Overtime Controversy Aftermath, Chery's IPO Imminent! Forced Company Overhaul, ESG Saves Employees at Major Manufacturer

Every month and every quarter, we closely monitor the sales trends and operating conditions of each automaker, poring over one report and set of data after another with great interest. Little do we know, there is another list even more worthy of our attention—the Fortune China ESG Influence List.

Regarding this ranking list, we can clearly understand a few points by discussing the recent overtime controversy at Chery and the notice issued by the International Cooperation Department of the China Securities Regulatory Commission concerning Chery Automobile Co., Ltd.'s overseas issuance and listing as well as the "full circulation" filing of its unlisted domestic shares.

Chery's overtime controversy has had a wide impact. On the one hand, Chery Chairman Yin Tongyue apologized to employees on Saturday, July 19th, regarding the overtime issue, and expressed a commitment to "break the reliance on manpower and fatigue tactics," focusing on reforming the overtime culture. On the other hand, due to the company's requirement to work overtime on Saturdays, an employee named "Kaige" sent an email, copying it to the group's senior management, to express dissatisfaction.

The brave one who dares to eat the crab inevitably stirs up a thousand waves, and "Brother Kai" has gained the strong support of many employees.

In fact, as early as around June 2024, Sina Finance reported that a person suspected to be an employee of Chery filed a complaint, accusing Chery of "illegal overtime work." Not only was there no overtime pay, but employees working more than 3 hours overtime each day were given only a 10-yuan meal subsidy. Furthermore, to cover up the overtime work, the company even changed the employees' overtime hours in the system to 5 PM.

The news spread rapidly but did not gain widespread attention. However, the recent incident involving Chery's "Kai Ge" has had a far-reaching impact. Besides the fact that Chery's overtime culture may have long been deeply ingrained and widely detested, another reason is that while the chairman has just spoken out, other lower-level leaders blatantly ignored this and "persistently" demanded their subordinates to work overtime on Saturdays. This stark contrast has intensified the conflict even more.

Interestingly, with "Brother Kai" leaving the company, the overtime controversy at Chery came to an abrupt end. The next moment, new news arrived—Chery Automobile's Hong Kong IPO and the "full circulation" of its unlisted domestic shares have officially been registered with the China Securities Regulatory Commission, marking the final sprint in its 20-year-long pursuit of going public.

The situation is becoming increasingly surreal. Some say it's all just a coincidence, but after understanding ESG, it becomes clear that these developments are quite reasonable.

ESG stands for "Environmental, Social and Governance." For example, GAC Group is very keen on releasing ESG reports every year, and its joint venture brands even provide separate explanations regarding ESG.

For ESG, many people only focus on the first two aspects, namely environment and society. They highlight the contributions their company has made to improving the environment and the charitable efforts they have made for society, because these two areas are tangible and can be appreciated by the public, and they are somewhat related to their own interests.

However, when it comes to corporate governance, this seemingly internal "family matter" that appears unrelated to the outside world indeed attracts little attention. Even if the outside world doesn't pay much attention, the company must still do well in this aspect if it plans to go public, as there is indeed a "regulatory authority" in existence.

In February this year, when Chery submitted its IPO application, it had already disclosed ESG-related information in its prospectus. After six months, Chery has reached the final sprint stage. After a 20-year pursuit, they are just one step away from the goal. Before this, the executives must be quite sensitive, which might be why Yin Tongyue came forward to apologize for the overtime work phenomenon.

It can be said that "there is no smoke without fire." For Chery to go public, it must resolutely address and eradicate the lingering chronic issues that have persisted for many years. If such problems are not improved or thoroughly eliminated, even if it goes public, many situations unfavorable to its healthy development will arise.

In the past year or two, due to declining profits in the automotive industry, many car companies have found themselves operating at a loss and have begun to implement cost-cutting and efficiency-improving measures, resulting in large-scale layoffs. Among these, it is mostly the joint-venture brands that offer severance packages far exceeding the legal requirements. Amid the widespread praise for this, we need to reflect on why, when it comes to how we treat employees, we always seem to fall short compared to companies with foreign investment.

At the beginning of the year, there was a trending topic on Weibo — major companies like DJI and Midea forcibly required employees to get off work.

The background of the trending topic is that, according to data from the National Bureau of Statistics, the average working hours of employees in our country have been continuously increasing since 2015. The quantitative change has led to a qualitative change, and it seems to have reached a breaking point. The emergence of "mandatory off-duty" reflects the original concept of ESG.

It is noteworthy that in May this year, Chery was listed in the "2025 China ESG Impact List" released by Fortune due to its outstanding performance in the ESG field. This marks the second consecutive year that Chery has appeared on Fortune's China ESG Impact List. How do you all evaluate this?

That being said, if Chery neither submits an IPO application nor seeks to go public, will its overtime work culture improve? As for whether the answer is yes or no, probably no one can give a definite answer.