BEIJING, September 30 (TMTPOST)— As the capital chain tension continues, Evergrande’s electric vehicle unit is facing a new trouble: the brain drain. Some of departments informed to furlough till the end of October after the seven-day National Day holiday starting from beginning of the month, several employees of China Evergrande New Energy Vehicle Group Ltd. (Evergrande NEV) told Tencent’s news media outlet LatePost on Thursday.
According to these staff, those who don’t work for R&D of two SUV models Hengshi 5 and Hengchi 6 and most of production workers in two manufacturing facilities located in Shanghai and Guangzhou’s Nansha district will face furloughs by turns. Many of them said while the incoming vacation was paid as the company informed, the move is indeed a salaries reduction that would cut as much as a half since the compensation structure under the labor contract consists of the base salary and the and the performance related pay. Everyone in the office was in panic and busy in reviewing resumes for job hunting, one worker said.
Everygrande NEV has been heavily investing and launching acquisitions in upstream of the automobile industry chain since it released electric vehicle brand Hengchi in August 2019, but the R&D didn’t go very well and the persistent financial trouble has exaggerated the development obstacle.
LatePost cited a researcher that the company had six models to develop in the first half of year and recently halted four of them, only remained programs of Hengchi 5 and Hengchi 6 which saw most speedy development. It is said that facilities in Shanghai and Guangzhou which originally were scheduled for producing these two models have stopped preparation for operation, and some of outsourcing engineering staff for these models’ production have been dismissed. A person familiar with the matter said the company is more likely to transfer the planned production of Hengchi 5 in Shanghai and Guangzhou to Tianjin, which suggested it has to revamp the assembly line for the existing one was designed for an electric sedan model NEVS 93.
In a filing released last Friday with the Hong Kong stock exchange, Everygrande NEV had revealed the severe financial strain. It said it had delayed payments for suppliers and construction payments due to liquidity shortage, and some of projects had to shut down. Till that day, the company still kept contacting different potential strategic investors to introduce new funding and the relevant due diligence and discussions were underway.