Geely Volvo merger under the new four automotive changes｜Editorials

How is New Gevo anti-fragile?

To date, Geely Holdings has acquired Volvo for ten years. Through the development of these years and the **** win achieved by all parties, perhaps, has provided us with a sample of a company from fragile to strong. So, being in the automotive industry's new four transition period, Volvo and Geely's restructuring, and how to realize the step towards anti-fragility?

August 2, 2010, Geely successfully delivered 100% stake in Volvo Cars

In a previous article, "Geely Volvo restructuring: find money to save money, in order to earn money tomorrow", the Routing Agency has mentioned that the restructuring of Volvo and Geely is in line with the trend of the auto industry. Similarly, there is the merger of PSA and FCA last year. But it is important to note that the restructuring of Volvo and Geely, and the merger of PSA and FCA, as well as any other known alliance between car companies, are very different in nature and require us to look at them from a new perspective, with a new cognitive framework to define.

If PSA and FCA "marriage", is the merger of like with like, at best 1 +1 = 2. Then, the temperament of Volvo and Geely reorganization, or will occur qualitative fission, resulting in a 1 +1 & gt; 2 effect. Routledge believes that the key factor in the anti-vulnerability of the new group of Gevo, also comes from this.

In Antifragile, Taleb makes an important point: the use of a barbell strategy is the key to dealing with "black swan" events. What is a barbell strategy? It means that in the face of uncertain risk, the most prudent and the most "speculative" approaches in a system are taken simultaneously, without taking a middle course. As a result, a company can both survive and turn a small probability risk into an opportunity.

The restructuring of Volvo and Geely is an excellent example of the barbell strategy.

As we have seen, in the face of the uncertainty of the new four examination questions, Volvo's performance has always been very positive - for example, in electrification, Volvo made a commitment to achieve full electrification of products in 2025; in the field of automated driving, Volvo is the earliest with Uber driverless department to reach cooperation; in the field of automated driving, Volvo is the earliest with Uber driverless department to reach cooperation with the car company. In the field of automatic driving, Volvo is the first car company to reach cooperation with Uber driverless department; in the intelligent network, Volvo's Polaris 2, and is the world's first use of native Android in-vehicle system models, and so on.

Volvo Cars' new Asia-Pacific headquarters has the ability to design and develop independently

There are many more examples, reflecting the fact that Volvo is a car company that prefers and excels at embracing uncertainty.

Geely, by contrast, is solid. The best example of this is that while many domestic automakers are betting on all-electric vehicles, Geely is sticking to a diversified approach to new energy technologies, with fuel, hybrid, electric, and even biofuel models in the pipeline.

If Volvo and Geely had remained separate, they would have had to discount their respective strategies in order to hedge their bets. But a Volvo-Geely restructuring would make things different - by maximizing adherence to their respective aggressiveness and robustness, respectively, according to the barbell strategy, Volvo and Geely would be able to maximize their hedges against the risk of more uncertainty in the future.

Router believes that the reorganization of Volvo and Geely makes such a deeper division of labor possible -- with Volvo's role as the new group's "vanguard" becoming even more prominent, and it becoming even more centrally focused on taking on the new group's responsibility for Volvo will play a more prominent role as the "pioneer" of the new group, focusing more on the new group's function of exploring the future (especially the development and application of innovative technologies); the former Geely system will play more of a "ballast" role, helping the new group to cope with the long transition cycle of the automotive industry through a relatively robust style and a more diversified brand matrix and business scope.

Of course, the reorganization will be long and challenging - some important functions will be redistributed between Volvo and Geely, and both companies will have to build more flexible hardware platforms while maintaining a certain degree of brand differentiation, while the technology and data centers that are popular with Internet companies may also be found in Geely. The platform, perhaps, will also appear in the new group of Gevo.

According to previous information obtained from Geely by Roadshow, Li Shufu has invited Hanken? Samuelson to lead the new company once it is established. The exact management structure of the new company has not yet been decided, and Hanken will make suggestions on the management structure based on business needs. The assets of Geely and Volvo Cars' four brands: Geely, Volvo, Link (80%) and Polaris (50%) will all be injected into the reorganized new company, and the restructuring plan will be arranged accordingly.

It goes without saying that the complementary attributes of Volvo and Geely, especially the deep experience of communication and collaboration established between the two companies over the past decade in terms of platform ****sharing, business investment, etc., will make their reorganization face fewer obstacles than those faced by other car companies. The restructuring of Volvo and Geely is essentially an optimized allocation of resources without subversion of their respective development styles, thus forming an effective hedge against the risk of uncertainty.

Entrepreneurs help 'anti-fragility'

"An entrepreneur is a person who dares to take risks and responsibilities, and starts and leads a business."?

French economist Jean-Pierre Say's widely accepted definition of an "entrepreneur" points to the characteristics of an entrepreneur who takes volatility and risk, embraces uncertainty and takes responsibility for it. This is particularly evident in entrepreneurs who have created a business.

Referring to the value of entrepreneurial activity to economic growth and social evolution, Nassim? Taleb writes, "Entrepreneurship is all about a high-risk, heroic activity that is critical to economic growth, or even just survival." He also argues that entrepreneurs who take risks and make sacrifices for the sake of global economic growth and lifting others out of poverty are the source of antifragility in the entire economic system.

In Silicon Valley and the IT industry, which embraces innovation and individuality, there is a widespread epidemic of entrepreneurs who contribute to the antifragility of society as a whole. And the founders of a business often mark the genes, outlook, and values of that business. Just as Steve? Jobs defined Apple, Larry? Page and Sergey? Brin*** shaped Google, and Musk, who played the role of traditional automobile "disruptor", also defined Tesla.

However, by the industrial chain is long, complex organizational system, shareholder dispersion or state-owned assets dominated by a number of factors, such entrepreneurs and business character of each other, directly for the social vulnerability of the phenomenon of assisting the automotive industry, but not very common. In addition to "Iron Man" Musk, "cattle rancher" Li Shufu may be another exception.

Ovid, the ancient Roman poet, said that difficulty awakens genius. And in the face of difficult challenges, the great energy released by doing everything possible, the achievement of innovation.

Ovid's words also apply to entrepreneur Li Shufu. In retrospect, Geely Li Shufu entrepreneurial 40 years, but also a fluctuating, random strain process. For all the fluctuations and pressures of the external environment, Li Shufu's attitude is not to complain about disillusionment, but every time to show unremitting struggle and unceasing passion.

In 2018, in an autobiography titled "I am very willing to be a cow", Li Shufu very rarely talked about his six times of entrepreneurship.

In this 10,000-word article, in addition to saluting the opportunities of the times provided by the 40 years of reform and opening up, it is not difficult to read Li Shufu's entrepreneurial spirit as a first-generation entrepreneur of the wickerwork, the more frustrated, the more courageous, and a keen sense of business sense, inexhaustible entrepreneurial motivation, and also in the face of competition and transformation, the struggle and growth, resilience and flexibility shown.

Of course, in addition to this entrepreneurial spirit of indomitable and struggle, more reflective of entrepreneur Li Shufu's entrepreneurial thinking and business philosophy, or the following two paragraphs:

"I learned from the practice of cattle from some of the reasoning, and cattle communication, although it is difficult to use the way to play the zither to work, but the way to play the zither, as long as the method is appropriate, the attitude is sincere. As long as the method is proper and the attitude is sincere, effective communication will be realized. For example, during the day to feed the cattle well, but also for the cattle at night to drive away mosquitoes, which all need to have the right method to make the cattle satisfied".

"People and cows can work well together, why can't people be honest with each other? I am very willing to be a cow, because as long as there is grass to eat, I will be very happy; I am very willing to be a cow, because what the cow eats in is grass, and what it milks out is milk, it is very valuable to contribute a sense of value; I am very willing to be a cow, because the cow can plough the land for the farmers, and bring happiness to the farmers, and it is very accomplished; I am very willing to be a cow, because the cow is very honest, and it doesn't flake out, and it is very respected; I am very willing to be a cow, because the cow is always helped to hold its nose and won't go in the wrong direction."

"Cattle prodigy" Li Shufu six entrepreneurial beginnings, walking the streets to take pictures

"Cattle prodigy" Li Shufu's this set of "do cattle theory"

The most famous Japanese entrepreneur of our time after the "God of Management" Konosuke Matsushita, not only with the passion of the wall, founded Kyocera and the second Telecom, the world's two Fortune 500 companies, but also in the retirement of the age of 80 years old, took the helm of the once-bankrupt Nikko, just 424 days to help In just 424 days, he helped turn Nikko into a profitable company. In addition to firmly grasp the essence of business is "the return of altruism", but also in his always burning soul and dedication to the spirit of altruism.

Returning to the process of a startup overcoming difficulties, completing the hardening process, and thus obtaining the anti-vulnerability, how much of a helping hand can a generation of entrepreneurs play?

"Geely's history of development is the history of innovation, entrepreneurship, bold practice, continuous transformation and upgrading of the history of growth, is the history of the struggle to continue to bring a sense of access to users." Yuan Xiaolin, Senior Vice President of Volvo Car Group and President and CEO of Volvo Cars Asia Pacific, summarized in an interview.

Li Shufu visited Volvo Asia Pacific and posed for a group photo with the company's management

At the same time, he further pointed out that Li Shufu, a "great entrepreneur," has the same vision, mindset, and ability to learn as one of the key driving forces behind the decade-long transformation of Volvo Cars since its acquisition by Geely in 2009. One of the important driving forces. "From a sales company with only 188 people 10 years ago, to a complete system with more than 9,000 employees, covering almost the entire automotive business chain, and with leadership and dominance in product areas, Volvo has evolved from a European company originating in Sweden to a truly global company."

In the article "I'd love to be a cow", Li Shufu mentioned that "the automotive industry is a global industry, the king of manufacturing, and the twenty-first century is the century of technological revolution, industrial change, and business reshaping", and that "automobiles will surely be electrified, intelligent, and will surely become a smart space mobile terminal, will certainly help the owner to solve more difficulties and problems", "in the global economic integration today, cross-cultural integration, cross-regional cooperation, cross-industry synergy, are the reality that the business community must face, as long as it is conducive to the user experience, as long as it can achieve cooperation **** win, what mode can be discussed. "

From the above, Li Shufu not only made a prediction of the trend of change in the automobile industry in the 21st century, but also put forward the self-cognition and recognition of Geely's entrepreneurial mission, as well as open thinking and methodology to cope with the trend of change and cross-border integration. It is not difficult to foresee that the new Geely Group, which is under Li Shufu's planning, will probably become a new case of transfer and transition from toughness to anti-fragility.

Conclusion:

On the mechanisms and necessary conditions for the emergence of antifragility, Taleb also reveals a central illusion in life, "namely, the belief that randomness is risky and a bad thing, and that by eliminating randomness, you eliminate risk." In response, he offers a corresponding insight, that stressors are also sources of information, and are extremely necessary for the emergence of antifragility, and that "an antifragile system that is in dire need of stress will instead become more fragile if it lacks stressors for a long period of time."

From the perspective of this intrinsic mechanism, looking back at Geely's rapid growth in recent years and Li Shufu's perfect reversal, in addition to benefiting from the dividends of the domestic market, their own sensitivity to opportunities and grasp, as well as entrepreneurs, the entrepreneurial struggle, another dimension of the action can not be ignored.

Since the acquisition of Volvo Cars in 2010, and since then a series of expansion initiatives, including the acquisition of Malaysia Proton, Lutus, the United Kingdom manganese copper, successive shareholdings in Daimler, and Mercedes-Benz joint venture SMART Global, all show that this private automotive enterprises to the pressure source of the openness and embrace the attitude. The motion to reorganize and list the new JIVO is undoubtedly also a manifestation of this anti-vulnerability character, the continuation of the initiative to embrace the source of pressure.

Taleb also believes that "the more volatility you see in a system, in fact, the less likely it is to encounter a 'black swan' event". At present, the epidemic "black swan" impact has not subsided, the car market had to encounter the reality of the predicament and the double pressure of the industry changes, in a sense, this is the automotive industry is facing multiple volatility, not a good thing.

At this point, reviewing and evaluating Tesla, the new Gevo, and even the entire automotive industry from the perspective of antifragility may be the greatest revelation for the industry to reacquaint itself with risk and volatility, and optimistically embrace uncertainty.

This article comes from the author of the automobile home car family number, does not represent the views of the automobile home position.