Photo: Courtesy of Real Image Media Collection
When a company dies, what happens to its employees? While a seemingly obvious solution may be to just get up and walk away, employees of a state-owned enterprise (SOE) in China prove that the reality is not that simple.
When the 1970s heralded a wave of economic reform in China, large, inefficient state-owned enterprises that were once directly controlled by the Chinese government were seen as obstacles to the country’s economic liberalization efforts. Thus, economic transformation meant abandoning underperforming state enterprises labeled “zombies”. Over the decades, many of these public enterprises have been gradually privatized to improve their competitiveness and reduce their dependence on the state. The reforms continue to this day.
In 2011, CNNC HUA YUAN Titanium Dioxide, a “zombie” state-owned enterprise in northwest China, was forced to undergo a bankruptcy reorganization – a process where finances, operations and management are reorganized into the hope to save the company from the brink of collapse.
The documentary A difficult transition shines a light on this painful process, capturing the conflicts of interest between the various parties involved, including state-owned enterprise employees, shareholders, trustees, creditors and individual investors. Through interviews and re-enactments, he shows how the long and winding journey of corporate reorganization is also filled with heated conflict, emotional turmoil and extreme despair.
In one scene, a corporate trustee caught in the middle of shareholders and employees, recounts how he broke down during a heated discussion with a shareholder about how to settle the company’s debt. “Blood spurted out of his eyes and nose,” recalled a witness. The trustee was rushed to hospital and treated for high blood pressure, the result of extreme stress.
The film explores the messy intersections of interests between different stakeholders – employees who have devoted their whole lives to public companies, shareholders concerned about the loss of public assets, creditors who are relentless in their demands, and inflexible managers driven to despair.
While the “letting go” of public enterprises is widely seen as beneficial in Chinese economic growththe tragic human costs of these cut-and-dried economic decisions are rarely recognized in the public eye, and A difficult transition try to find that out.
It’s hard to worry about the decline of a business. But seeing its effects on the lives of unsuspecting employees, the story of a failing company becomes a compelling testament to the human spirit against rapid change. change society.
A difficult transition was screened at the Guangzhou International Documentary Film Festival in Guangzhou, China, the 7th Chinesisches Filmfest München in Munich, Germany, and the Théâtre L’ Entrepot in Paris, France.
In partnership with Real Image Media Collection.