Extraordinary Genius - Chapter 287 – Military to Civilian, Civilian to Military
General Shen and Hou Haitao looked at each other and sighed. Feng Yu really had no intentions to join the military.
Actually, General Shen was really here to meet Feng Yu along the way. The main reason why he was at Bing City was to speak to Hou Haitao. Hou Haitao was also looking forward to General Shen.
Bing City Aviation Factory was formerly a military factory, and it was manufacturing fighter jets. The Aviation Factory was considered one of China’s earlier military factories. But after the last reform, the Aviation Factory was converted to a civilian factory.
It was from then onwards, Bing City Aviation Factory started its automobile project. The Aviation Factory had thought that they would make some profits by incorporating their jet engines technologies into automobile engines.
But they were located too close to FAW, and the cars they produced were nothing special and the sales were not as good as they expected. Although they did not make any losses, they did not make any profits either.
The Aviation Factory then started to manufacture small aircraft and wanted to make profits from those. But the sales were not good.
If it wasn’t for the humidifiers, the Aviation Factory might even turn their helicopters into civilian use helicopters to make ends meet.
The main reason for Aviation Factory’s woes was lack of planning and ability to adapt to the market changes. They do not know how to produce products to meet the needs of the consumers. Even with superior technologies, if they do not know how to market their products, they would not make any profits.
But the Aviation Factory was considered not bad. Many military factories that were converted to civilian factories were bankrupted. Even if the factories were not bankrupt, they were a burden to the local government. There were many such instances in Feng Yu’s past life.
Feng Yu really despised the leaders of this era. They had the technologies and manufacturing capabilities of a military factory, but they do not know how to make use of those capabilities to make money.
Look at the US and the Soviet Union, these countries were exporting their weapons. They made money by selling their obsoleted weapons, and they could still keep their newest technologies and even cover their cost of developing those technologies.
China leaders insist on not selling weapons. They felt China was a peace-loving country and they should not be selling weapons. The countries surrounding China, like Malaysia, Japan, Korea, etc. were all talking about China’s threat to the region. You think by not selling weapons, those countries will not believe China is a threat to them?
Since China was considered a threat to those countries no matter what China does, why not just ignore them? Many of these leaders do not understand this.
Those countries will group together and try to stop China’s growth.
The reforms of those military factories to civilian factories were converting 2/3 of the factory to produce products for the civilians. But how many of these factories could survive? There were less than 10% of these factories that survived. These factories do not know how to make use of their military technologies on civilian products.
As such, there was a weird phenomenon in China. Whenever a popular product appears in China, there will be similar products from different brands. End up, all factories did not make any profits and suffer losses together!
Initially, the Aviation Factory’s conversion was not considered successful, but it did not make any losses. It was only from two years ago, the Aviation Factory made profits. That was because of the humidifiers, and later, the factory bought an ultra-high power electric furnace. With the furnace, the Aviation Factory made some technological breakthroughs and lower their helicopter’s cost of productions.
The leaders from the top start to notice the Aviation Factory again and felt that Hou Haitao was quite capable. Soon, Hou Haitao surprises them again by getting some Soviet Union’s aircraft engines technologies. These technologies were crucial to China.
But the Aviation Factory does not have sophisticated research facilities, and that’s why Shenyang Army gave an order to take the technologies and engines away.
However, Hou Haitao got new helicopter technologies after that. The Aviation factories were experts on helicopters and this time, the higher-ups had no reasons to take away those technologies.
To research on those technologies, the Aviation Factory requires lots of funds. They could only apply for an extra budget from the top.
Hou Haitao’s greatest wish was to let the Aviation Factory to be converted back to a military factory.
In the past, the City Government and even the Provincial Government could not do anything to the Aviation Factory. Now, even the City Government could interfere in the Aviation Factory’s acquisition of a plot of land. This thing that pisses Hou Haitao the most was the taxes imposed on the Aviation Factory. The Aviation Factory had to pay a lot of taxes to the City, and they did not enjoy the same subsidies as other state-own enterprises.
Now, Hou Haitao had the opportunity. Hou Haitao had gotten the MIG fighter jet technologies because of Feng Yu. The higher-ups knew the importance of these technologies and they were considering Hou Haitao’s request to convert Aviation Factory back to be a military factory.
General Shen had come to Bing City to talk to Hou Haitao. He represented the military and wanted to speak to Hou Haitao about converting the Aviation Factory into a 50% military, 50% civilian factory. This would be similar to Japan and the Western countries military factories.
Of course, the Aviation Factory will not need to pay any more taxes and still be able to enjoy the government subsidies for private factories. At the same time, Hou Haitao would be given the rank of a Major.
The higher-ups had already decided. Hou Haitao wanted to get more benefits and supports.
Hou Haitao remembered Feng Yu telling him that Japan’s Mitsubishi, Fuji, Nikon, etc. were all formerly military factories. Although these factories were all civilian factories now, they were still doing R&D for the military and using those R&D results for products for the civilian. The money earned from the products sold to the civilians could even fund their military research. Should a war break out, these factories could manufacture military products immediately!
Mitsubishi had manufactured tanks, Fuji had made aircraft, and Nikon had manufactured scopes for the military. But the trucks, cars, and cameras produced by these brands were very popular in the world and had earned a lot of money for these companies.
Combining both military and civilian factories together was a suggestion by Feng Yu. This was modeled after some successful companies in developed western countries. There were no factories in China currently that had used this model. Feng Yu had told Hou Haitao that if he succeeded, he would be China’s first Factory director that succeeded and would leave his name in history.
Feng Yu was only casually talking about this with Hou Haitao, but Hou Haitao kept it in mind. He treated this as his goal and had been working hard towards this goal.
Now, Hou Haitao had gotten this opportunity, and he does not want to give up. It was hard for the higher-ups to decide about this as this would be a first for China.
Military factories are military factories. Civilian factories are civilian factories. How can both be mixed together? Even if this type of factories exists overseas, it might not be suitable for China!
Hou Haitao even wanted both the benefits of military and civilian factories, and still wanted to manufacture products for civilians. This was not a small sum for the government.
Finally, the higher-ups decided to let Bing city Aviation Factory act as a test. If the Aviation Factory succeeded, it would help the rest of the converted military factories.
Feng Yu did not know about this. With just a casual remark, he had made significant changes to China’s factories. When Hou Haitao was talking to General Shen, Feng Yu was watching the news. The “Great One” was visiting the south!