Haier
As of 2008, Haier is the third-largest white goods manufacturer in the world. Haier Group reported sales of over $15.4 billion across all divisions in 2006.
History
Haier's history begins long before the actual founding of the company, in 1920's Qingdao where a refrigerator factory was built to supply the Chinese market.
After the 1949 establishment of the People's Republic of China, Haier was then taken over and turned into a state-owned enterprise. By the 1980s, the factory was in debt for over CNY ¥1.4 million and suffered from dilapidated infrastructure, poor management, and lack of quality controls; resulting from the planned economic system and relevant policies.
Production had slowed to a trickle, rarely surpassing 80 refrigerators a month, and the factory was close to bankruptcy. In desperation, the Qingdao government turned to a young assistant city-manager, Zhang Ruimin, responsible for a number of city owned appliance companies.
Zhang was appointed the managing director of the factory in 1984.
Zhang Ruimin and the corporate legend
Zhang was an avid reader who had studied Western and Japanese business practices and management techniques. Zhang and the customer then went through his entire inventory of 400 refrigerators looking for a replacement.
In the process he discovered that there was a 20 percent failure rate in his merchandise. To drive home the importance of product quality, Zhang had the 76 dud refrigerators lined up on the factory floor.
He then distributed sledgehammers to the employees and ordered them to destroy the refrigerators. The workers were hesitant; the cost of a refrigerator at the time was about 2 years worth of wages. Seeing their distress, Zhang said: "Destroy them! If we pass these 76 refrigerators for sale, we'll be continuing a mistake that has all but bankrupted our company." The refrigerators were smashed to pieces.
With China opening up to world markets, foreign corporations began searching for partnerships in China. Refrigerators were to be manufactured under the name of Qingdao-Liebherr (traditional Chinese: 青島-利勃海爾; simplified Chinese: 青岛—利勃海尔; pinyin: Qingdao-Libohaier).
By 1986, Qingdao Refrigerator had returned to profitability and sales growth averaged 83 percent per year. With sales of just CNY ¥3.5 million in 1984, sales rocketed to CNY ¥40.5 billion by 2000; a growth of more than 1,150,000 percent.
With the success of Qingdao's refrigerator company, the municipal government asked it to take over some of the city's other ailing appliance makers.
So, in 1995 Haier bought out its chief rival in Qingdao, Red Star Electric Appliance Factory. By the end of the 1990s, Haier was the most recognized brand in the country with products ranging from mobile phones to computers; it had also captured a dominant market share in its core white goods division.
International expansion
Its place in the domestic market secure, Haier moved onto the international stage with the goal of building a global brand name.
The company opened a production facility in Indonesia in 1996, and the Philippines and Malaysia in 1997. The company's sales figures soon proved this belief correct, allowing Haier to firmly establish itself in its US niche.
With this success, Haier looked to make further inroads in the North American market by moving into the full-sized refrigerator category.
This would bring it into direct competition with established American giants: GE, Whirlpool, Frigidaire, and Maytag. As part of its strategy, Haier decided to build a production facility in the United States at Camden, South Carolina, opened in 2000.
Ownership structure
Although under partial public ownership, Haier is still technically a "collective" company, meaning that it is supposed to be owned by its employees. In 2005, Haier entered the Hong Kong Stock Exchange through a "backdoor listing" by acquiring a controlling stake in a publicly listed joint venture Haier-CCT Holdings Ltd.
The bid was for USD $1.28 billion, or $16 per share, topping a previous offer of $14 per share made by Ripplewood Holdings. In the end however, Maytag was bought by Michigan based Whirlpool Corporation which offered $1.6 billion in cash and stock, or $20 per share, plus assumed debt.
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