In the last few months, Chinese electric vehicle maker WM Motor has experienced a series of upsets, such as internal salary reductions, headquarter layoffs, co-founder resignations and about 130 million yuan ($18.9 million) of assets being frozen. On February 17, the company finally issued an official response.
Regarding the rumor that “the financial department established a project without authorization”, WM Motor said that the company has always strictly abided by an office automation system, and all projects need to be established by a department first and then approved by the CEO. According to the company’s regulations, the financial department has no authority to approve a project that has a settlement worth tens of millions of yuan.
Further, the “Smart Parking” project was established in the second half of 2022 under the leadership of John Bi, CFO and executive director of WM Motor. The project was launched on August 3 last year and users can find out the current status of over 70,000 parking lots and 10 million parking spaces covering more than 100 cities across the country. Earlier, some media outlets reported that the “Smart Parking” project was pushed forward in a hasty manner, leading to an absence of orders from actual users and fake orders from scalpers.
In the statement, WM Motor affirmed the value of the “Smart Parking” project and said that, after being approved by the CEO, it set up a special team to track and analyze related data.
The third issue that WM Motor responded to was in regard to examinations and approvals. Previously, a former employee of WM Motor said that the management team of the company gave a green light to his own projects without any formal approval. The company stated that this is “subjective speculation”.
At the end of last year, WM Motor was already short of funds but at the beginning of this year, it had found a new channel to raise money. The company had planned to debut through a reverse acquisition with Hong Kong-based Apollo Smart Travel to raise about $500 million. But at present, these funds have not been received, which is the reason why the company has been undergoing some financial strain.
Recently, there have been two rounds of layoffs and salary reductions at WM Motor. First, all employees, except the general manager and other executives, will only receive 17.5% of their wages. Second, 75% of the people in various departments have been cut while the rest will be paid 70% of their wages. The plan caused an uproar within WM Motor. On February 17, many employees of the company’s Huanggang Factory gathered to defend their rights.
In view of the current predicament, WM Motor did not give too many explanations, including wages and social security, as well as severance compensation. “Exploring the smart electric car industry is a protracted war. We believe that through a series of painful optimizations and changes, we will be able to win,” the company added.