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Date: 2013-07-31

About Reorganization among Chinese Bearing Enterprises

I. Which Role Should the Local Government Play in Reorganization?

From the LYC-YCEG reorganization to XAB-TSB, local government always play the most important role. Is this the role that local government should play?

Let's take the latest XAB-TSB for example. In that reorganization, Xiangfan government play a determinant role. Without the government's intervene, the XAB's reorganization will still be suspended. However, there existed some opposite viewpoint. Someone said that local government should behave themselves as an assistant but the director in the state-run enterprises' reorganization or investment attracting programs. In past, there were so many failure examples that being led by local government whose original intention is good.

Therefore, which role local government should play in the state-run enterprises' reorganization is still a problem that need to be solved.


II. Reorganization -- Trend of Chinese Bearing Enterprises?

In recent years, reorganizations among Chinese bearing enterprises have never stopped. For example, C&U with Hangzhou Bearing, Wanxiang with Huainan Bearing Plant, Zhejiang Tianma Bearing with Chengdu Bearing Plant, LYC with YCEG, TSB with XAB etc. From the above examples, we can see that more and more bearing enterprises got involved in the reorganizations. Furthermore, industry, geography and enterprise scale are no longer the barriers that restrict the reorganizations.

In fact, reorganization have been proved to be the only road for Chinese bearing industry several years ago. In that reorganization will narrow the gap between us and foreign powers in enterprise's organization.

Statistically, China have over 2000 bearing enterprises, 900 of which have annual sales exceeding 5million yuan. However, output of the major 5 Chinese bearing enterprises only take up 20% of the total, which is much more less than foreign bearing powers. In Germany, output of the 3 major bearing enterprises take up 90% of the total; Janpan's 4 major enterprises take up 88%; American's 4 major take up 56%.

Knowing from some informal source, HRB, ZWZ and other bearing enterprises located in Southeast China will do something to respond to the reorganization trend in near future.


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