Financial crisis forced out Tangshan Iron and Steel miracle

In eight months, for expectant mothers, it takes only two months to complete one baby; for a college student, it takes three years and four months to complete the studies. For a company, it may not be enough to complete. A big project negotiation.

For the same eight months, Tang Steel, an old steel mill with a history of nearly 70 years, has created a miracle: Tang Gang has not only completed the entire transformation of its own factory area, but also turned its old factory building into a modern garden. The factory, and more importantly, Tangsteel not only changed the external appearance, but also significantly strengthened the internal competitiveness of the company. The management level of the company also greatly improved in the contrarian.

"We cannot just call speed or miracles. We just did what a state-owned steel company should do," said Yu Yong, chairman and general manager of Hebei Iron and Steel Group Tangshan Iron and Steel Company. In his opinion, because he was guarding a “responsibility to the company”, he and all the Tangsteel employees did what they should do at the right time, and nothing more.

“No salary reduction, no layoffs” “Tang Gang’s transition should be thanks to the financial crisis because it was the crisis that magnified the deepest contradictions in the steel industry and forced us to make a transition.” Yu Yong told reporters.

Tang Gang is an old steel company that was founded in 1943. In June 2008, the joint group of Tangshan Iron and Steel Group and Hebei Iron and Steel Group was established as the Hebei Iron and Steel Group, which currently has more than 30,000 employees. In recent years, Tangshan Iron & Steel has continuously expanded its production scale and entered the ranks of large-scale steel enterprises with a capacity of 10 million tons in 2005.

Due to the rapid development of the industry and the buzz of the steel market, the company has overshadowed the problems of heavy-duty development, extensive growth, high energy consumption, high emissions, and high pollution. Like most of the state-owned steel mills, Tang Steel has been slowed by changes in its operations and management.

In 2008, when the financial crisis struck, less than a month before and after the time, the Chinese steel industry experienced a “cold fire and two heavy days.” Downstream steel demand continued to decline, steel prices continued to bearish, resulting in a substantial decline in the profits of all steel companies. Not only that, under the backdrop of the global economic depression, Shougang, Shandong Iron and Steel and Anyang Iron & Steel successively announced a 20% reduction in output, and Shagang, Maanshan Iron and Taigang respectively reduced production by 70,000 tons, 60,000 tons and 130,000 tons. Some of Wugang's plants are also Start maintenance and repair.

Tang Gang suffered the most serious crisis since its establishment. According to statistics, at that time, more than 50% of the iron and steel enterprises in Tangshan City were in semi-discontinued state.

Not only that, in the short span of a month, the price of steel fell from 6,000 yuan per ton to less than 3,000 yuan. The extreme surplus of steel production capacity, the steel market has shrunk severely, and steel prices have fallen sharply. Within a few months, steel has gone from the original frantic buying to nobody's interest. Many traders are guarding the steel piled up into mountains, losing all their money. . The overwhelming influence of the entire steel industry directly affected the survival and development of Tang Steel. At the same time, environmental pressure has increasingly become a bottleneck restricting the survival and development of steel companies.

It was only three months before Yu Yong took over as chairman.

"What should Tang Steel do?" At this time, as the helmsman of Tang Gang, everyone is waiting for Yu Yong's reaction. For Tangshan Iron and Steel, downsizing, salary cuts, and stoppages are inevitable.

However, Yu Yong unexpectedly gave the “three noes” policy of not reducing salary, reducing production, and reducing staff. In order to make the employees feel relieved and under tremendous pressure, Yu Yong made a decision and raised 300 million yuan to increase capital for the employees. The proportion of capital increase reached 25%, and 120 million yuan was invested to improve the level of welfare for employees.

At that time, this bold decision was full of doubts from many people. Some middle-level leaders believe that corporate funds are so tight that they should use money to buy raw materials in difficult times. How can they raise their salaries?

An employee of Tangang Steel told the “Economic Information Daily” reporter that by November 2008, when the impact of the financial crisis was most fierce, Tang Gang not only did not reduce their salaries, but instead escalated their salaries, and everyone’s cohesion was stronger. In this way, in return for the 40,000 employees of Tangshan Iron & Steel, a total of 3.025 billion yuan worth of efficiency was achieved in the year-end record at the end of 2009.

When the reporter once again mentioned this issue to Yu Yong, he never liked to show up. He just smiled. After seeing the reporter still want to ask, he only replied: “Tang Gang will not transfer this market pressure to the employees, and the market will not be difficult. It will not disguise the pockets of the employees.”

Move or change? Many of Tang Steel’s employees will say in private that the transformation of Tang Gang needs to be thankful to the general public.

Time again fell back to the financial crisis. In the joint efforts of employees of Tangshan Iron and Steel Co., Ltd., through the cost reduction and efficiency increase, when the factory's operating conditions gradually improved, Tang Gang also received a death order from Tangshan City. If the pollution is not resolved, it must be removed from Tangshan City.

This news for Tang Gang is undoubtedly a clear-cut incident. Tang Gang at this time was forced into a dilemma.

It now appears that the decision of the Tangshan City Government at that time was by no means "unreasonable." In people's minds, the image of the steel mills is that the smoke is thick and the steel is splattered. The workers work in the upper part of the body with sweat. The factory area is messy and the pollution is serious. Indeed, Tang Gang at that time was such an image. Tangshan Iron & Steel is located in Tangshan City. As the pace of city cleanliness is accelerated, a highly polluting steel mill will inevitably add a layer of gray to Tangshan City, which is building the image of New Tangshan. It is precisely to solve this large pollution. Tangshan Municipal Government ordered Tang Steel to relocate.

But for Tang Gang, the relocation of steel mills is by no means a simple matter. Yu Yong calculated an account for the reporter. In order not to pollute the city, Tang Gang could only move to the sea far away from the city. However, only a relocation fee would cost 16 billion yuan. “An equally important reason is that if steel plants can be contaminated by moving to the beach, relocation is not the only option.” Yu Yong said.

After many rounds of discussions and discussions, Yu Yong made a bold decision once again -- "Comprehensively renovate the new Tangshan Steel." He believes that relocation is by no means a permanent solution. Tangshan Steel's pollution is not resolved in one day and it is relocated. The fate will repeat itself again.

The crisis made Tang Gang people truly aware of their environment, and it was precisely through the crisis that Yu Yong got the response of all employees.

In August 2008, Tang Steel kicked off the prelude to a major transformation. Three 450 cubic meter blast furnaces were demolished, 18 buildings were demolished, 517 were planned for construction, and 157 small construction teams were removed from the factory. More than 70 small canteens, small bathrooms, and small carports were removed. Demolition of the total building area of ​​330,000 m2, vacated 500,000 m2, accounting for 1/5 of the total area of ​​the Tangshan Steel Plant.

At the same time, Tangshan Iron and Steel invested 50 million yuan in the demolition of illegally built vacant regional planning and construction of a total area of ​​more than 10,000 square meters of four service areas, five parking lots. After being put into use in mid-December 2008, the old life service facilities have been eliminated one after another, and the staff has achieved centralized and standardized management of dining, changing clothes, bathing, washing and parking.

"The most difficult thing to change is actually the concept of people." This is the deepest sentence Yu Yong felt.

Recalling the period of transition, he admitted to reporters that the transformation of old state-owned enterprises is not easy, especially people's thinking.

On January 1, 2009, Tang Gang formally implemented the access control system. The evacuation tools of tens of thousands of employees were parked in the parking lot, and employees punched cards to enter the factory. It was originally possible to go directly to the bicycle and drove directly to the workers at the entrance of the workshop. Now it is only possible to park the car in the parking lot and take the commuter car in the factory to the workshop.

The access control system not only resulted in the reduction of a large number of vehicles, but also eradicated the long-standing drawbacks, blocked the loopholes in the loss of materials, and surprisingly brought in tens of tons of scraps that were added daily. Yu Yong introduced that the planning and governance of the Tangshan Iron and Steel Plant cost RMB 300 million, but fine management has been achieved through the reengineering of business processes, and the investment in plant management has been recovered in one year.

In this way, in just 8 months, Tang Gang completely changed its appearance, from a state-owned state-owned steel plant into a large garden area without any fugitive leakage, a clean and tidy plant area, flat roads, and roads. The greenery and the well-trimmed shrubs that form the edges have become an inseparable view of Tang Steel.