The Study On The Transformation And Upgrading Of Huayuan Laidong Company

Manufacturing industry is the basic of our country. Since the reform andopening up, it has provided a crucial support to our state economic growth andemployment, and at the same time it is developing rapidly. But it still exists theproblems of backward technology, low level equipment, week management andlow value-added products. As the slow growth of China economy, increased laborcost and declining competiveness, its transformation and upgrading is urgent.This paper takes Shandong Huayuan Laidong Engine Co., Ltd (hereinaftercalled Huayuan Laidong) as the study object，pointed out the main problemsexisted in the company using relevant theories of transformation and upgrading.As China’s agricultural machinery and truck industry is developing with largescale, collectivize, vertical integration, engine as the key component is paid moreattention, most companies are producing engines by introducing new technology,joint venture or sole proprietorship. As an engine manufacturer, HuayuanLaidong is short of the support of big auto and agricultural machinery groups, ithas no static market; Its main products single cylinder engines which weredeveloped in mid1960s, and multi-cylinder engines which are developed in early1990s, their dynamic and economical performances are not so perfect although byso many years improving, which can’t meet the national emission regulations,fuel consumption standard and the industry development. It’s hard to produceadvanced engines without advanced technological equipment, intelligent controland automatic testing equipment. Also Huayuan Laidong was born of astate-owned enterprise, with heavy historic burden, rigid marketing mechanism, extensive management, low labor productivity, which is difficult to meet thedemand of modern market competition. On this basis, finding the directions,paths and methods of transformation and upgrading for Huayuan Laidong asfollows: base on the competitive environment and resources natural endowmentsto take differentiated competitive tactics and make market segment as itsadvantages; to make engines meeting state standard and market competitionthrough self development, cooperative development and joint venture; to realizethe upgrading of equipment, raise transform capitals for making advancedengines by entering industrial park from the city and differential land rent; torealize the management upgrade from the extensive to the lean by introducingnew management system, new management ideas and management measures;to realize multi-element stock rights and modern operation mechanism by staffstocks holding and introducing strategic investors.Here taking Huayuan Laidong, a traditional manufacturer as a study objecthas an important theoretical and practical significance to promote the traditionalindustry transforming and new industry fostering.