Reborn Industrial Tycoon

Chapter 390 Forced to compromise (please subscribe)

Takamiya looked at the label on the microwave oven with a surprised expression. The words "Made in China" appeared on the Whirlpool microwave oven, completely subverting Takamiya's cognition.

"Am I right? This microwave oven is made in China? Can the Chinese also make a microwave oven?" Takamiya Yuuto said with a look of disbelief.

In the early 1990s, the traditional manufacturing powers of Europe and the United States began to decline. Japanese industrial products had spread all over the world, and Korean manufacturing replaced Japanese products and became synonymous with copycats and low quality.

As for Made in China, what is that?

In the eyes of foreigners, China is probably only capable of producing simple primary products such as clothes and socks, and it also needs to compete with Southeast Asian countries.

It is the norm in China to sell one billion pairs of socks to buy one airplane. Any industrial product with some technical content has nothing to do with being made in China.

Microwave ovens are considered to be products with certain technical content among home appliances. How could they be made in China?

Next to him, Inoue Shigeru explained: "This microwave oven should be made in China. After all, it is a Whirlpool microwave oven. I don't think Whirlpool will deceive American consumers on this matter."

"Can a microwave oven made in China work?" Takamiya still looked doubtful.

Inoue Shigeru said: "I have tried it and this microwave oven can be used normally."

"It's unbelievable. Whirlpool in the United States is actually selling microwave ovens made in China. If I hadn't witnessed it with my own eyes, I would never believe it was true." Takamiya still had a sense of disbelief in his tone.

Shigeru Inoue explained: "It now seems that Whirlpool closed the microwave oven factory in Milwaukee and moved the microwave oven production line to China. It is just unclear whether Whirlpool invested in setting up a factory in China or let Chinese companies manufacture it.

."

But one thing that is certain is that the cost of producing microwave ovens in China must be very low, so Whirlpool has the confidence to keep cutting prices and start a price war with us."

"What you said makes sense." Takamiya Yuuto nodded and continued, "I will report this matter to the headquarters immediately and ask the headquarters to send people in China to investigate this matter."

…

In later generations, a lot of information can be found by searching on the Internet. However, in the early 1990s, information dissemination was not developed, not to mention that China was relatively isolated and not a developed economy. It was very troublesome to obtain China's business information.

One thing.

Fortunately, Panasonic Electric has started its presence in China very early. Panasonic staff stationed in China quickly investigated and found out that it was Li Weidong's Puppy Electric that was manufacturing OEM microwave ovens for Whirlpool.

At the same time, Panasonic staff also discovered that Puppy Electric was actually an OEM factory for Xizhi, producing hair dryers and electric irons for Xizhi.

At the same time, Xizhi Electric Appliances is also having a headache due to the sharp decline in microwave oven sales in the North American market.

"President, we have found the reason why Whirlpool can start a price war with us! They closed the Milwaukee factory and moved the microwave oven production line to China. Now Whirlpool's microwave ovens are manufactured by Chinese manufacturers." The subordinate said.

Reporting.

Tanaka nodded suddenly: "I see, no wonder Whirlpool's microwave ovens have reduced prices. They use Chinese OEMs to reduce production costs. Have you ever investigated how much production costs can be reduced if Whirlpool chooses Chinese OEMs?

?”

"According to our estimates, the processing fee for each microwave oven in the United States is about 45 to 50 US dollars, while the OEM fee for each microwave oven in China is only 10 US dollars," the subordinate replied.

"If we produce microwave ovens in Japan, the processing fee for each microwave oven would be close to 4,000 yen, which is about 30 US dollars. In total, Whirlpool's processing fee for each microwave oven is 20 US dollars lower than ours!"

President Tanaka frowned, and then said: "If it is really this price, we have no chance of winning in a price war with Whirlpool. Is your cost assessment accurate? OEM production in China really only costs 10 US dollars.

Is there any OEM fee?”

The subordinate immediately nodded: "This data is absolutely accurate, because the OEM for Whirlpool is our OEM factory in China, Puppy Electric. At first, Puppy Electric also mentioned it to us, hoping that we could transfer the microwave oven production line

When I went to China, the OEM fee he offered was exactly 10 US dollars!”

President Tanaka immediately recalled this incident. It was he who rejected the proposal at that time because he was worried that the foundry would have too much technology and would pose a threat to Japanese companies.

Unexpectedly, Li Weidong did not give up the microwave oven OEM business, but instead acquired Whirlpool's microwave oven production line and became the OEM of Whirlpool microwave ovens.

As a result, Whirlpool significantly reduced production costs, and then launched a price war in the North American market. As a result, the Japanese microwave ovens were defeated, and there was a strong tendency to drive Japanese microwave ovens out of the North American market.

Li Weidong's backhand slap made President Tanaka extremely depressed.

"I still underestimated that Li Weidong. I didn't expect that he would find another way and find an American!" President Tanaka sighed in frustration.

The production cost of Whirlpool microwave ovens is lower. If the price war continues, Japanese brands will definitely be unable to bear it. And if Japanese brands do not offer lower prices, they will not be able to compete with American brands, and will lose the North American market.

The problem is that with Japan's labor costs, the processing fee for producing microwave ovens in Japan will never be reduced to 10 US dollars. In other words, microwave ovens produced in Japan cannot be cheaper than microwave ovens manufactured in China.

For Japanese brands, the only way is to move the production line of microwave ovens out of Japan and set up factories in places with lower production costs.

"Is it really necessary to move the microwave oven production line to China and hand over our technology to the Chinese?"

President Tanaka felt extremely unwilling, but he had nothing to do.

A market as big as the United States cannot be handed over to others! President Tanaka could only be forced to compromise.

After thinking for a moment, President Tanaka said: "Call Minister Watanabe, he is familiar with the Chinese, and ask him to talk to Li Weidong and try to get a better condition as much as possible!

In addition, I remember that Thailand and the Philippines have always been interested in us setting up factories. We contacted our representatives in Thailand and the Philippines and asked them to talk to the local governments and tell them that we were willing to invest in setting up factories and see if we could get

What a preferential policy!

We cannot put all our production capacity in China, we must have an alternative to disperse our production capacity to other places, so that the foundries will not have too much say. I think Southeast Asian countries are a very suitable place."

…

Li Weidong received a call from Watanabe Yuo.

After the two exchanged pleasantries for a few words, Watanabe got to the point: "Li Sang, are you manufacturing microwave ovens for Whirlpool in the United States?"

"It's true." Li Weidong didn't hide it.

"Then do you know that Whirlpool's microwave ovens have launched a price war in the North American market, leaving our Nishiki microwave ovens in a very passive situation?" Watanabe Ou continued.

"I don't know." Li Weidong continued calmly: "I am an OEM. I am only responsible for the production of products. As for the sales of the products or what kind of marketing strategies the manufacturers adopt, it has nothing to do with me.

Already."

"But if you hadn't manufactured microwave ovens for Whirlpool, Whirlpool wouldn't have launched a price war against us!" Watanabe said in a somewhat arrogant tone.

Li Weidong smiled slightly and said with the same forceful words: "Mr. Watanabe, if you had not entered the North American market, Whirlpool would not have launched a price war against you!"

Watanabe Ou was speechless for a moment and began to quarrel, but Watanabe Ou did not take advantage of him.

Li Weidong then said: "Mr. Watanabe, you didn't call me just to complain, right? You should just tell Xizhi Electric's requirements directly!"

"Okay!" Watanabe Yuo continued: "We, Nishizhi Electric, hope you will stop manufacturing microwave ovens for Whirlpool."

Li Weidong did not refuse immediately, but asked: "Then what can I get?"

"We can increase some orders for hair dryers and electric irons. In addition, we, Xizhi Electric, can also provide you with part of the production business of electric ovens." Watanabe said.

Li Weidong said directly: "Mr. Watanabe, I do OEM for Whirlpool, and the annual OEM fee is more than 5 million US dollars. How much is the OEM fee for these new businesses that Xizhi Electric Appliances gave me?"

Li Weidong provides 200,000 microwave ovens to Whirlpool every year for only US$3 million in OEM fees. He said that US$5 million was deliberately exaggerated by Li Weidong to test the bottom line of Xizhi Electric.

Sure enough, when he heard the figure "5 million U.S. dollars," Watanabe Yu hesitated for a few seconds, and then said: "The new business that Xizhi Electric will give you, although it is less than 5 million U.S. dollars, is about the same. But doing business should be

In the long run, we at Xizhi Electric can give you more orders in the future!"

Li Weidong knew that Watanabe was trying to spread the pie, so he decisively refused: "Mr. Watanabe, I'm very sorry. I have thousands of workers here. They have to eat every day and receive wages every month. If I

If wages are not paid, the workers will stop working immediately and beat me up, so I can't wait for a better future."

Watanabe also knew that it was impossible for Li Weidong to give up OEM work for Whirlpool. His previous request was just a sky-high price, so he lowered his request and continued:

"Li Sang, since you insist on OEM for Whirlpool, I hope you can increase the OEM price, so that our Xizhi Electric microwave oven will be more competitive in price."

Li Weidong still did not refuse immediately. He said, "According to the contract I signed with Whirlpool, we will renegotiate the OEM price every three years. If I change the OEM price in advance, I will pay a huge liquidated damages. Please ask Xizhi

Are you interested in electrical appliances and helping me pay the liquidated damages?"

"How much is the liquidated damages?" Watanabe asked subconsciously.

"After changing the OEM price, the difference will be 150%! What I mean is that if I increase the OEM fee by US$10, I will have to pay Whirlpool US$15 in liquidated damages."

Li Weidong laughed and continued: "I think Whirlpool would be happy for me to raise the price, so that they can make a profit."

Upon hearing the 150% penalty for the difference in price, Watanabe once again fell into silence.

Li Weidong felt that the time was almost up, so he said: "Mr. Watanabe, actually I have a better proposal that can solve your trouble.

Your Xizhi Electric appliances only need to transfer the production line of microwave ovens to China and leave it to me. I can guarantee that the OEM fees I charge will definitely be lower than those of Whirlpool.

In this case, the production cost of your microwave oven will be lower than that of Whirlpool's microwave oven, making it more competitive in the North American market!"

Watanabe Xiong pondered for a moment and then said: "Li Sang, to be honest, you are not our only choice for Xizhi Electric. We have contacted the governments of Thailand and the Philippines, and they are very interested in us setting up factories.

Moreover, both Thailand and the Philippines are willing to give us preferential conditions. The labor costs in Southeast Asian countries are also very cheap. If we move the microwave oven production line to Southeast Asia, we can still achieve low-cost production!

In addition to microwave ovens, the hair dryers and electric irons you are currently manufacturing for us may also be moved to Southeast Asia, and you will lose big customers like us by then."

Li Weidong realized that Watanabe Yui disclosed this information to him, which contained a threatening meaning, but it was by no means aimless.

Before the Asian financial crisis, Japan was investing crazily in the Asian Tiger countries. It is certain that Nishizhi Electric will move its production center to Southeast Asia.

However, he did not succumb to Watanabe's threat. He knew that when the Asian financial crisis came, almost all Japanese investments in Southeast Asia became a burden, so Li Weidong was not worried about Xizhi Electric's investment in Southeast Asia.

So Li Weidong said: "Mr. Watanabe, you should be very clear about how profitable a microwave oven is. An ordinary hair dryer can sell for one thousand yen in Japan, while a microwave oven can sell for 60,000 yen in Japan!"

Selling one microwave oven is equivalent to selling 60 hair dryers. Do you think I would give up the microwave oven for the hair dryer?

What's more, if you directly hand over the microwave oven production line to me and let me do the manufacturing, you can keep the microwave oven market without losing the hair dryer market. This is a win-win situation, why not do it!"

Watanabe was silent for another moment, and then asked: "If we hand over the production line to you, how much will you charge for the OEM fee?"

"Each microwave oven is 15 US dollars!" Li Weidong continued: "I can tell you another news, Whirlpool's OEM fee is 25 US dollars!"

Regarding the OEM fee, Li Weidong lied again in order to raise the price and prevent Watanabe Yu from lowering the price.

But Watanabe Yuo immediately said: "What you mentioned before was the OEM fee of 10 US dollars!"

"This is the same thing as that! At that time, I had not yet OEMed for Whirlpool, so I only charged an OEM fee of 10 US dollars. But now, by OEMing Whirlpool's microwave ovens, our technology has grown a lot, and the OEM fee will naturally be higher.

Increase." Li Weidong said without blushing or heartbeat.

"President Tanaka didn't even agree when it was $10, but now it's $15, and President Tanaka is even less likely to agree! With your price, there's no way I can report it to President Tanaka!" Watanabe Oo replied.

.

Li Weidong pretended to be thoughtful and quiet for a few seconds, and then he said: "Well, considering that we have cooperated for so many years, I will still give you an OEM fee of 10 US dollars, so that you have plenty of room for price reduction.

, can cope with Whirlpool’s price war! But this is already the lowest price I can give you.”

Watanabe Yuo pondered for a moment, and then said: "Okay, I will report to President Tanaka."

…

After going around and around, although the OEM fee was still 10 US dollars, it blocked Watanabe's mouth and made him unable to lower the price.

Li Weidong was willing to pay Watanabe Yu a US$10 OEM fee in order to obtain the microwave oven production line of Xizhi Electric as soon as possible.

Because Li Weidong knew that the price war for microwave ovens would begin in two years. The price of a microwave oven that originally cost 3,000 yuan would be reduced to 300 yuan. More than 100 microwave oven manufacturers across the country would also be knocked down by less than 30 companies.

If Li Weidong wants to survive in the price war, he must first cultivate his internal strength.

This internal strength is not only about technology, but also about production capacity. If in two years' time, the annual production capacity of Puppy Electric's microwave ovens does not reach 1 million units, it is estimated that it will not even be qualified to participate in the price war and will be eliminated from the battlefield.

According to Li Weidong's understanding of large Japanese companies, it may take a long time for Xizhi Electric to make a decision on matters such as relocating the microwave oven production line.

The efficiency of the Japanese is actually not high, but they are very good at execution. Once the Japanese are given a prescribed process, they will execute it meticulously, and will not take shortcuts even if there are shortcuts.

There are many business management tools in Japan, which are studied all over the world. However, if you analyze these management tools carefully, you will find that all management tools have SOP at their core, which is standard operating procedures.

Such standard operating procedures help with execution, but they do not help with decision-making.

Someone once ridiculed that the most inefficient place in Japan is the National Assembly. No matter what matter, once it enters the Japanese National Assembly for decision-making, it will enter a long waiting period.

However, Japan's Congress has gathered a group of Japan's most elite people. When such a group of elites come together, it takes the slowest time to make decisions. This is also a major characteristic of Japan.

This culture of being good at execution but not good at decision-making has also penetrated into Japanese companies.

In the era when chaebol directly controlled companies, there was no such difficulty in decision-making. Japanese companies at that time were still very capable of decision-making.

After the end of World War II, Japanese chaebols gradually retreated behind the scenes, and the decision-making capabilities of Japanese companies began to slowly degrade. Especially after the standard operating procedures became popularized, Japanese company decision-makers began to solve problems according to standard operating procedures.

In standard work, we must first identify the problem, then observe the problem from different departments and different angles, contact people related to the problem, collect information and study the problem to ensure that we can fully understand the problem, and then start to enter into solutions to the problem.

.

Theoretically, this standard operating procedure is very rigorous in solving problems. However, after each procedure is executed, the efficiency becomes low.

For example, if you find that the ground is too slippery, the Chinese will probably put up a "Slip with caution" sign to remind people passing by.

The Japanese need to study what material the floor is made of, which direction is more likely to slip, how men feel about the ground being too slippery, and how women feel about the ground being too slippery. What happens if someone slips?

Should the head hit the ground first or the butt first? Should I be sent to the hospital? Should I be compensated?

After a series of studies, we finally decided to put up a "Slip with caution" sign to remind people passing by.

This is Japan's decision-making model, which operates entirely in accordance with standards. Although it is very rigorous, it is extremely inefficient.

Today's update is delivered. Thank you for your subscription. I temporarily revised the plot and moved a written plot to the back. As a result, there are only more than 5,000 words left. At the beginning of the month, please give me a guaranteed monthly ticket. Thank you for passing the test.

.