Weichai expands globally by investing in specialist companies
For Moteurs Baudouin, a marine diesel engine manufacturer in France, Weichai's inroads marked a turning point in its history.
The century-old high-end company had become insolvent due to a declining global shipping market. They were acquired by Weichai, a heavy trucks and parts maker based in the Weifang Hi-Tech Industrial Development Zone, in 2009.
When Weichai's management team first visited Baudouin to discuss acquisition details, workers of Baudouin were hostile. Some even made protest banners.
During a meeting with Baudouin's employees, Weichai's representatives promised not to cut jobs or resell the business. Weichai pledged to use its expertise and help Baudouin out of its difficulties.
After the acquisition, Weichai met its promises and made strides to develop Baudouin into one of its key wings. Weichai used its resources in research and development, procurement, manufacturing and marketing in China to lift the company out of losses.
Now, Baurouin's annual sales volume is 20-fold of what it was in 2008. It has rolled out new products and reported positive income and higher salaries for its staff members.
"We are here to rebuild the business. We will not apply the model of 'killing the hens for eggs'," said Ren Bingbing, vice-president of Weichai Power. She was assigned to work in Baudouin for two years. "I repeated it again and again during my stay in Baudouin."
When Ren returned to Weichai, she had established a close friendship with many staff members in Baudouin. Many managers at Baudouin believe the acquisition has brought benefits to the company.
Over the past 10 years, Weichai invested in many businesses, including Italian yacht-maker Ferretti and leading alternative-fuel power system developer Power Solutions International in Germany.
Throughout Weichai's global expansion, similar scenarios happened. Many companies, which were reluctant to be acquired, are actively seeking cooperation after gaining from acquisitions.
Weichai, which is seeking high-quality development and focuses on the real economy, is looking forward to partnering with more global leading businesses.
On Jan 15, Weichai signed agreements to acquire an 80 percent stake of German's Aradex, a specialist in electric drivetrains for the heavy-duty market.
As a small high-tech company in Germany, Aradex sees a chance to leverage its technology into much bigger markets with Weichai as a partner, according to Michael Schlingmann, CEO of Aradex.
"During the acquisition process, we spoke with 25 companies and 22 of them were from Europe or the United States. The strategy of Western companies is usually to buy turnover, not innovations. Sometimes they only want to get rid of competitors," Schlingmann said."Weichai has a long-term plan for itself and Aradex. We see that Weichai wants Aradex to grow fast and supports Aradex to reach that goal."
During the waiting time for German government approval, Aradex started some projects for the Chinese market, Schlingmann revealed. One is an electric version of a large construction machine. The other is the development of the next stage of direct current-direct current converters for fuel cell applications.
Also on Jan 15, Weichai agreed to purchase 51 percent of Austria's VDS Holding. The aim is to strengthen Weichai's position in the agricultural machinery sector.
Engineering services for transmission systems provided by VDS cover the whole process from solution planning and product design to on-vehicle testing. They have been widely used in the fields of traditional energy and new energy products.
VDS said it will support Weichai's powertrain development and personnel training.
The Weichai Power Industrial Park is one of the highlights of the Weifang Hi-Tech Industrial Development Zone. CHINA DAILY
Technicians work at a production line at Weichai Power. CHINA DAILY