The Industrial Giant Reborn

Chapter 174 Investing in Nike
"Let's build up the popularity first. As long as the fan is really sold in most supermarkets in the United States, I can advertise on several major TV stations in the United States." Chen Zhiwen said.

TV stations covering the whole United States generally cost tens to millions of dollars in advertising costs. Once it is broadcast, theoretically speaking, millions or even tens of millions of people will watch it in the golden age, but this kind of advertising is not something that any company can participate in. Yes, if the product itself is not covered in most parts of the United States, even if it is advertised, consumers will not see the brand in supermarkets or other shopping places, and they will soon forget it completely.

Red Bull was able to succeed because it was just a drink with good unique effects, so it quickly entered major supermarkets, and then a large amount of money was spent on advertising, and naturally sales skyrocketed, forming a positive cycle development model.

But for home appliances, every supermarket is very cautious about the introduction of other brands, because this thing is powered on, and there will be safety issues when it comes to electricity. Therefore, the process of introducing it is difficult and slow.

Midea produced fans as early as 2 years ago, and spent a lot of money to get through the purchases of many supermarkets in Europe and the United States, but they can only send a small part of the products to supermarkets, and then sell them in small quantities. After the market confirmation in the next year, no quality problems occurred, and then the retailer dared to start large-scale purchases.

"In that case, it happens that Hong Kong is also planning to build an industrial park, and we can increase the production capacity of fans on a large scale." Lei Shengli said with bright eyes.

"Yes, it's just the right time. I need a large industrial plan to negotiate with the Hong Kong government, and a large production capacity can also reduce costs to the greatest extent." Chen Zhiwen nodded and said.

Using cost-effective fans to open up sales channels for other Midea electrical appliances brands is a decision made by Chen Zhiwen a few years ago. Therefore, in Hong Kong, the core components of fans, motors and injection molding, are all produced by themselves, and they control the vertical industrial chain step by step. .

Because only in this way can the cost be reduced to the greatest extent, similar to the Samsung Group of the later generations, with the entire industry chain in hand, the cost can be minimized. If Jobs’s Apple is too abnormal and TSMC is raised by Apple’s orders, Samsung will definitely become the next generation. There is almost no one of the largest electronic brands in the world, because the Japanese ones at that time have long been beaten by various tricks!
Everything we are doing now is to reduce the production cost of fans with the greatest capacity in the future mass production.

"The cost of fans is not a problem. Many of our colleagues in Hong Kong have lost money. Last time we got together, I told them not to do it at all and go speculate in real estate." Lei Shengli said with a smile.

"If they really do it, they will definitely be grateful to you in a few years." Chen Zhiwen laughed.

In the future of Hong Kong, there are really only real estate speculators and finance. Not everyone can play finance, but real estate is different. If you have money, you can just keep buying with your eyes closed. It can be doubled several times. If leverage is used, ten times is normal.

If you have no money and no guts, you can only deposit your savings in the bank when the housing price rises sharply, and then ask the bank to lend the money to the real estate speculators, and then these real estate speculators will further increase the housing price.

Although it seems a bit tragic, this is an iron economic law, and no one can stop it.

After spending the night in Los Angeles, Lei Shengli boarded the plane to Japan again. Fortunately, they were all first-class seats, so he could get enough rest, while Chen Zhiwen went to the Nike company in Portland.

Phil Knight, the founder of Nike, came to pick up the plane in person, but he got into the convoy that Chen Zhiwen had prepared long ago.

Chen Zhiwen also attaches great importance to his own travel now. Hong Kong has his own fleet, and the United States also has a set of bulletproof cars specially customized from Mercedes-Benz. Three are in Hong Kong and three are in the United States. When there is a need to go somewhere, the car will drive there in advance, or transport it by air. Although this will cost a lot of money, it can guarantee a lot of convenience, privacy and security.

As early as in Los Angeles, one of the cars drove to Portland as planned. After Chen Zhiwen's plane arrived, it could be used directly. After the popularity of private jets in the future, many rich people will buy Boeing private jets. You can fly around the world with your car.

Under the direction of Phil Knight, the car drove to an industrial area in Portland, and Chen Zhiwen saw the huge Nike logo on the building on the right at a glance.

"Eric, please." After the car drove into the factory area, Fernet said with a smile: "This is Nike's shoe factory."

"Okay." Chen Zhiwen nodded, walked out of the car, looked around casually, and said, "Phil, your factory is not small, is it?"

"The reason why this factory was built at the beginning was to consider that the demand for production capacity would be huge in the future, so it was purposely built a little bigger." Phil Knight nodded and said.

"The production here has stopped now?" Chen Zhiwen glanced at the workshop inside the gate, there seemed to be few people inside, and no loud voices could be heard. Although the shoe-making industry is a light industry, there should be some movement anyway, right?
"Yes, the work here has been suspended. In the past month, the trade union has made a lot of noise. Their demands are too high. I can't agree to it, so I stopped working directly." Fernet said helplessly.

Chen Zhiwen asked: "During this period, Nike's shoes?"

Phil Knight said: "It was done by other suppliers. Even when I built this factory, I did not stop the cooperation with the previous suppliers."

"If you close this factory, won't there be any problems with the trade union?" Chen Zhiwen asked again.

The trade unions in the United States are really not generally strong. Today, the three largest auto giants in the United States, General Motors, Ford, and Chrysler, have been fighting bloody battles with trade unions in the past and even in the next few decades. In the end, they were still beaten in the 21st century. Flat out.

You know, GM in the 70s was the super giant of American industry. Its annual car production capacity exceeded 800 million vehicles, consuming 10% of the nation's steel production capacity and about 15% of its rubber production capacity. .

The American manufacturing industry died of labor unions. This sentence cannot be said to be completely correct, but it is at least half correct.

"I'm going to close the factory. Except for some employees who are willing to go to Hong Kong, all the other labor contracts have been legally terminated. What else does the union want?" Fernet said with some resentment, as if the union would bring him A lot of sad memories came.

"That's fine, as long as the equipment is moved to Hong Kong and the personnel are in place, production can continue." Chen Zhiwen nodded.

"Yeah, as long as there are no problems in production, plus Eric's capital investment, Nike can also concentrate on investing in the terminal market." Phil Knight said.

"In terms of production, you can rest assured that as long as your orders are sufficient for the factory in Hong Kong, I will continue to invest money to ensure production capacity and quality." Chen Zhiwen said with a smile.

"I believe in Eric's ability. Let's take a tour of the factory here, and then go to the company's headquarters. There are other shareholders over there. Let's meet and get to know each other," Phil Nike said.

Nike's U.S. factory is not small, even larger than Germany's Bitzer. After a little internal inspection, Chen Zhiwen knew the reason for the failure of this factory.

There are too many workstations. Although the shoe industry may be more technical than other clothing industries, it still cannot get rid of the "intensive manufacturing industry". It can be said that it is very brave.

Coupled with the outbreak of the oil crisis in the past two years, there were problems with energy supply and logistics. As long as it is still an intensive manufacturing industry, it is basically impossible to survive, unless it is high-end manufacturing such as automobiles, aircraft, and special equipment. This is also the case in Europe. Manufacturing is the only industry that can survive for a long time.

Nike is also taking the high-end route, but the high cost of production limits the expansion of the terminal market. Coupled with some other reasons, it will naturally lead to problems in the capital chain.

In the 70s and 80s, the manufacturing industry in the United States was the last struggle. The high cost and the labor unions who were provoking troubles could only choose to go to Mexico or Asia.

Half an hour later, the factory went around and the two returned to the car. Fernet asked with a smile, "How do you feel?"

"It's much better than the factories in Hong Kong, especially the environment." Chen Zhiwen nodded and said, in fact, there is nothing high-tech. Even after 50 years, the shoe-making industry will mainly rely on labor, with modern quality control at most. And the production capacity monitoring system, but this is also a management aspect. No matter what, shoes still have to be produced by people.

The reason why Chen Zhiwen decided to move the equipment here to Hong Kong is mainly because of cost considerations. It will definitely cost more money to rebuild in Hong Kong, but here it is almost free. As long as it is packed and shipped in a container, he is responsible for the freight and labor Fee will do.

And having said that, a lot of equipment here in the United States is still good, and it is better than Hong Kong. For example, all kinds of cabinets are made of stainless steel. If it is in Hong Kong, it would be good if ordinary sweatshops can have iron shelves.

The distance between Nike's headquarters and the factory is not far. In less than 10 minutes, the car arrived in front of an office building, which was the place where Chen Zhiwen came last time.

Phil Knight attached great importance to introducing Nike's current shareholders to Chen Zhiwen, but these are just representatives. Some of Nike's current shareholders are investment funds, and the other is a group of people who started the business with Knight.

Before Chen Zhiwen became a shareholder, Nike's board of directors had a total of 7 directors, 5 of which were Nike's own management, all of whom were non-major shareholder directors appointed by Phil Knight, and the other two were former investor representatives.After becoming a shareholder, Chen Zhiwen also obtained a director seat, a director with actual voting rights.

However, in the case of 5:3, it is actually not very useful, but this is a statement. I still have rights in Nike. Although the board of directors has no role, the general meeting of shareholders is another matter. Looking at the stock quota, 20% is actually 1/5, which is not much different from Phil Knight's 28%.

And as long as Knight follows the contract, after the construction of the Hong Kong factory is completed and sports shoes that meet the requirements can be produced, Nike will hand over half of the order to the Hong Kong factory at the same price, then Chen Zhiwen will give Phil Knight all the voting rights.

The contract lasts for ten years. After ten years, the contract ends. At that time, the two parties will look at the situation at that time and make a decision.

In the next few days, the two parties made their own concessions in terms of details. On December 12, the two parties signed a formal contract:

First: Galaxy Investment Group under Chen Zhiwen acquired a 400% stake in Nike with an investment of 20 million US dollars.

Second: Xinghe Investment bought all the production equipment and facilities of the Nike Group located in the Nike factory at No. 30 Ston Road, a suburb of Portland, for US$27. The building is still owned by Nike. This transaction only involves equipment. Nike The severance of personnel at the factory has nothing to do with Galaxy Investment. Nike needs to ensure the normal transportation of the production facilities and hand over the equipment to Anta Shoes in Hong Kong.

Third: Anta shoe factory can obtain relevant technical authorization from Nike at a suitable price, but it cannot be used in the manufacture of other brand shoes. Anta can also hire Nike engineers to assist in quality production.

fourth:.
The contract between the two parties has a total of 26 detailed issues, involving payment period, quality, production, after-sales, patents, etc., which have certain restrictions on Nike and Chen Zhiwen's Anta shoe factory in Hong Kong.

"Eric, I'm very happy that you can become a shareholder and director of Nike." At the moment the contract was signed, Phil Knight could be regarded as letting go of the stone in his heart. Although he paid a lot of equity, it was also a real deal. The company received 400 million US dollars, and the capital chain crisis and debt problems of the entire Nike Group were completely resolved.

Next, as long as the production department is spun off, and then assist the Hong Kong factory to produce related sports shoes, then the whole Nike will be completely relaxed. You only need to pack lightly and concentrate on R&D and terminal market expansion.

(End of this chapter)