Mobile phone accessories company Fuchang collapsed
Yesterday morning, a large number of employees and suppliers gathered at the entrance of Shenzhen Fuchang Electronic Technology Co., Ltd. to launch a rights protection action.
A copy of the "Notice on the Company's Abandonment of Operations and Employee Rights and Interests Involved" issued by Fuchang Company on October 8 obtained by the Beijing News reporter shows that due to the company's involvement in the lawsuit , the bank collected loans, causing the company's capital chain to be broken. It has been decided to stop production and the company to abandon operations from now on. The "Notice" did not mention how to repay debts owed to lower-tier suppliers.
Several suppliers involved in rights protection stated that Fuchang Company is a first-tier supplier to Huawei and ZTE, and its main products are mobile phone cases. However, due to problems in the company's operations, the capital chain was broken and it owed its subordinates The supplier's money reached 400 million yuan. A reporter from the Beijing News interviewed many suppliers and learned that the amount owed to them by Fuchang Company ranged from tens of millions to hundreds of thousands, with most in the millions.
Currently, the Fuchang Company website cannot be opened. According to the Guangdong Provincial Enterprise Credit Information System, Fuchang Company is located in Longgang District, Shenzhen City. It was established in 2001 with a registered capital of 40 million yuan and its legal representative is Chen Jinjin.
Production workshop
A supplier of mold hardware accessories and other products to Fuchang Company said that Fuchang Company had previously been involved in lawsuits due to long-term arrears of funds to suppliers, which resulted in the company being in trouble with the bank. It is more difficult to obtain loans. In addition, Fuchang was recently fined 10 million by Huawei, so there is currently a problem with the capital chain.
The supplier said that not only Fuchang Company, but also many related mobile phone accessories companies in the Pearl River Delta have encountered difficulties.
The Beijing News reporter obtained an announcement issued by Dongguan Jingchi Plastic Technology Co., Ltd. to its suppliers on October 8, saying that when the manufacturing industry collapsed in 2014 and 2015, the company was also in a difficult situation. In the midst of the tide, the storm, facing bankruptcy and the inability to pay off your debt in full.
Local people said that the mobile phone equipment industry in the Pearl River Delta is very developed, with many mobile phone casing companies surrounding the two giants Huawei and ZTE. However, with the adjustment of market structure and long-term oversupply in recent years, some mid- to low-end manufacturers have been defeated in the competition, such as Fuchang Company.
In the announcement, Fuchang stated that it is currently unable to pay economic compensation to employees due to financial reasons, and hopes that employees will be compensated in accordance with the law through labor arbitration and the auction of company assets. Regarding the payment of employee wages, Fuchang said that September wages will be paid before 5 pm on the 9th, and October wages will be paid before 5 pm on the 11th.
However, many employees said that Fuchang began to default on wages in August.
Employee representatives are currently negotiating with Fuchang, hoping to obtain unemployment compensation. A person familiar with the matter said that Fuchang Electronics held a forum on appeals on the 9th and issued a notice of handling methods to employees after the meeting.
What do suppliers think?
Judging from the feedback from suppliers, Fuchang’s debt amount ranges from hundreds of thousands to several million. Previously, Fuchang had been defaulting on payments to its suppliers as if it wanted to go public, thus creating a huge pie for its suppliers.
A supplier said: "I have been talking about going public before, but some of the arrears have been delayed for more than a year or even two years. Because the cooperation cycle is relatively long, I have lowered my vigilance."
Some suppliers said that Fuchang has always cooperated with large manufacturers, so even if there are long payment periods, there are still many suppliers willing to do business with Fuchang. “In addition to long-term cooperative relationships, Fuchang Fuchang has always stated that it is seeking to go public, so everyone is not too worried about the withdrawal of funds."
Why did it go bankrupt? What do Huawei and ZTE think?
Fuchang was founded in 1997. In 2016, it is an OEM and manufacturer integrating precision plastic mold manufacturing, 3C (communications, consumer electronics, computers) and wood plastic product development, design and manufacturing. The group has 4,000 employees and is located in Shenzhen, Huizhou, Malaysia and other places. Equipped with factory.
Its main customers include Huawei, ZTE, Japan Brothers Co., Ltd., Harman International Industries of the United States, Japan's Sharp partners, and well-known domestic and foreign companies such as China Mobile, China Telecom, British Telecom, Vodafone, AT&T, and Deutsche Telekom. .
"Fuchang is a medium-sized enterprise. It is quite famous in the mobile phone supply chain and is a first-tier supplier to Huawei, ZTE and other manufacturers." A person in charge of Wingtech Communications said media said.
Logically speaking, as a medium-sized enterprise that cooperates with a large number of world-class companies, it is unlikely to fail. In addition to the malicious closure of Fuchang mentioned above, lagging behind in technological transformation may be the root cause.
In Huawei’s view, suppliers’ profit margins have decreased mainly because these companies are unwilling to carry out enterprise upgrades. Fuchang Electronics mainly produces mobile phones and plastic casings for telephones. Nowadays, mobile phone casings are mostly made of metal products, which is also the reason for their declining profits. In addition to the company's own technology failure to keep up, part of the reason is rising labor costs and meager profits, which make the operation of the mobile phone OEM and processing industries increasingly difficult.
A Huawei insider analyzed: "Huawei has been using metal casings on a large scale since last year. The market for plastic casings is getting smaller and smaller, and suppliers cannot keep up with industrial upgrades, so naturally they cannot receive orders. ”
He also said: “For these business owners, the company’s ability to make money has declined, it still owes so much foreign debt, and there is no hope for the future. They want to close down maliciously just to make some money.” . ”
However, Huawei has also taken emergency measures. Huawei stated in its reply to the media that Fuchang Electronics is a supplier of some structural parts for Huawei's mobile broadband and home products, and accounts for a small proportion of Huawei's overall procurement share. This time, Fuchang suddenly stopped production without notifying Huawei, causing losses to Huawei. Huawei has urgently switched to other suppliers and will eliminate the impact on product delivery as soon as possible.
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