Chapter 725
Feng Yu told Fu Guangzheng about the acquisition of the small machinery factories in the other areas of the province . Fu Guangzheng was very supportive of this idea .
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He had also seen the financial reports of Bing City Machinery Company and knew that the spare parts amounted to a large portion of their operating cost . The technology of producing those parts was not high and does not need any unique materials or techniques . It was only very labor-intensive .
By acquiring those small factories, they could foster a good relationship with the Provincial Government and also get some benefits . Furthermore, Tai Hua Supermarket could purchase the two plots of land they wanted . They could build two commercial buildings there and secure the Bing City market . Even when Walmart and Carrefour were to enter Bing City, they would not be able to compete with Tai Hua Supermarket Corporation .
It was Tai Hua Supermarket Corporation’s dream to monopolize China’s supermarket industry . The company still does not have all the strategic locations or funds . Although Tai Hua Supermarkets’ sales were doing well, high cashflow was needed . They could get high loans from the banks, but they dare not claim that they had already monopolized the Chinese market .
If some of Tai Hua Supermarkets were to lose money, the impact on their brands would be significant . The consumers will lose confidence in Tai Hua Supermarket Corporation .
This was why Tai Hua Supermarket Corporation’s aim in the coming 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 Corporation to control the Bing City market . He also showed Fu Guangzheng that he could use other ways of cooperation to get the support of the local governments .
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As long as it was a win-win situation, the other party will not reject .
After Feng Yu left the Provincial Government, Xu Changyou called 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 City Machinery Company’s employees shot up . Their entire staffs amounted to more than 20,000 . Bing City Machinery Company will be China’s biggest employer in the machinery industry .
The other big manufacturing plants like FAW, SAIC, YTO Group Corporation, etc . only had slightly more than 10,000 staffs . Bing City Machinery Company had become the biggest machinery manufacturer in China .
Xu Changyou could claim credit from his higher-ups from this fact alone . Of course . He had to pull this off first .
The next day, Xu Changyou called for a meeting with the whole province’s machinery factories’ heads . He wants to announce his decision .
During yesterday’s meeting with the Provincial Government leaders, there were some objections . They felt this proposal of privatizing state-owned enterprises was equivalent to selling away state-owned assets!
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Many of these machinery factories were still making money . All they need were some minor changes, and everything will be fine . Why should they sell all the machinery factories to Bing City Machinery company? That company’s biggest shareholder was an individual .
Privatization of the state-owned enterprises was an issue that had been in discussion by the central government . Many people criticized that this was giving away the national assets .
Xu Changyou asked those officers who objected . Why was this move a loss for the government? Look at Bing City Machinery Company . If there were no other shareholders, new technologies, can they grow to their current scale? Their agriculture machinery products were the most advanced in China . Their motorcycles were selling very well . After the motorbikes, the company introduces cars . They had caught up with FAW and SAIC and will be overtaking them soon .
The taxes paid by this company was several times more than the former Bing City Machinery Factory . The company also provided employment for much more workers . Bing City’s stake in the company might be lesser, but the dividends from their shares were several times more than before .
Furthermore, the Central Government wants to implement Social Security Insurance . How can the Provincial Government implement this Social Security when so many companies could not afford it? Who is going to be responsible for this?
Selling those state-owned enterprises is not selling away those workers . Bing City Machinery Company is also not a private company . It is considered a joint venture . The Central Government is also encouraging more joint-venture companies . This way, all those companies can afford to pay the Social Security Insurance and also develop faster . The employees will also be able to receive higher wages . Why is this not a good thing?
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Every worker is essential to the country . Those workers would be given a better life if those companies were sold . They will have more security 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 really solve the Social Security Insurance of those state-owned enterprises .
If these state-owned enterprises paid for Social Security Insurance, the Provincial Government would be able to force other companies to pay . Look, those companies can pay for the Social Security Insurance, why is your factory not paying?
Now, many companies had grouped up to object to paying the social security insurance . They want the government to take care of retired workers and does not want to spend a single cent . This was the local government’s biggest headache .
This proposal would break up those groups, and the government would be able to achieve its target . If the governments could collect more Social Security Insurance premiums, it will be an achievement, and they will get more credit . Credits were given to the local government for achieving excellent results for the birth planning policy, let alone this policy that involves collecting money from the companies .
Xu Changyou was a domineering person . He immediately approved this proposal and stopped all those objections . He wants this proposal to be implemented quickly . The Provincial Government also had to come up with a plan to reorganize many industries in the whole province . The province must set up a few competitive companies to increase the economy .
The Provincial Government’s No . 2 was not happy . Xu Changyou had interfered with his work . But there was nothing he could do as Xu Changyou was the head of the whole Longjiang Province! Also, he had never thought of this idea .
There were not many objections for the mergers of the pharmaceutical factories, as the major shareholder of Bing City Pharmaceutical Enterprise was Bing City’s State-owned Assets Supervision and Administration Commission of the State Council .
But all the leaders never expect Xu Changyou to implement his plan so fast . He called all the related parties over for a meeting to announce the government’s decision .
The leaders of all the local government and factories objected to this proposal . The City Governments felt they would receive fewer taxes, and the factories’ leaders were worried that they would lose their positions . 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 list out all the benefits? Are you all opposing for the sake of opposing? I had made it clear on the taxes of the respective local government . The factories’ income will be much higher than before . Even though the percentage of tax had become lesser, 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 Security Insurance will be solved . All the local government will be able to get credit for implementing this policy successfully . You all will be able to use this example to press the rest of the companies to implement this policy . Is this a problem?” Xu Changyou banged the table and questioned them .
Xu Changyou knew that selling these state-owned enterprises away will affect the income of these local governments . Afterall these state-owned enterprises were a source of income for these governments . Some of these governments also made use of these enterprises to “clean” their accounts .
But merging these factories with Bing City Machinery Company would benefit the whole province as a whole . Even if Xu Changyou could not get his promotion from this merger, he had done something that helped everyone in the region .
“I am telling all of you for the last time . We are not discussing with you all . This is an order . The Provincial Government had reached an agreement with Bing City Machinery Company . The paperwork will be sent to the local governments after this meeting . Don’t blame me for punishing anyone who tries to stop this!”