【Epoch Times News, 12th December 2024】The newly established car manufacturer Leahead Auto, a collaboration between Baidu and Geely, suddenly disbanded. The Leahead headquarters was surrounded by employees demanding their salaries, while the CEO was besieged.
According to reports from Cover News, on December 12th, reporters visited Leahead Auto experience stores in Chengdu’s MixC and Yintai City and found that both stores had closed down. A salesperson at a Chengdu Leahead Auto store mentioned that on the afternoon of the 11th, they suddenly received notice that they didn’t have to work the next day, and salaries couldn’t be disbursed. At present, they are searching for new job opportunities.
Several Leahead Auto employees confirmed that salaries for November had been paid out, but the company had not contributed to the employees’ social security for that month. If employees chose to stay without pay, they would need to pay their social security themselves. Due to not wanting to work voluntarily without pay, most employees chose to leave with N+1 compensation, but whether they would actually receive the money is still uncertain.
At the Leahead Auto headquarters, CEO Xia Yiping was surrounded by numerous employees demanding solutions regarding the company’s dissolution and employee compensation. In response, Xia Yiping promised the employees, “I will not run away. I am actively working on solutions. Please give me some time.”
According to a report by Tencent’s car channel, “Far Light,” all Leahead stores nationwide have temporarily closed, car test drives are unavailable, sales staff will all resign, and the employees’ November provident fund and social security contributions have not been paid to date. An employee in the retail market named Zhao Feng (alias) revealed that according to the HR department, Leahead will retain only about 100 vehicle maintenance personnel, and all other business lines, including vehicle sales, will be dissolved, with all employees leaving by December 16th.
Based on reports from mainstream media, on the afternoon of the 11th, Xia Yiping held an internal meeting online, stating that the company was facing difficulties in operations and needed to make adjustments, without providing specific details.
After the meeting, the Leahead Auto HR department and department heads discussed with employees and presented two options. Option one was to voluntarily resign before December 16th, sign an agreement, receive compensation by February 15th, with N+1 (but no guarantee as the official response was a lack of funds); option two was to stay without pay, not contributing to social security and provident fund.
On the 11th, Xia Yiping’s “internal letter” to Leahead Auto employees was leaked online.
In the letter, Xia Yiping mentioned that Leahead would enter the era of Entrepreneurship 2.0 and implement various measures to help the company overcome its challenges. However, the letter did not provide significant additional information, merely emphasizing cost reduction and efficiency improvement.
According to information from the new media “Car News,” a Leahead store employee revealed to them that contrary to Xia Yiping’s claims of launching a 2.0 era, Leahead was facing a complete halt. The headquarters was on holiday, stores were not operating, and employees had to choose between resigning or staying without pay.
Sina Technology obtained information from Leahead’s internal staff that Xia Yiping had communicated with employee representatives on the afternoon of December 12th regarding the company’s situation.
Xia Yiping stated that before the release of the solution on the 11th, the board had a meeting where a consensus on issues like employee social security was not reached. The decision was only made after the board’s decision, not something he could decide on his own. “I said I could use some money to solve the employee social security issue, but neither shareholder stepped up.”
He mentioned that he was the company’s CEO but only a small shareholder. He had decision-making power in business matters but not in the company’s overall development. The company’s 80% voting rights belonged to Baidu. Recently, Baidu had conducted a comprehensive audit on the company without any issues.
Xia Yiping also revealed the latest progress in communication with shareholders. The shareholders were willing to bear the compensation for employees leaving, but the specific plan required further discussion with shareholders and the HR department. He would do his best to resolve the social security issues for employees but needed to discuss how to proceed with the board.
Public information indicates that Leahead was previously known as Jidu Auto, established jointly by Baidu and Geely in January 2021. In October 2023, Leahead’s first car, the Leahead 01, a pure electric SUV, was officially launched, priced from 249,900 to 339,900 yuan. In September 2024, the second car, Leahead 07, a pure electric sedan, was launched with a discounted price ranging from 199,900 to 289,900 yuan. According to previous disclosures from Leahead, the company had delivered over 14,000 vehicles in the first 11 months of the year, averaging approximately 1,300 vehicles sold per month.
Competition in the Chinese electric vehicle industry is becoming increasingly intense. On November 25th, Li Bin, the founder, chairman, and CEO of NIO, stated in an internal letter on the company’s tenth anniversary that the most intense and brutal stage of the smart electric vehicle industry qualification race had arrived, and only a few outstanding companies could survive.