Extraordinary Genius - Chapter 725
Chapter 725 – Domineering Xu Changyou
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Feng Yu told Fu Guangzheng about the acquisition of thesmall machinery factories in the other areas of the province. Fu Guangzheng wasvery supportive of this idea.
He had also seen the financial reports of Bing CityMachinery Company and knew that the spare parts amounted to a large portion oftheir operating cost. The technology of producing those parts was not high anddoes not need any unique materials or techniques. It was only very labor-intensive.
By acquiring those small factories, they could foster a goodrelationship with the Provincial Government and also get some benefits.Furthermore, Tai Hua Supermarket could purchase the two plots of land theywanted. They could build two commercial buildings there and secure the BingCity market. Even when Walmart and Carrefour were to enter Bing City, theywould not be able to compete with Tai Hua Supermarket Corporation.
It was Tai Hua Supermarket Corporation’s dream to monopolizeChina’s supermarket industry. The company still does not have all the strategiclocations or funds. Although Tai Hua Supermarkets’ sales were doing well, highcashflow was needed. They could get high loans from the banks, but they darenot claim that they had already monopolized the Chinese market.
If some of Tai Hua Supermarkets were to lose money, theimpact on their brands would be significant. The consumers will lose confidencein Tai Hua Supermarket Corporation.
This was why Tai Hua Supermarket Corporation’s aim in thecoming few years was to monopolize the 2nd tier and above cites.They want to prevent Carrefour and Walmart from getting the prime locations.
What Feng Yu did have helped Tai Hua Supermarket Corporationto control the Bing City market. He also showed Fu Guangzheng that he could useother ways of cooperation to get the support of the local governments.
As long as it was a win-win situation, the other party willnot reject.
After Feng Yu left the Provincial Government, Xu Changyoucalled for a meeting to discuss this proposal. The other industries could wait,but the Machinery companies must be settled first.
After the mergers of the small factories, Bing CityMachinery Company’s employees shot up. Their entire staffs amounted to morethan 20,000. Bing City Machinery Company will be China’s biggest employer inthe machinery industry.
The other big manufacturing plants like FAW, SAIC, YTO GroupCorporation, etc. only had slightly more than 10,000 staffs. Bing CityMachinery Company had become the biggest machinery manufacturer in China.
Xu Changyou could claim credit from his higher-ups from thisfact alone. Of course. He had to pull this off first.
The next day, Xu Changyou called for a meeting with thewhole province’s machinery factories’ heads. He wants to announce his decision.
During yesterday’s meeting with the Provincial Governmentleaders, there were some objections. They felt this proposal of privatizingstate-owned enterprises was equivalent to selling away state-owned assets!
Many of these machinery factories were still making money.All they need were some minor changes, and everything will be fine. Why shouldthey sell all the machinery factories to Bing City Machinery company? Thatcompany’s biggest shareholder was an individual.
Privatization of the state-owned enterprises was an issuethat had been in discussion by the central government. Many people criticized thatthis was giving away the national assets.
Xu Changyou asked those officers who objected. Why was thismove a loss for the government? Look at Bing City Machinery Company. If therewere no other shareholders, new technologies, can they grow to their currentscale? Their agriculture machinery products were the most advanced in China.Their motorcycles were selling very well. After the motorbikes, the companyintroduces cars. They had caught up with FAW and SAIC and will be overtakingthem soon.
The taxes paid by this company was several times more thanthe former Bing City Machinery Factory. The company also provided employmentfor much more workers. Bing City’s stake in the company might be lesser, butthe dividends from their shares were several times more than before.
Furthermore, the Central Government wants to implementSocial Security Insurance. How can the Provincial Government implement thisSocial Security when so many companies could not afford it? Who is going to beresponsible for this?
Selling those state-owned enterprises is not selling awaythose workers. Bing City Machinery Company is also not a private company. It isconsidered a joint venture. The Central Government is also encouraging morejoint-venture companies. This way, all those companies can afford to pay theSocial Security Insurance and also develop faster. The employees will also beable to receive higher wages. Why is this not a good thing?
Every worker is essential to the country. Those workers wouldbe given a better life if those companies were sold. They will have moresecurity in the future. What’s wrong with this proposal?
When the issue of Social Security Insurance was brought up,those that objects had nothing to retort. Xu Changyou’s proposal could reallysolve the Social Security Insurance of those state-owned enterprises.
If these state-owned enterprises paid for Social SecurityInsurance, the Provincial Government would be able to force other companies topay. Look, those companies can pay for the Social Security Insurance, why isyour factory not paying?
Now, many companies had grouped up to object to paying thesocial security insurance. They want the government to take care of retired workersand does not want to spend a single cent. This was the local government’sbiggest headache.
This proposal would break up those groups, and thegovernment would be able to achieve its target. If the governments couldcollect more Social Security Insurance premiums, it will be an achievement, andthey will get more credit. Credits were given to the local government forachieving excellent results for the birth planning policy, let alone thispolicy that involves collecting money from the companies.
Xu Changyou was a domineering person. He immediatelyapproved this proposal and stopped all those objections. He wants this proposalto be implemented quickly. The Provincial Government also had to come up with aplan to reorganize many industries in the whole province. The province must setup a few competitive companies to increase the economy.
The Provincial Government’s No. 2 was not happy. Xu Changyouhad interfered with his work. But there was nothing he could do as Xu Changyouwas the head of the whole Longjiang Province! Also, he had never thought ofthis idea.
There were not many objections for the mergers of thepharmaceutical factories, as the major shareholder of Bing City PharmaceuticalEnterprise was Bing City’s State-owned Assets Supervision and AdministrationCommission of the State Council.
But all the leaders never expect Xu Changyou to implementhis plan so fast. He called all the related parties over for a meeting toannounce the government’s decision.
The leaders of all the local government and factoriesobjected to this proposal. The City Governments felt they would receive fewertaxes, and the factories’ leaders were worried that they would lose theirpositions. If the factories were acquired, will they still be the factories’head? Can they still hold on to the authority?
“Why are you all still opposing this proposal after I listout all the benefits? Are you all opposing for the sake of opposing? I had madeit clear on the taxes of the respective local government. The factories’ incomewill be much higher than before. Even though the percentage of tax had becomelesser, it was only for a year. The tax income will be much more than before.Also, the workers’ salaries will be increased, and the issue of Social SecurityInsurance will be solved. All the local government will be able to get creditfor implementing this policy successfully. You all will be able to use thisexample to press the rest of the companies to implement this policy. Is this aproblem?” Xu Changyou banged the table and questioned them.
Xu Changyou knew that selling these state-owned enterprisesaway will affect the income of these local governments. Afterall thesestate-owned enterprises were a source of income for these governments. Some ofthese governments also made use of these enterprises to “clean” their accounts.
But merging these factories with Bing City Machinery Companywould benefit the whole province as a whole. Even if Xu Changyou could not gethis promotion from this merger, he had done something that helped everyone inthe region.
“I am telling all of you for the last time. We are not discussingwith you all. This is an order. The Provincial Government had reached anagreement with Bing City Machinery Company. The paperwork will be sent to thelocal governments after this meeting. Don’t blame me for punishing anyone whotries to stop this!”
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