat subscription account of Dongfeng Motor posted an article "Blockbuster! Three Subsidiaries of Dongfeng Will be Transferred Free". The announcement said that it will spin off three subsidies which is respectively responsible for providing electricity, water and heating for the employees.

At the beginning of the establishment, central enterprises had to address the needs of their employees concerning clothes, food, accommodation and transport. However, nowadays, the rule "enterprises responsible for public services" is not a must, and even becomes a burden for central enterprises.

As the second automotive enterprise in China, Dongfeng was located in Shiyan, Hubei, considering national defense security. Shiyan in the 1960s was a very small town with households less than 100, and underdeveloped facilities. Therefore, Dongfeng could only built a family dormitory and a hospital, and established affiliated electricity, water and heat companies for employees.

However, according to the guiding opinions issued by the General Office of the State Council, by the end of 2018, the separation and transfer of "three provides and one management" (provide electricity, water and heat and dormitory community management) of state-owned enterprises' dormitory should be implemented nationwide. Besides, necessary maintenance and upgrade of relevant equipments and facilities should be completed to average level, and every household should be installed with an electric and water meter and charged accordingly.

In September this year, the chairman, secretary of the Party Committee of Dongfeng, Zhu Yanfeng said in an interview that the separation and transfer had worked quite smoothly in Dongfeng. Dongfeng went through the process ahead of timelines. In addition, Dongfeng is also accelerating the separation and transfer of other supporting organizations.

The separation and transfer work was only a part of Dongfeng's reform plan. It established an office responsible for comprehensively pushing the reform and implementation work. Dongfeng set out seven objectives for reform: optimize the career layout; adjust the regulation pattern; promote mixed ownership; plan corporation governance; strengthen reform of labor, personnel and distribution; address problems left before; and refine Party and cultural building.

Dongfeng has streamlined management and optimized decision-making procedures. For instance, Dongfeng Special Commercial Vehicle reduced 5 legal persons, and Dongfeng Automobile Hydraulic Power was lifted to secondary subsidiary in 2016. In 2017, Dongfeng planned to reduce 42 legal persons, and adjust the management level of 5 legal persons.

On September 20th, Dongfeng transferred 85% shares of Dongfeng Industrial, which was established to address the employment problem of employees' family members. All these efforts are made to streamline the management and release more potential of state-owned enterprises. If the key business improves, there is no doubt that the value of state-owned assets will maintain and increase.

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