Extraordinary Genius - Chapter 194 –Reassignment or Profits
Feng Yu left Hou Haitao’s office with a smile, leaving the both of them sighing.
If they had known earlier, they should have suggested to set up a new factory themselves. At least they would still be able to keep their profits. Now, they had to let go a bit portion of their earnings.
Back at home, Feng Yu sat on the sofa and paged Fu Guangzheng. A minute later, the phone at home rang.
“Brother Fu, how was negotiation on your side?”
“It’s going well. I had bought a factory, and the factory had ready workers. But the only problem is that there are too many idling workers. I am now talking to the local government. We can take care of the retired workers, but we would not take in those lazy, malingering workers!”
Feng Yu had discussed with Fu Guangzheng last year. He asked Fu Guangzheng to take over a factory with excellent location at Southern Guangzhou.
This way, it will be closer to Hong Kong and more accessible for them to do exportation. It was also Feng Yu wanted to take precautions against the Motor Factory, in case the Motor Factory start to create problems for him. But unexpectedly, the Motor Factory really cannot meet the required production figures. They even wanted to reduce the production for the humidifiers.
Actually, this was along with what Feng Yu had in mind. But he acted that he was angry and used the opportunity to say that he wants to set up a new factory. As expected, Hou Haitao and Li Shiyou did not want to build a new factory, and even if they wanted, they did not have enough funds.
Hou Haitao wanted to buy the ultra-powered electric furnace, and he needed at least 20 million Rubles. Li Shiyou did not have many areas he needed to spend on. Although he ordered some generators related technologies from Feng Yu. Feng Yu also did not charge him a high price. But this year, the Motor Factory received a lot of orders from the top.
The profits from the generators were not as much as the humidifiers, but Li Shiyou had no choice. The Motor Factory had to cut the humidifiers production to work on the spare parts for the generators. These used up a lot of their funds and resulted in a lack of funds in the factory.
Both factories could not afford to build the new factory, and Feng Yu naturally would not give them so many profits. But both of them would not accept not getting profits from the new factory, especially Hou Haitao. His factory was using their technical capabilities in exchange for a percentage of the profits.
Feng Yu had discussed with Fu Guangzheng. Fu Guangzheng would buy a factory at Southern Guangzhou and Feng Yu would be raising funds. When the factory is set up, Fu Guangzheng will get a 20% stake.
Feng Yu wanted full control so he cannot give the Motor Factory and the Aviation Factory 20% shares each. They could not come up with money and why should they be getting the new factory’s shares?
Hou Haitao said that he could send his engineers to the new factory to guide the workers and help them to set up the production lines. Li Shiyou also said that he had a batch of experienced workers who were familiar with humidifiers. These workers could also help to set up the production lines and teach the workers at Guangzhou.
Feng Yu looked at these two. One of them said that he would send his engineer, the other said that he would send workers. Feng Yu rejected their offers citing that the salary of the engineer was too high and he could not afford.
As for the workers, there was no need for them. The factory they had acquired had lots of experience workers!
The workers Li Shiyou wanted to send were most likely a batch of retired workers. They had no work in the first place, and Li Shiyou makes it as if he was doing Feng Yu a big favor.
Both of them were very smart, but Feng Yu was not stupid either. Want to take advantage of Feng Yu? It was not so easy. All the while Feng Yu was the one who took advantage of others and since when he was taken advantage of?
Feng Yu insisted that both factories to come up with cash and he would let them have a stake in the new factory. No money? Sorry. You will not be getting any shares of the new factory.
Feng Yu told them about the new factory, and Fu Guangzheng was still negotiating. The acquisition of the factory would cost 10 million Rubles, and then the replacement of the machines would be another sum. They even had to take care of the retired workers……
Feng Yu said a lot. He wanted to tell the both of them that even if you use cash to invest, you would be making a loss too. Why not just buy a small number of shares?
Feng Yu was the one who suggested to take care of the retired workers. Fu Guangzheng had wanted to pass those retired workers to the local government. Buying the factory had cost a lot and why should they still have to take care of the retired workers? Those workers would not be contributing to the factory anyway.
Feng Yu just told him that this would be good for the factory and brand’s image. If the products of a company with a conscience and a company that exploits their workers, were about the same, which company’s product would sell better?
Fu Guangzheng told his family, and Fu Rongjin said to him that the Fu Family’s reputation in China was critical. He must make sure that no one can complain Hong Kong businessmen were evil and exploited China’s workers. He must listen to Feng Yu. Anyway, it was only taking care of the retired workers, and the pensions were not a considerable amount. He could also use this point to negotiate for a lower the price for the factory.
Based on Feng Yu’s calculations, Li Shiyou and Hou Haitao could only get about 5% profits from the humidifiers produced at the new factory and not a single cent of the bladeless fans.
Both of them did not agree, but Feng Yu smiled at them and said a few words: “Soviet Union’s machines and technologies.”
These simple words were like a heavy lock which constrained the both of them. If they really fall out with Feng Yu, they would be the ones losing.
Feng Yu can authorize foreign companies to manufacture, and this was legal. Tai Hua Trading was controlling the sales in the China market, and even if the Motor Factory could meet the required productions, Feng Yu could also stop overseas exportation. They would still be at the losing end.
Also, if Feng Yu sold the Soviet Union’s machines and technologies to their competitors, they would suffer even more losses. The Aviation Factory and the Motor Factory were not the top enterprises in their respective industries, but with these machines, they might reach the top. Feng Yu could easily wipe them out using their competitors.
By becoming the leaders of their respective industries in China, Hou Haitao and Li Shiyou would have a bright future. This could not be achieved by earning more profits for the factory. Instead, they might be stuck in this position forever to make money for the government.
In the end, they accepted Feng Yu’s suggestion. The both of them would come up with 1 million each to get a 5% stake in the new factory. The engineer sent by the Aviation Factory can be an engineering retiring at the end of this year, and the new factory would accept the batch of retired workers. They would also be receiving the same salaries before they retire.
Fu Guangzheng invested a sum of money and gotten a 20% stake. Feng Yu was the one that invested the most, and he owns the patent of both products. He held 70% shares of the new factory!