Evergrande Auto Orders Staff to Take Paid Leave until October 31st

Chinese media outlet LatePost reported on Thursday that many Evergrande Auto employees said their department has asked them to take leave after China’s seven-day National Day Holiday until October 31st.

Staff involved in R&D in Hengchi 5 and Hengchi 6, and most manufacturing staff in Shanghai and Guangzhou Nansha factory, have been asked to rotate days off.

Evergrande Auto is providing paid days-off, but many employees said that their labor contracts consist mainly of basic salary and merit pay. Staff receive wages twice a month, half paid on the 5th and the other half on 20th. The minimum payment standard of “paid leave” actually equals half of the normal salary.

In August 2019, Evergrande released its new brand “Hengchi” and commissioned external design companies to develop more than a dozen car models at the same time. Evergrande announced it had had the desire to reach a target of an annual production and sales totalling 1 million cars in 2025 and more than 5 million cars in 2035.

近两年,恒大在产业链上游大举投资并购,并经常在多个城市建厂。然而,该公司在研发方面的表现并不是很好,随着恒大集团现在发现自己资金短缺,这个问题变得更加严重。周三,恒大证实将盛京银行的 99.9 亿元人民币(15 亿美元)股权出售给沉阳盛京金融投资集团。

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A R&D staff at Evergrande Research Institute said that, in the first half of 2021, Evergrande Auto was developing six models simultaneously, but not too long ago, all projects except for the Hengchi 5 and Hengchi 6, which had seen rapid progress, were stopped. Factories in Guangzhou and Shanghai were originally planned to produce these two cars, but have now halted their preparations for production. The factory in Tianjin instead of that in Guangzhou will produce the Hengchi 5. Manufacturing staff in Shanghai and Guangzhou factories were sent to Tianjin in batches.

It is no secret that Evergrande Auto faces problems in its capital chain. On September 24th, Evergrande Auto announced that because of itsliquidity problems, the company had to delay paying its suppliers and projects for the Evergrande Health Valley and the living space supporting facilities of new energy vehicles. As a result, some projects shutdown. On the 26th, Evergrande Auto terminated its listing counselling agreement with Haitong Securities, suggesting a failure of the company being able to go public on the Shanghai Sci-Tech Innovation Board (STAR Market).