Author |Zhen Yao.
Edit |Li Guozheng.
Produced by |Bangning Studio (GBNGZS).
On January 29, Bangning Studio obtained the "Open Letter to All Colleagues of Leapmotor" written by Wu Baojun. This is the last letter he wrote as the co-founder, director, and president of Leapmotor, and the payment was made on December 29, 2023. "Today happens to be my birthday, and looking back, I am filled with emotion. In the letter, Wu Baojun recalled his time at Leapmotor and said that "he and all Leapmotor people have experienced many hardships and obstacles, but they are also chasing dreams and the future in sweat." 
Screenshot of the open letter sectionThis letter brought to the surface the details of Wu Baojun's grievances with Leapmotor. Previously, Leapmotor and Wu Baojun successively issued documents in response to the resignation. On January 24, Leapmotor issued a statement stating that the labor contract between Wu Baojun and Leapmotor will expire and terminate on January 8, 2024, and the company will not renew the employment after a resolution of the board of directors. 
Unfortunately, I had to leave the Leapmotor that I co-founded, and I love the Leapmotor business very much, but due to the expiration of the labor contract, the company proposed not to renew the contract. On January 25, Wu Baojun said on his personal Weibo. Currently, the content has been removed. What exactly happened between the two sides? Bangning Studio tried to contact Leapmotor, but as of press time, there was no reply from the other party, Wu Baojun's reply was "I'm sorry, it's inconvenient for me to pick up **" In response to Wu Baojun's resignation, although Leapmotor and Wu Baojun himself have publicly stated their positions, there are many controversies and speculations on the Internet. For example, the cooperation between Wu Baojun and Leapmotor was not smooth, and the two sides had differences in business philosophy and development strategy. Wu Baojun's demand for a huge breakup fee became one of the key factors in the inability of the two parties to reach an agreement. Speculation in the industry is mainly in 4 aspects. First, did Wu Baojun voluntarily resign or was kicked out? Leapmotor stated that the company would not renew the contract, while Wu Baojun said that "the company proposed not to renew the contract". The two sides have slightly different statements. What is certain is that Wu Baojun's resignation was first due to the expiration of the contract and not being renewed. However, it can be felt from Wu Baojun's words that he wants to renew the contract, but Zero Run doesn't want him. 
Second, why is Wu Baojun marginalized? Prior to joining Leapmotor, Mr. Wu worked for various companies such as GAC Honda, Peugeot Automobile, GAC Toyota, and Zhongcheng Auto Insurance, and has nearly 30 years of management and marketing experience in the automotive industry. In May 2020, Wu Baojun joined Leapmotor as the co-founder and president of Zhejiang Leapmotor Technology, responsible for the business development, marketing, manufacturing and chain work of Leapmotor. According to the financial report of Leapmotor, as of December 31, 2022, Wu Baojun is still the executive director and president of the group, responsible for the development, marketing, manufacturing and ** of the group. Changes are in 2023. This year, the senior management team of Leapmotor has undergone a series of major changes, which have had a significant impact on Wu Baojun's role within Leapmotor. 
Key executives announced on Leapmotor's official website (January 29, 2024).In July 2022, Xu Jun, who has a background in the "Huawei department", joined Leaprun, and he has held several senior positions in Huawei Technologies***. He led a group of "Huawei" talents to join Leaprun, among which the highest-ranking is Zhang Weili, the chief marketing officer. In January 2023, Leapmotor launched its largest adjustment since its listing. Jun Xu has been appointed Senior Vice President and Chief Operating Officer, responsible for Sales and Service. Weili Zhang has been appointed Senior Vice President and Chief Marketing Officer, responsible for marketing and user operations. This adjustment is regarded by the outside world as the reuse of the "Huawei system". Many people believe that Wu Baojun's resignation is not unrelated to the two "Huawei" executives mentioned above. In the past year, Wu Baojun has been mainly responsible for strategic development and public affairs. Leapmotor said in a statement. The statement did not mention a word about Wu Baojun's merits and hard work, and also emphasized that "in the past year", which means that as early as the beginning of 2023, Leaprun has marginalized Wu Baojun, and will only wait for the contract to expire and then break up. Third, what is Wu Baojun's salary and equity? 
2022 Leapmotor financial reportAccording to the public financial report of Leapmotor, Wu Baojun's annual salary in 2022 will be 438230,000 yuan, of which 333 are wages and salaries40,000 yuan, share payment 391160,000 yuan. There should be no problem with the former, and the latter, that is, whether the share payment is paid or not, has become the focus of this resignation turmoil. In addition, according to the information disclosed in Leapmotor's financial report, as of December 31, 2022, Wu Baojun's shares were 128060,000 shares, accounting for 1 of the total share capital12%。
2022 Leapmotor financial reportWu Baojun wrote in the open letter: I am forever grateful to Mr. Zhu (referring to Zhu Jiangming, the founder, chairman and CEO of Leapmotor) for giving me 9 million shares of Ningbo Jinghang to hold 9 million shares of Leapmotor, 600,000 shares in the employee stock ownership plan, and 500,000 options based on the above performance. A total of 10.1 million shares.
According to the disclosure of the Hong Kong Stock Exchange, on January 2 this year, Wu Baojun ** 50,000 shares of Leapmotor Motors. The transaction was valued at $33 per shareHK$6 for a total value of HK$1.68 million.
If Wu Baojun still holds 10.05 million shares of Leapmotor, it will be 21 per share at the ** price of Leapmotor on January 29At 25 Hong Kong dollars, the value of Wu Baojun's shares is as high as 2HK$1.4 billion (approximately $200 million).
Fourth, will Leapmotor deliver on its promises? According to relevant reports, before joining Leapmotor, Wu Baojun and Zhu Jiangming agreed on three VAM conditions, including completing sales of 10,000 units in the first year of employment, completing sales of 40,000 units in the first two years, and promoting the listing of Leapmotor. In Wu's Weibo post, he mentioned that whether it was the sales target, the IPO plan or the cooperation with the Stellantis group, he "exceeded expectations and achieved the three major goals of the employment agreement I signed before I came to the company." Therefore, he believes that during his tenure as president of Leapmotor, he has exceeded the expectations of the three goals in the employment agreement.
For the equity interests I should get in the equity of Ningbo Jinghang and the equity of the employee stock ownership plan, the company and I are still in communication and negotiation, and the two parties have not yet reached an agreement, but I hope that the company can respect the history, respect the contract, and establish a fair and just mechanism to treat the legitimate rights and interests of every employee of the company. Wu Baojun wrote in an open letter.
Of course, this is only Wu Baojun's unilateral words. "I haven't seen the complete contract signed between Leapmotor and Wu Baojun, and outsiders don't know if there are any terms attached, so I can't just rely on Wu Baojun's words to give Leapmotor a judgment. A lawyer told Bangning that resolving labor disputes is not complicated.
According to the financial report data of Leapmotor in recent years, the company has been in a state of loss, and the loss has expanded year by year. Specifically, the loss in 2019 was 90.1 billion yuan, expanded to 1.1 billion yuan in 2020, and doubled to 28 yuan in 20214.6 billion yuan. And in 2022, the loss amounted to 51900 million yuan. The loss in the first half of 2023 was 227.6 billion yuan.
This shows that although Leapmotor is trying to expand sales and increase market share, it has been difficult to make a profit. Cash flow is also deteriorating. According to the financial report data, from 2019 to 2022, the operating cash flow of Leap was -67.5 billion yuan, -73.2 billion yuan, -101.9 billion yuan and -2.4 billion yuan, indicating that the financial pressure of Leapmotor has increased significantly.
On the one hand, Wu Baojun asked for a huge break-up fee, and on the other hand, the company suffered huge losses for a long time. How to deal with Wu Baojun's demands and the negative impact caused by the resignation turmoil, especially the huge operating losses, is indeed a headache for Leapmotor and Zhu Jiangming.