Obviously, this will bring it closer to Shenlong Automobile, the joint venture in China, because Shenlong Automobile is headquartered in Wuhan, and the headquarters of the joint venture China Dongfeng Motor is also here.
In the opinion of industry insiders, the relocation of PSA China and South East Asia headquarters to Wuhan can not only reduce labor costs and rent and other office costs through disguised layoffs, but also the close proximity of the joint venture, which saves communication costs and will help improve efficiency.
But it is also clear that this relocation will not only face another brain drain, but that PSA’s closer proximity to Dongfeng also means that it is "farther" from another partner in China, Changan Automobile, and the psychological alienation from the partner is not good for PSA’s development in China.
It is planned to relocate 140 employees to Wuhan
Hu Xiaojun, director of public relations for China and South East Asia operations of PSA Peugeot Citroen Group, confirmed to The Paper that the group is indeed studying the possibility of moving some of its operations in China and South East Asia to Wuhan.
Hu Xiaojun said that the relocation would involve some of the employees working in Shanghai, about 140 people. The research and development center with more than 600 employees will not be relocated. The plan is currently under discussion and results are expected within this week.
However, this large-scale relocation has been less than five years since the last "south relocation". In 2010, PSA’s China business unit was "upgraded" to establish PSA Peugeot Citroe ? n Group Asia, with 350 employees in Shanghai, mostly technical personnel related to technology research and development and automotive design, and only a few operation personnel. The real business operations are handled by PSA Asia in Beijing, which brings inconvenience to work communication and collaboration. So PSA made a "big bet" on China and began to relocate PSA Asia in Beijing to Shanghai at the end of 2011.
Since then, PSA has established PSA Peugeot Citroen (Shanghai) Management Co., Ltd., in order to establish a joint R & D center with Dongfeng. "At the beginning, there were plans to build a R & D building in Shanghai, and there were grand investment plans. Now the Chinese and foreign parties no longer mention the R & D building in public, and the establishment of a joint R & D center between PSA and Dongfeng has also been put on hold," insiders told Surging News.
It is reported that since many employees had already settled in Beijing at that time, not many employees moved their families to Shanghai. Although some moved to Shanghai temporarily, they also left PSA after finding other jobs in Beijing. It can be said that this relocation caused a large number of talent loss, which "greatly damaged the vitality" of PSA’s China and South East Asia operations department.
Moving to reduce costs?
"There are now fewer than ten people left from Beijing to Shanghai, and only two or three of them have a Beijing hukou. This time, people from Shanghai, a first-tier city, move to Wuhan, a second-tier city. Shanghai people are definitely not willing to go, and foreigners who have families in Shanghai are also not willing to go. Only those who are single or older and have difficulty finding a job in Shanghai will consider going." An employee who resigned from PSA’s Shanghai management company told The Paper. In his opinion, a lot of talents have been lost from Beijing to Shanghai, and now they have to move from Shanghai to Wuhan, which is bound to "hurt their vitality" again.
It is understood that the specific compensation measures have not been announced yet, and it is expected to be announced in the near future. "PSA has just recovered, and its financial resources are still very tight. Moving to Wuhan can reduce the cost of office space rental. In addition, there must be many employees who are unwilling to go to Wuhan, which can also achieve the purpose of disguised layoffs, and even if they recruit more people in Wuhan, the labor cost is lower than that in Shanghai." An insider analyzed the surging news reporter that since Dongfeng Motor invested in PSA, many functions of PSA’s headquarters in China and South East Asia are indeed unnecessary, such as the marketing and product department. In the past, if Shenlong wanted a new model, it had to communicate with PSA’s French headquarters through the marketing and product departments under PSA’s China and South East Asia headquarters, but now Dongfeng is a shareholder of PSA, and Dongfeng can communicate directly with PSA’s French headquarters. "Some departments really don’t need to exist," the person said.
Pro-Dongfeng Shuchang’an?
However, in his opinion, the reason why PSA did not move the headquarters of China and South East Asia to Shenzhen, where another Chinese partner is located, but moved to Wuhan, where Dongfeng is located, has a lot to do with PSA’s South East Asia market development in the future.
Data show that in 1992, Peugeot Citroen Group entered China and established a joint venture with Dongfeng Motor Group, Shenlong Automobile Co., Ltd., headquartered in Wuhan, with Peugeot and Citroen under its two brands. In 2010, PSA established a joint venture with Changan Automobile Group, Changan Peugeot Citroen Automobile Co., Ltd., mainly responsible for the production and sales of DS brand, headquartered in Shenzhen, with the brand operation department in Shanghai.
The PSA China and South East Asia headquarters moved to Wuhan, and Dongfeng Motor to be closer at the same time, Changan Automobile may feel uneasy.
This is not the first time Changan has been "uneasy". The last "uneasy" can be traced back to March 2014. After Dongfeng Group subscribed for about 14% of PSA’s shares at a cost of 800 million euros, the industry speculated that Changan PSA would face "falling out of favor": PSA will inevitably be more inclined to Dongfeng in the quotas in the future, and Changan PSA looks more like a chicken rib.
"Shenlong’s annual production has exceeded 700,000, Changan PSA is less than 30,000, and I am afraid it will not exceed 500,000 in this lifetime." Another insider of PSA’s China and South East Asia operations department believes that although Changan PSA is not very good, PSA and Dongfeng are "like glue", and even entering Dongfeng’s arms is bound to continue to open the "distance" between PSA and Changan.
At first, PSA refused to give DS to Shenlong, and Peugeot also gave it after a long game. If the DS was given to Dongfeng, it would save a lot of costs, and Changan PSA would not become a big problem as it is now. "Learn from the public to find two partners to play the game of checks and balances, but the strength can’t keep up." The above-mentioned insiders pointed out that PSA’s vision is not long enough and its layout in China is chaotic.
According to the data, since the sales in 2013, the annual sales of Changan PSA have not been able to break through 30,000 vehicles, far from the 2014 sales 100,000 vehicles proposed at the beginning of its establishment, and the 2015 sales 200,000 target.
However, even the sales of Shenlong Automobile, which is responsible for the sales of Shenlong Automobile, are not doing well. Since the beginning of this year, the sales of Shenlong Automobile have fallen for five consecutive months compared with the same period last year. In the first five months, the cumulative sales of Shenlong Automobile fell by nearly 20%. To this end, Shenlong Automobile also made personnel adjustments. At the end of June, Qiu Xindong, the current general manager of Shenlong Automobile, was transferred back to the headquarters of Dongfeng Company, and Su Weibin replaced Qiu Xindong to work at Shenlong Automobile.
