Just as Dong Mingzhu, chairperson and president of China’s largest air conditioning manufacturer, Gree Electric Appliances, was steering the traditional manufacturer towards a smart home era, she was recently removed from the post of chairwoman at the manufacturer’s parent company, Zhuhai Gree Corporation.
She will retain her position as chairperson and president of Gree Electric Appliances.
Gree Electric Appliances began life in 1990 making air conditioners, but over the past few years started producing more appliances, including water heaters, refrigerators, and even smartphones. In 1996, it completed an initial public offering on the Shenzhen Stock Exchange. In 2015, it ranked among the top 500 in the Forbes Global 2000 list, and No. 1 in the household appliances industry.
Its largest shareholder, the Zhuhai Gree Corporation, is a state-owned enterprise that is supervised and administrated by local government. The appliances maker has been a profit engine for its parent company as well as for local government.
When asked about the reason for Dong’s recent removal, a local government official close to this issue said that “generally speaking, we don’t appoint the same person as chairperson of both a listed enterprise and its parent company”.
Industry players gave another explanation. They said Dong was going to hold more shares in Gree Electric Appliances, a listed company, and that would put her position as chairperson in the parent company is an obstacle.
The 62-year-old Dong, in comparison, only holds a little more than 0.7% of shares in the air condition maker.
Dong joined Gree in 1990 as a salesperson and worked for the same company ever since that time. The tough woman climbed the ladder all the way to president of Gree Electric Appliances in 2006. She took the position of chairperson in these two companies in 2012 when her predecessor retired.
The high-profile entrepreneur made great efforts to become the representative of Gree.
Dong herself endorses the company’s products and her photos appear on Gree’s print and video advertisements. She even made her photo as the boot screen for Gree smartphones.
In 2013, she made a one-billion-RMB (USD 146 million) bet with Xiaomi CEO Lei Jun over whether Xiaomi would surpass Gree in revenue over the next five years. At that time, Gree’s revenue was several times that of Xiaomi.
Over the following few years, however, Xiaomi developed quickly, while Gree went in the opposite direction. Gree’s revenue decreased 29% YoY in 2015. Dong in early 2015 told domestic media she already cancelled the attention-grabbing bet as Xiaomi entered the real estate arena.
It would be good news for Dong if she gets more shares in the company in the future.
However, local media also speculated that shareholders may be not satisfied with Dong’s integration the company with herself as an individual person, and that this is just a start for the her failure in the company, although so far Dong’s position at Gree Electric Appliances remains intact.
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(Top photo from Baidu Images)