Haier
Encyclopedia
Haier Group is a multinational
consumer electronics
and home appliance
s company headquartered in Qingdao
, Shandong
, People's Republic of China
. Its products include air conditioners, mobile phone
s, computer
s, microwave oven
s, washing machine
s, refrigerator
s, and television
s. In 2010 the Haier brand had the world's largest market share in white goods
, with 6.1 per cent.
, a refrigerator factory was built in Qingdao
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.
, the factory had debt of over CNY ¥1.4 million and suffered from dilapidated infrastructure, poor management, and lack of quality control
s, 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 was an avid reader of Western and Japanese business practices and management techniques. When he arrived in 1984, Zhang realized that the poor condition of the factory's quality controls was endangering its continued survival.
In 1985, a customer brought a faulty refrigerator back to the factory and showed it to Zhang. 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 emphasize 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.[2] 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. One of the hammers is on display at company headquarters as a reminder to posterity.
(Liebherr is the worldwide leader in premium refrigeration), entered into an joint-venture contract with Qingdao Refrigerator Co., offering technology and equipment to its Chinese counterpart. Refrigerators were to be manufactured under the name of Qingdao-Liebherr . The installation of Liebherr's equipment and technology was accompanied by a new and rigorous commitment to quality. Combined with Zhang's disciplined management techniques, which broke from the tradition of the iron rice bowl
in Chinese state-owned enterprises, the company began to turn around. 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 11,500 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. In 1988, the company assumed control of Qingdao Electroplating Company (making microwaves) and in 1991 took over Qingdao Air Conditioner Plant and Qingdao Freezer.
Having diversified its product line beyond refrigerators, the company adopted a new name in 1991. Borrowing from the German name of its partner, "Haier" came from the last two syllables of the Chinese transliteration of Liebherr
. Qingdao Haier Group was further simplified in 1992 to Haier Group, the company's current name.
The company set out to establish itself as the country's leading brand
, focusing upon reliability and product quality. Diversification would also allow Haier to spread out its risk among various product lines. In 1995 Haier bought out its chief rival in Qingdao, Red Star Electric Appliance Factory. In 1997, the company moved into television manufacturing with the acquisition of Huangshan Electronics Group. By the end of the 1990s, Haier was the most recognized brand in the country with products ranging from mobile phone
s to computer
s; it had also captured a dominant market share in its core white goods division.
in 1996, and the Philippines
and Malaysia in 1997. The company tried to compete in the Thai
market, but they completely lost to local electronics company and had to finish the marketing. Haier's move into the U.S. market was cautious at first; it focused upon two niche market
s in compact refrigerators and electric wine cellars. Both markets were underdeveloped, but Haier believed that they both had growth potential and were being largely neglected. 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. By 2002, US revenues reached USD $200 million, small when compared to its overall revenue of $7 billion, but Haier set an ambitious sales goal $1 billion and 10 percent of the US refrigerator market. Also in 2002, Haier moved into a landmark building in midtown Manhattan
. Formerly the headquarters for the Greenwich Savings Bank
, the 52000 square feet (4,831 m²) building was built in 1924 in the neo-classical style.
Haier continued its expansion into other international markets as well. Production facilities were constructed in Pakistan
in 2002 and Jordan
in 2003, greatly strengthening its position in the Middle East
market. In Africa, Haier has plants in five countries: Tunisia
, Nigeria
, Egypt
, Algeria
and South Africa
. The company also purchased a factory in Italy, as part of its continued drive into the European market. Haier has been successful in placing its products in most major European retail chains, either under its own brand or under OEM
agreements with foreign partners. Currently Haier has entered into a joint venture agreement with the government of Venezuela
and long queues to get the extremely cheap imported goods have been reported in every major Venezuelan city at the Government stores "Abastos Bicentenario".
Haier Appliances (India) P. Ltd initiated its commercial operations in January 2004. It is known for its launch of BMR technology for the first time in India followed by the Double Drive which was a patented technology. To reiterate the company’s plans to further strengthen and consolidate the brand image in India, Haier unveiled a Brand campaign titled “You Inspire Us” in the beginning of 2010. The campaign was a tribute to the wealth of knowledge that the Indian consumer possesses which has inspired many technological and innovative changes in the products to suite the consumer needs and preferences.
It was also listed among the top 20 most trusted brands in India by The Brand Trust Report
, a study conducted by Trust Research Advisory.
As of 2008, Haier has surpassed rival Whirlpool as the world's top refrigerator producer in terms of sales, according to Euromonitor, an independent business intelligence provider. Haier said it sold 12 million refrigerators worldwide last year, up 20% over the previous year. Its market share reached 6.3% globally.
" company, meaning that it is supposed to be owned by its employees. However, its actual ownership situation is opaque; the employees receive no dividends and do not know how much they own in reality. Interference from officials is also a risk for state-owned enterprises like Haier. Various levels of government often try to push their ailing companies upon successful ones, often resulting in failure; Haier was once talked into acquiring a pharmaceutical company, even though it had no prior experience or infrastructure in biotechnology
.
As a government entity, Haier was also officially barred from entering the stock exchange
early on. However, the company needed funds for its expansion and therefore sought loopholes to access private equity
. In 1993, it listed a subsidiary Qingdao Haier Refrigerator Co. on the Shanghai Stock Exchange
, raising CNY ¥370 million. 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. . Haier is also an index stock of the Dow Jones China 88 Index.
s Blackstone Group
and Bain Capital
. 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 $1.7 billion in cash and stock, or $21 per share, plus assumed debt.
19 October 2011 - Argos announces Chinese joint venture
Home Retail Group, the UK's leading home and general merchandise retailer, announces today that it has agreed to launch a joint venture company to develop a multi-channel, general merchandise retail business in China with Haier Group, one of the world's leading home appliance manufacturers.
The Argos branded joint venture operation will launch in 2012, targeted at the Shanghai region. The long-term aim is to roll out a multi-channel offer to regions throughout China, leveraging the multi-channel expertise of Home Retail Group together with Haier's extensive distribution capability in China.
Home Retail Group will have a 49% holding in the joint venture company and the remaining 51% will be held by Haier Electronics Group Co., Ltd. The Board of Directors of the joint venture company will consist of five directors with three being appointed by Haier Group and two, including the position of Chief Executive, being appointed by Home Retail Group. It is anticipated that the joint venture will require a total investment of £45m, of which Home Retail Group will provide £22m, payable in three tranches over a two-year period, subject to the satisfaction of agreed performance conditions. The first tranche, payable by Home Retail Group in 2012, will amount to £10m.
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
consumer electronics
Consumer electronics
Consumer electronics are electronic equipment intended for everyday use, most often in entertainment, communications and office productivity. Radio broadcasting in the early 20th century brought the first major consumer product, the broadcast receiver...
and home appliance
Home appliance
Home appliances are electrical/mechanical machines which accomplish some household functions, such as cooking or cleaning. Home appliances can be classified into:*Major appliances, or White goods*Small appliances, or Brown goods...
s company headquartered in Qingdao
Qingdao
' also known in the West by its postal map spelling Tsingtao, is a major city with a population of over 8.715 million in eastern Shandong province, Eastern China. Its built up area, made of 7 urban districts plus Jimo city, is home to about 4,346,000 inhabitants in 2010.It borders Yantai to the...
, Shandong
Shandong
' is a Province located on the eastern coast of the People's Republic of China. Shandong has played a major role in Chinese history from the beginning of Chinese civilization along the lower reaches of the Yellow River and served as a pivotal cultural and religious site for Taoism, Chinese...
, People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
. Its products include air conditioners, mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
s, computer
Computer
A computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...
s, microwave oven
Microwave oven
A microwave oven is a kitchen appliance that heats food by dielectric heating, using microwave radiation to heat polarized molecules within the food...
s, washing machine
Washing machine
A washing machine is a machine designed to wash laundry, such as clothing, towels and sheets...
s, refrigerator
Refrigerator
A refrigerator is a common household appliance that consists of a thermally insulated compartment and a heat pump that transfers heat from the inside of the fridge to its external environment so that the inside of the fridge is cooled to a temperature below the ambient temperature of the room...
s, and television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
s. In 2010 the Haier brand had the world's largest market share in white goods
Major appliance
A major appliance, or domestic appliance, is usually defined as a large machine which accomplishes some routine housekeeping task, which includes purposes such as cooking, or food preservation, whether in a household, institutional, commercial or industrial setting...
, with 6.1 per cent.
History
The origins of Haier date back long before the actual founding of the company. In the 1920s1920s
File:1920s decade montage.png|From left, clockwise: Third Tipperary Brigade Flying Column No. 2 under Sean Hogan during the Irish Civil War; Prohibition agents destroying barrels of alcohol in accordance to the 18th amendment, which made alcoholic beverages illegal throughout the entire decade; In...
, a refrigerator factory was built in Qingdao
Qingdao
' also known in the West by its postal map spelling Tsingtao, is a major city with a population of over 8.715 million in eastern Shandong province, Eastern China. Its built up area, made of 7 urban districts plus Jimo city, is home to about 4,346,000 inhabitants in 2010.It borders Yantai to the...
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.
Zhang Ruimin and the corporate revival
By the 1980s1980s
File:1980s decade montage.png|thumb|400px|From left, clockwise: The first Space Shuttle, Columbia, lifted off in 1981; American President Ronald Reagan and Soviet leader Mikhail Gorbachev eased tensions between the two superpowers, leading to the end of the Cold War; The Fall of the Berlin Wall in...
, the factory had debt of over CNY ¥1.4 million and suffered from dilapidated infrastructure, poor management, and lack of quality control
Quality control
Quality control, or QC for short, is a process by which entities review the quality of all factors involved in production. This approach places an emphasis on three aspects:...
s, resulting from the planned economic system
Planned economy
A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...
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
Zhang Ruimin
Zhang Ruimin is a Chinese businessman and chief executive officer of Haier Group. He is considered as one of the most influential and respected business figures in Asia for his work in turning a little-known, bankrupt refrigerator manufacturer into the world's fourth-largest white appliances...
, responsible for a number of city owned appliance companies. Zhang was appointed the managing director of the factory in 1984.
Zhang was an avid reader of Western and Japanese business practices and management techniques. When he arrived in 1984, Zhang realized that the poor condition of the factory's quality controls was endangering its continued survival.
In 1985, a customer brought a faulty refrigerator back to the factory and showed it to Zhang. 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 emphasize 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.[2] 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. One of the hammers is on display at company headquarters as a reminder to posterity.
Founding a new company
Haier had been founded as Qingdao Refrigerator Co. in 1984. With China opening up to world markets, foreign corporations began searching for partnerships in China. One of these, Germany's Liebherr GroupLiebherr
* The Liebherr Group, a German manufacturing complex established in 1949 by Hans Liebherr* Liebherr Grazer AK* Liebherr T 282B, an off- highway, ultra class, rigid frame, two- axle, diesel/electricappointed...
(Liebherr is the worldwide leader in premium refrigeration), entered into an joint-venture contract with Qingdao Refrigerator Co., offering technology and equipment to its Chinese counterpart. Refrigerators were to be manufactured under the name of Qingdao-Liebherr . The installation of Liebherr's equipment and technology was accompanied by a new and rigorous commitment to quality. Combined with Zhang's disciplined management techniques, which broke from the tradition of the iron rice bowl
Iron rice bowl
"Iron rice bowl" is a Chinese term used to refer to an occupation with guaranteed job security, as well as steady income and benefits. The Chinese term can be compared to the similar English concept of a breadwinner with cradle to grave socialism...
in Chinese state-owned enterprises, the company began to turn around. 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
1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....
by 2000; a growth of more than 11,500 percent.
With the success of Qingdao's refrigerator company, the municipal government
Municipality
A municipality is essentially an urban administrative division having corporate status and usually powers of self-government. It can also be used to mean the governing body of a municipality. A municipality is a general-purpose administrative subdivision, as opposed to a special-purpose district...
asked it to take over some of the city's other ailing appliance makers. In 1988, the company assumed control of Qingdao Electroplating Company (making microwaves) and in 1991 took over Qingdao Air Conditioner Plant and Qingdao Freezer.
The Haier brand
Liebherr
* The Liebherr Group, a German manufacturing complex established in 1949 by Hans Liebherr* Liebherr Grazer AK* Liebherr T 282B, an off- highway, ultra class, rigid frame, two- axle, diesel/electricappointed...
. Qingdao Haier Group was further simplified in 1992 to Haier Group, the company's current name.
The company set out to establish itself as the country's leading brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
, focusing upon reliability and product quality. Diversification would also allow Haier to spread out its risk among various product lines. In 1995 Haier bought out its chief rival in Qingdao, Red Star Electric Appliance Factory. In 1997, the company moved into television manufacturing with the acquisition of Huangshan Electronics Group. By the end of the 1990s, Haier was the most recognized brand in the country with products ranging from mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
s to computer
Computer
A computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...
s; 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 IndonesiaIndonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
in 1996, and the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
and Malaysia in 1997. The company tried to compete in the Thai
Thai
When used as an adjective, Thai refers to anything that originates from Thailand. As a noun it may refer to:* Thai language, a Tai-Kadai language spoken mainly in and around Thailand* Thai people, the dominant ethnic group of Thailand...
market, but they completely lost to local electronics company and had to finish the marketing. Haier's move into the U.S. market was cautious at first; it focused upon two niche market
Niche market
A niche market is the subset of the market on which a specific product is focusing; therefore the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact...
s in compact refrigerators and electric wine cellars. Both markets were underdeveloped, but Haier believed that they both had growth potential and were being largely neglected. The company's sales figures soon proved this belief correct, allowing Haier to firmly establish itself in its US niche.
Gê
Gê are the people who spoke Ge languages of the northern South American Caribbean coast and Brazil. In Brazil the Gê were found in Rio de Janeiro, Minas Gerais, Bahia, Piaui, Mato Grosso, Goias, Tocantins, Maranhão, and as far south as Paraguay....
, Whirlpool, Frigidaire
Frigidaire
Frigidaire is a brand of consumer and commercial appliances. Frigidaire was founded as the Guardian Frigerator Company in Fort Wayne, Indiana, and developed the first self-contained refrigerator in 1916. In 1918, William C...
, and Maytag
Maytag
Maytag Corporation is an American home and commercial appliance company, headquartered in Newton, Iowa, that is a division of the Whirlpool Corporation.-Company history:...
. As part of its strategy, Haier decided to build a production facility in the United States at Camden, South Carolina
Camden, South Carolina
Camden is the fourth oldest city in the U.S. state of South Carolina and is also the county seat of Kershaw County, South Carolina, United States. The population was an estimated 7,103 in 2009...
, opened in 2000. By 2002, US revenues reached USD $200 million, small when compared to its overall revenue of $7 billion, but Haier set an ambitious sales goal $1 billion and 10 percent of the US refrigerator market. Also in 2002, Haier moved into a landmark building in midtown Manhattan
Midtown Manhattan
Midtown Manhattan, or simply Midtown, is an area of Manhattan, New York City home to world-famous commercial zones such as Rockefeller Center, Broadway, and Times Square...
. Formerly the headquarters for the Greenwich Savings Bank
Greenwich Savings Bank
Greenwich Savings Bank was an American savings bank based in New York City that operated from 1833 to 1981. At the time of its closure in 1981, it was the 16th largest bank in the U.S. by total deposits.-Charter:...
, the 52000 square feet (4,831 m²) building was built in 1924 in the neo-classical style.
Haier continued its expansion into other international markets as well. Production facilities were constructed in Pakistan
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
in 2002 and Jordan
Jordan
Jordan , officially the Hashemite Kingdom of Jordan , Al-Mamlaka al-Urduniyya al-Hashemiyya) is a kingdom on the East Bank of the River Jordan. The country borders Saudi Arabia to the east and south-east, Iraq to the north-east, Syria to the north and the West Bank and Israel to the west, sharing...
in 2003, greatly strengthening its position in the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
market. In Africa, Haier has plants in five countries: Tunisia
Tunisia
Tunisia , officially the Tunisian RepublicThe long name of Tunisia in other languages used in the country is: , is the northernmost country in Africa. It is a Maghreb country and is bordered by Algeria to the west, Libya to the southeast, and the Mediterranean Sea to the north and east. Its area...
, Nigeria
Nigeria
Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
, Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
, Algeria
Algeria
Algeria , officially the People's Democratic Republic of Algeria , also formally referred to as the Democratic and Popular Republic of Algeria, is a country in the Maghreb region of Northwest Africa with Algiers as its capital.In terms of land area, it is the largest country in Africa and the Arab...
and South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
. The company also purchased a factory in Italy, as part of its continued drive into the European market. Haier has been successful in placing its products in most major European retail chains, either under its own brand or under OEM
Original Equipment Manufacturer
An original equipment manufacturer, or OEM, manufactures products or components that are purchased by a company and retailed under that purchasing company's brand name. OEM refers to the company that originally manufactured the product. When referring to automotive parts, OEM designates a...
agreements with foreign partners. Currently Haier has entered into a joint venture agreement with the government of Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
and long queues to get the extremely cheap imported goods have been reported in every major Venezuelan city at the Government stores "Abastos Bicentenario".
Haier Appliances (India) P. Ltd initiated its commercial operations in January 2004. It is known for its launch of BMR technology for the first time in India followed by the Double Drive which was a patented technology. To reiterate the company’s plans to further strengthen and consolidate the brand image in India, Haier unveiled a Brand campaign titled “You Inspire Us” in the beginning of 2010. The campaign was a tribute to the wealth of knowledge that the Indian consumer possesses which has inspired many technological and innovative changes in the products to suite the consumer needs and preferences.
It was also listed among the top 20 most trusted brands in India by The Brand Trust Report
The Brand Trust Report
The Brand Trust Report, India Study, 2011 is published by Trust Research Advisory . The book is a result of a syndicated primary research on Brand Trust that generated 10,00,000 data points and 16,000 unique brands from over 10,000 hours of fieldwork conducted in 9 cities TRA’s study partners in...
, a study conducted by Trust Research Advisory.
As of 2008, Haier has surpassed rival Whirlpool as the world's top refrigerator producer in terms of sales, according to Euromonitor, an independent business intelligence provider. Haier said it sold 12 million refrigerators worldwide last year, up 20% over the previous year. Its market share reached 6.3% globally.
Ownership structure
Although under partial public ownership, Haier is still technically a "collectiveCollective
A collective is a group of entities that share or are motivated by at least one common issue or interest, or work together on a specific project to achieve a common objective...
" company, meaning that it is supposed to be owned by its employees. However, its actual ownership situation is opaque; the employees receive no dividends and do not know how much they own in reality. Interference from officials is also a risk for state-owned enterprises like Haier. Various levels of government often try to push their ailing companies upon successful ones, often resulting in failure; Haier was once talked into acquiring a pharmaceutical company, even though it had no prior experience or infrastructure in biotechnology
Biotechnology
Biotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...
.
As a government entity, Haier was also officially barred from entering the stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
early on. However, the company needed funds for its expansion and therefore sought loopholes to access private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
. In 1993, it listed a subsidiary Qingdao Haier Refrigerator Co. on the Shanghai Stock Exchange
Shanghai Stock Exchange
The Shanghai Stock Exchange , abbreviated as 上证所/上證所 or 上交所, is a stock exchange that is based in the city of Shanghai, China. It is one of the two stock exchanges operating independently in the People's Republic of China, the other is the Shenzhen Stock Exchange...
, raising CNY ¥370 million. In 2005, Haier entered the Hong Kong Stock Exchange
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...
through a "backdoor listing" by acquiring a controlling stake in a publicly listed joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
Haier-CCT Holdings Ltd. . Haier is also an index stock of the Dow Jones China 88 Index.
Maytag bid
In June 2005, Haier made a bid to acquire Maytag Corporation, backed by private equity fundPrivate equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
s Blackstone Group
Blackstone Group
The Blackstone Group L.P. is an American-based alternative asset management and financial services company that specializes in private equity, real estate, and credit and marketable alternative investment strategies, as well as financial advisory services, such as mergers and acquisitions ,...
and Bain Capital
Bain Capital
Bain Capital LLC is a Boston-based private equity firm founded in 1984 by partners from the consulting firm Bain & Company. Originally conceived as an early-stage, growth-oriented investment fund, Bain Capital today manages approximately $65 billion in assets, and its strategies include private...
. 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
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
based Whirlpool Corporation which offered $1.7 billion in cash and stock, or $21 per share, plus assumed debt.
Home Retail Group plc
( http://www.homeretailgroup.com/home/investors/rns/rnsitem?id=4595430&t=print_rns )19 October 2011 - Argos announces Chinese joint venture
Home Retail Group, the UK's leading home and general merchandise retailer, announces today that it has agreed to launch a joint venture company to develop a multi-channel, general merchandise retail business in China with Haier Group, one of the world's leading home appliance manufacturers.
The Argos branded joint venture operation will launch in 2012, targeted at the Shanghai region. The long-term aim is to roll out a multi-channel offer to regions throughout China, leveraging the multi-channel expertise of Home Retail Group together with Haier's extensive distribution capability in China.
Home Retail Group will have a 49% holding in the joint venture company and the remaining 51% will be held by Haier Electronics Group Co., Ltd. The Board of Directors of the joint venture company will consist of five directors with three being appointed by Haier Group and two, including the position of Chief Executive, being appointed by Home Retail Group. It is anticipated that the joint venture will require a total investment of £45m, of which Home Retail Group will provide £22m, payable in three tranches over a two-year period, subject to the satisfaction of agreed performance conditions. The first tranche, payable by Home Retail Group in 2012, will amount to £10m.
See also
- General Electric Company
- Siemens AGSiemens AGSiemens AG is a German multinational conglomerate company headquartered in Munich, Germany. It is the largest Europe-based electronics and electrical engineering company....
- AB Electrolux
- Maytag Corporation
- Samsung ElectronicsSamsung ElectronicsSamsung Electronics is a South Korean multinational electronics and information technology company headquartered in Samsung Town, Seoul...