industrial overlord

Chapter 709 Korbach Factory
In the small town of Korbach, Germany, a precision machine tool factory of ALK is built here.Once upon a time, this factory was full of scenery. Every day, large container transport vehicles came and went between the factory, the train yard, and the port on the Rhine River, and sent the machine tools with the ALK trademark to all over the world.Now, with the decline of ALK, the factory has come to a halt. The doors of the workshop are locked, and the whole factory area has fallen into dead silence.

The decline of ALK seems to have happened inadvertently. At first, the news came out that it just lost a small market, and then a certain product lost its competitiveness. After that, the financial report began to show deficits In recent years, some factories have experienced underemployment.

The workers in the Korbach factory never cared about what happened to the outside world. As early as children, they saw their father and elder brother carrying lunch boxes to work in this factory. workers in a factory.In their minds, the Korbach factory will never go bankrupt, because it has such advanced technology, and at least a dozen machine tool products are unmatched in the global market.

However, bankruptcy really came. Two months ago, the factory manager gave everyone their last salary, and then informed everyone that the factory had been closed, and they would no longer have to come to work.

"If we don't come to work, what are we going to do?" A factory asked ignorantly.

"Maybe, everyone can have more time to prune the fruit trees in their gardens." The factory manager said a cold joke, but all the people didn't laugh, they just looked at the factory gate that was closing slowly with sad eyes , Then they went home with their heads down.

The closure of the Korbach factory is just a microcosm of the overall collapse of ALK.Due to the competition of products from developing countries, especially China, ALK's annual sales have dropped sharply from more than 600 billion euros to less than 200 billion euros year by year.Although this number is still very eye-catching on the list of global equipment manufacturers, for ALK, it means that it is seriously unable to make ends meet.

ALK has dozens of branch factories around the world, as well as dozens of equipment installation sites. The daily consumption of 10,000+ workers is an astronomical figure.The company has thought about reducing expenditures, but wages, benefits, and various costs can rise but not fall. Once they fall, it will lead to various disputes.After two or three years of tossing, the company's revenue has dropped by more than half, but its expenses have remained unchanged. The company's debts have continued to rise, and it has finally reached the brink of bankruptcy.

Because ALK plays a pivotal role in the German economy, the German government urgently launched a financial rescue plan, intending to support ALK and prevent this large enterprise from going bankrupt.The rescue plan proposed by economists is to dismember ALK, spin off some uncompetitive industries, sell them if they can be sold, or throw them away if they can’t, and let them fend for themselves.It is said that this is the way to prune fruit trees. After some branches are cut off, the fruit trees can live better.

Of course, ALK does not want to throw away those hard-working industries, but the poor financial situation makes it impossible to bargain with the government.The government and the bank gave ALK an ultimatum: Either accept the dismemberment plan, or the entire company will go bankrupt.

In desperation, ALK had no choice but to choose a strong man to break his wrist, and made a list of a number of factories that were about to be closed, and the Korbach factory was one of them. ALK executives also understand that after closing these factories, ALK can still exist, but its scale has been reduced by more than half, and its influence in the market will not be the same as in the past.To put it more bluntly, ALK, which used to stand out from the crowd, will be reduced to a second-rate company.

The factory is closed, and those tangible and intangible assets cannot be thrown away in vain. The best way is to find a buyer to take over, and some money can be sold, which can also be used as capital to save the main body of ALK.The Germans played a trick on this matter. When they visited China, they asked the leaders to express to China that they were willing to attract Chinese companies to invest in Germany, and that they were willing to sell some high-quality companies' equity to China.In this way, what was originally a matter of shedding the burden has become a reluctant parting.

The German leaders used ALK to give gifts to China, and there is another factor, that is, they know that there are some disputes between ALK and China.Dismembering the ALK and selling the cut parts to the Chinese is quite a sign of showing favor to China.

Of course, such a trick is only to look better diplomatically. Chinese entrepreneurs are not fools, so they don't know what the Germans really think.The status quo of various German companies can be seen clearly in the eyes of the Chinese. Everyone knows that ALK can only be sold now. sell away.However, since the Germans are willing to sell, and the technology and equipment of these companies are not bad, why not the Chinese?

This is the background of Lin Zhenhua asking Gu Jiahua to acquire ALK. The assets of the entire ALK are 500 billion euros. Whether it is Hanhua, Xingbei Heavy Machinery, or the combination of the two, it is impossible to eat it.However, the appetite of the two companies is still enough to eat up the assets spun off from ALK.The tangible and intangible value of these divested assets is more than 200 billion euros, but the German side agrees that Chinese companies can get all the shares as long as they spend 50 billion euros. This is a very cost-effective deal.

ALK lost to a group of Chinese companies such as Hanhua in the competition, not because it was inferior in technology, on the contrary, many of its technologies were still very advanced compared to Chinese companies.Its failure came from operational reasons, especially high costs, which dragged down its competitiveness.Lin Zhenhua has a strong interest in the fat cut from ALK. He knows that these assets cannot produce value in the hands of ALK, but if they are in the hands of Hanhua, it will be very different.

Gu Jiahua is also a person who has been immersed in the equipment manufacturing industry for many years, so he can't see the value of this transaction.The two reached a verbal agreement in the airport waiting room in Lisbon, agreeing to jointly raise funds to acquire this part of ALK's assets, and then take what they need.As for those assets that are of little value to these two companies, taking them back and reselling them to domestic small and medium-sized enterprises is guaranteed to be very popular. The Chinese are used to being poor. As long as the price is cheap, everyone will not dislike these second-hand assets. equipment.

These are all a few months ago. In these few months, the Chinese and German governments signed a series of agreement documents aimed at expanding economic and trade exchanges between the two sides. The German side sincerely welcomes Chinese companies to invest in Germany. .Among these agreements, the two companies including China Hanhua Heavy Industry Group and Xingbei Heavy Machinery Group jointly acquired several factories under ALK in Germany. According to German newspapers, this move was considered to be a gift from the German government to China. A voting certificate for a person—if there is such a thing as a voting certificate in Germany.

The wind in late autumn blows through the small town of Korbach, and the leaves fall to the ground. When pedestrians walk by, the sound of their feet is rustling, which reminds people of some poetic scenes. Khedira, the former sales director of ALK, is walking on the small street of Korbach at this moment, but he does not feel the slightest joy in his heart.

"Excuse me, is Mr. Mayor in the office?" Khedira stopped in front of an unpretentious building and asked an old gatekeeper at the door.

"Yes, he is in the office. Excuse me, do you have an appointment with him?" asked the old gatekeeper.

Khedira nodded: "I have an appointment with him."

"Then, please, the mayor's office is on the second floor." said the old gatekeeper.

Khedira thanked the old gatekeeper, walked into the small building of the city hall, and followed the old gatekeeper's instructions to Mayor Lawrence's office.Since ALK's factory is located locally, Khedira is no stranger to Mayor Lawrence. He walked in and greeted casually: "Hi, Mayor Lawrence, did you bother?"

"No, Mr. Khedira, you haven't been here for a long time." Lawrence let Khedira sit on the sofa, poured him a glass of water, and then sat on another sofa. He asked, "you came to see me today, what's the matter?"

Khedira said: "I want to talk to you about ALK's Korbach factory."

"Korbach factory?" Lawrence frowned and said, "Mr. Khedira, how did I hear that you are no longer serving in ALK? Could it be that the news I got was wrong?"

"Uh..." Khedira nodded slightly with embarrassment on his face, and said, "That's right, I have indeed left ALK. The reason is mainly due to the company's business compression, large-scale layoffs, and then..."

Lawrence smiled slightly, accepting Khedira's explanation.However, in his heart, he didn't believe what Khedira said.Khedira has always been an arrogant person. In the past, for some matters related to the ALK factory, he often dealt with government officials in Korbach City, and he often pretended to be a representative of a large enterprise when dealing with him. Looking at it, it has a very bad reputation among city government officials.

A year ago, Lawrence heard the news that Khedira was dismissed from ALK, and while gloating, he deliberately asked a few more questions, knowing that the reason for Khedira's dismissal was that he provoked ALK and China without understanding current affairs. Disputes among some companies caused ALK to receive strong retaliation from Chinese companies.It stands to reason that an executive in charge of market business should be able to balance all kinds of relationships, but Khedira always acts with strong personal emotions, especially racist emotions, which offends many Asian and African companies. Pull clients and peers.In the past two years, ALK's operation has been in trouble. A person like Khedira will naturally become a scapegoat selected by the top management and be cleared out.

Regarding these rumors, Lawrence naturally would not ask Khedira for confirmation, he just asked strangely: "Mr. Khedira, since you are no longer working in ALK, does the matter of the Korbach factory have anything to do with you? Besides, the Korbach factory has been sold to the Chinese, it is no longer the property of ALK, so you are working for the Chinese now?"

"It's impossible." Khedira said decisively, "How could I work for the Chinese? They are all bandits who don't follow market rules, and I will never be able to cooperate with them."

"Really?" Lawrence nodded slightly, "Then, I don't understand even more, since the Korbach factory has been sold to the Chinese, and you are neither an employee of ALK nor an employee of the Chinese, you want to work with me What are you talking about?"

"Lawrence, I think you should know that the Korbach factory is of great significance to the city's economy and employment. If this factory collapses, the city will add 5000 unemployed people, which will be very important to the city government. Formed a huge pressure." Khedira said.

"Of course I know that," Lawrence said.In Korbach, ALK's factory is the largest enterprise, both in terms of taxation and employment, this factory is the backbone of the entire city.The factory was shut down a few months ago, and the city of Korbach was mired at the same time.Lawrence was very worried about this matter, but there was nothing he could do.

"This is not something I can control. This is something you...ah, no, I should say that 'they' ALK company is considering. ALK sold the factory to the Chinese, what can I do?" Lawrence said.

Khedira didn't care about the sharpness of Lawrence's words. He said to himself: "When ALK signed the agreement with the Chinese to sell the Korbach factory, they asked the Chinese side to retain at least 50% of the production capacity of the Korbach factory locally. Take in 2000 local workers. I think this is ALK's last effort for the local economy."

Lawrence said: "I know about this matter. The Chinese representative came to talk to us last month. They reviewed their commitment to ALK and promised to keep at least 50% of their production capacity locally. A boon. As for some other equipment, they will be disassembled and shipped back to China. According to them, this is to take advantage of China's cheap labor and reduce production costs."

It is not surprising that the Chinese company signed such an agreement with ALK. In fact, in the past, when foreign capital acquired a bankrupt Chinese company, the Chinese government would also require the foreign capital to resettle the original personnel in the company. Now it is just a change in the roles of the two parties. Just convert.It was Hanhua Heavy Industries who bought the Korbach factory. When signing the contract, He Fei, the negotiator, solemnly promised that after Hanhua took over the Korbach factory, it would retain half of the production capacity and half of the employees in the factory. The life and death of half of the employees is beyond Hanhua's control.Hanhua is here to acquire companies, not to do charity.

Hanhua acquired the Korbach factory mainly because of the technical data and some cutting-edge equipment in the factory, which must be shipped back to China.As for the factory building and some other equipment, Hanhua was not interested, so he simply let them stay where they were, and kept some workers, and let them fend for themselves.The cost of German workers is more than 10 times that of Chinese workers. It is strange that things produced by such workers can make money.

"I heard that 100 Chinese workers are dismantling equipment in the factory right now?" Khedira asked.

Lawrence said: "Maybe, there are some Chinese working in the factory. As for 100 or 80 people, I don't know. I only know that they work at least 16 hours a day and don't stay in hotels at night. They lived in an office on the factory grounds. If they were not Chinese but German, I think their business would be sued in court for that alone."

"You are so right." Khedira said, "The Chinese use this method of oppressing workers to reduce their production costs. This is very unfair to our German companies."

Lawrence shrugged and said, "So what? They are willing to do it themselves, and we have no right to interfere. I have seen the scenes of those workers working, and I think they are all happy and have no complaints. All I care about now is them When will the dismantling of the equipment be completed and the production of the Korbach factory resumed as soon as possible. You have to know that due to the shutdown of the Korbach factory in the past few months, the public security in this city has become worse."

Khedira said: "What I want to tell you is this matter. As far as I know, what the Chinese are currently dismantling is the most cutting-edge equipment in the Korbach factory. They will transport these equipment back to China to be rebuilt. Assemble them to produce high-end precision machine tools. Those left locally are all outdated equipment. This means that the Korbach factory can only produce some low-end machine tools in the future, and it will completely lose its market competitiveness.”

"What does this have to do with us?" Lawrence said. In his opinion, high-end or low-end is meaningless. The products produced by ALK in the past were always high-end, so what is the result?

"Whether it is a factory in China or a factory in Germany, it is now a Chinese company. Does it have anything to do with us what kind of equipment they are willing to produce?" Lawrence said to Khedira.

"Of course it's related!" Khedira said, "Think about it, Chinese workers are using high-end equipment, while our German workers are using low-end equipment. This is an insult to our German workers!"

"Uh... isn't this statement a bit too far-fetched?" Lawrence asked. He didn't have strong racist sentiments like Khedira. He felt that as long as the workers had a job to do, it didn't seem to matter what equipment they used.

Khedira continued: "If it's just a difference in treatment, it's fine. Since the Chinese only leave us with backward equipment, the products of the Korbach factory will not be competitive in the market. In the end, it is inevitable Closed. At that time, the Chinese will just throw this worthless factory away so that they don’t have to honor the agreement with ALK.”

"Is that so?" Lawrence began to understand what Khedira meant. This was a very serious question. He asked, "Mr. Khedira, in your opinion, what should we do?"

"Stop them!" Khedira said firmly, "We can't let them take the equipment away!"

(End of this chapter)