My Lord, you need to stand up!

Chapter 449 Hammer King Lets Wei Dong

Wei Dong's idea was naturally to uphold his original thought of returning to this era!

How did Yu Qili get into the airplane business?

Legend has it that it was obtained by trading canned goods and other light industrial products!
"The problem now is that the more of this joint venture car we sell, the more foreign exchange we have to pay to the US. The sales revenue that the joint venture partners receive in China is useless in RMB. So let's think about it another way, can we share some supplies with them and let them take them back to Citibank to sell, which would then be worth US dollars?"

Everyone was stunned.

Is it that simple?

But why can't we just think about it a little?
What Wei Dong proposed was barter trade, which is a type of trade between local areas, close to border trade and state-planned trade, among the three major types of foreign trade in China.

You're reluctant to give away your precious foreign exchange, so why not just give them the goods? You could take them back and sell them, and maybe even make more money.

But Yu Qili was doing this by making a deal with the collapsing Russians. At that time, the Russians' entire livelihood was on the verge of collapse. They would agree immediately as long as they could have food and drink, which was even more direct than taking money and then finding a source of goods.

This is the US, the country in the sky, what doesn't the US have? The car company is definitely not willing to accept this!

Immediately, someone raised a question.

But it was too late. The two leaders had already shaken hands and exchanged greetings in front of numerous cameras, looked around at the joint venture factory buildings, and started to give explanations and introductions. Just by looking at their steps, they were heading towards the guardhouse.

Wei Dong immediately signaled Qin Yuye to follow the translator on this side.

The official from the Economic Commission trailed off, asking, "Do you think this is feasible? Why would an American company accept this batch of supplies?"

Wei Dong's thinking was: "There has to be someone to handle it. If it's a million-dollar payment, I'll give him a million-dollar worth of goods, and we can even use Citibank for delivery. If he's willing, we can help him sell them. If they sell for 1.2 million dollars, the extra might even be a bonus for the participants."

Someone immediately spoke up: "Isn't this unplanned large-scale trade? In reality, you're taking an extra batch of quotas to export to North America. Doesn't this affect large-scale trade and waste the country's foreign exchange?"

These days, there are export quotas.

Each year, a plan is set for export volume, with allocations made for each industry, each province, and each manufacturer.

The initial goal was to help bewildered manufacturers find sales outlets. State-owned factories wouldn't employ a bunch of international trade salespeople; they relied entirely on channels like Hong Kong and the Guangdong Trade Fair to sell their products.

Later, things improved because it was to prevent price wars between different provinces and industries; in short, the sales rights could only be held by designated units.

Ordinary people have no chance to participate in foreign trade; ordinary foreign trade companies have to beg for various quotas.

That's one of the reasons why the other party let go so quickly after Wei Dong obtained that first-class foreign trade company in Shanghai with complete foreign trade rights.

No matter how powerful you are, you still need quotas. If someone wants to control it, there are still ways to pressure the foreign trade authorities.

Therefore, Qin Yuye's previous jeans exports were all processed through processing orders, not export trade. Instead, HK Colorful Jeans commissioned Jiangzhou Factory to produce and process the jeans, which were then shipped to HK for re-export to Japan or North America.

Wei Dong shook his head: "These are two completely different things. This should be considered a special local trade for the import of auto parts. I am confident that I can organize the supply in China and transport it to North America for sale. It will not affect the export quota of the general trade plan at all. I am also confident that I can persuade the American company to do this barter exchange. Of course, if any department feels it is inappropriate and wants to stop it, then we will not do it."

In the past year of trial production, the Cherokee has assembled 4,000 vehicles. Collins and his team have set a production capacity of 10,000 vehicles per year for this assembly plant.

The Economic Commission's demand was that the total production volume not exceed 12500 units within the next five years!
Isn't that funny?

The joint venture, which cost tens of millions of dollars, had a negotiation requirement that it could not produce more than that, which would amount to more than two thousand vehicles per year over five years.

Decades from now, it will seem unbelievable that a Chinese company would form a joint venture with a less developed country to build a factory.

Now, the only solution is for Wei Dong to come up with a completely new one.

No production capacity restrictions, no use of national foreign exchange reserves, barter trade...

In reality, it means allocating a separate batch of unplanned export quotas for him.

And this quota is particularly high!

Based on the current average selling price of 160,000 per Cherokee, importing parts would cost over 100,000 each, which would amount to 1 billion annually!
Last year, Wei Dong attended the Guangdong Trade Fair and then participated in the summary meeting in Jiangzhou City, right?

The total annual export value of the entire Jiangzhou is only US$12 million, which is less than RMB40 million according to the official exchange rate.

This will allow Weidong to obtain more than 25 times the quota!

The temptation is too great.

This could solve the current foreign exchange shortage problem of the project in one fell swoop.

Finally, someone couldn't help but ask, "What goods do you plan to use for the transaction?"

Wei Dong shrugged: "Clothing, keyboards, mice, computer accessories, and even these X-ray computers we export." Immediately, someone said seriously: "Then aren't you creating vicious competition with the domestic textile industry? Stealing other textile quotas?"

Wei Dong reluctantly revealed a business secret: "Look at my jeans. They sell for twelve yuan domestically, but our production cost is nine yuan and fifty cents. The export version is more refined and costs fifteen or sixteen yuan, but ultimately they are sold to Japan and North America under the HK brand, with a unit price of twenty US dollars. Which textile factory in China can earn such a high profit margin? A profit of ten cents per pair of pants is considered good. This is the difference between brand sales and processing. Which domestic factory have I stolen business from? No factory has this capability. This is the foundation that the Hong Kong businesswoman's family laid in the 1970s to become the 'King of Jeans'."

In 1985, the branding of clothing was a completely new concept in China.

Even though the Trademark Law has just been introduced, branding is not as simple as just having a name and a trademark.

Qin Zhiming's complete brand image and product positioning strategy are something even Uncle De's family couldn't handle.

This allows Wei Dong to know the power of the product, but not the specific methods, while also having access to powerful advertising and promotion, which complements the other two aspects.

The people around me who could hear it all had an expression that said, "I don't quite understand, but I'm absolutely shocked!"
"Is there such a large profit margin gap in branded clothing?"

Qin Yuye skillfully conveyed the message, having Wei Dong nod and point to the computer in front of her. In fact, after exchanging pleasantries and seemingly introducing the computer in the security room, there was no need for Wei Dong to appear; Qin Yuye had already done so effortlessly.

She's been tinkering with these things the whole time.

Then the Citizens' Vice President, who later became President, began walking through the factory area, touring the factory buildings and production lines.

Qin Yuye even became a direct translator for both sides, surpassing the two national-level core translators!
Because the foreign translators weren't as familiar with Beijing and the mainland as she was, and the translators here weren't as familiar with the factory and automotive technology as she was.

The Hong Kong girl, who has always dreamed of performing on a big stage, is incredibly excited!
She was only eighteen years old when she stumbled into this job by accident.

The professional translators on both sides were simply there to check whether what she said was correct.

So Wei Dong pointed to the ubiquitous Jeep logo and said, “We import cars. Car manufacturing is just the hard technology; brand building is the soft technology. The latter is even more valuable and important. It’s just that we’ve neglected it for now because we need to learn the car manufacturing technology first. But looking at all the car brands in developed countries around the world, Jeep is nothing. Why would anyone buy this car in a fair competition? That requires the ability to build a brand. Our team is precisely what we have been learning from Hong Kong and foreign businessmen.”

Some people have already figured it out: "No wonder the sanitary napkin and clothing ads you run on TVB are different from others? They're so memorable?"

Wei Dong nodded seriously: "Yes, this is very important... Oh..."

Everyone looked up with him and exclaimed in surprise.

This CDK assembly line wasn't as ruthless as the later fully automated robotic and electronic arm assembly lines, but it was still a modern assembly line. It involved hanging up cars and then having employees assemble the parts one by one.

Whether someone was trying to sabotage it, or they were just too nervous, or they were careless, the paint on one of the car doors got scratched, but it was still installed on the frame!
Modern automobile manufacturing involves four stages: stamping, welding, painting, and final assembly. This is basically the last step, and even some of the painting and coating are done at Citibank.

In short, it's unclear what went wrong that led to this obviously defective car door appearing on the assembly line.

But it's definitely related to the employee's sense of responsibility.

Collins, who was introducing the big shot, looked utterly miserable!

There were also many cameras and video cameras on site!

Rang Weidong had heard him say last night that this kind of problem is absolutely not allowed in the Hyundai car factory. If it is discovered once, there will be a warning or even a work stoppage, to warn everyone not to make the same mistake again.

But the prevailing attitude in China is that if it's a minor problem, they'll just tap and repair it, or repaint it. Everyone has problems sometimes, after all.

So everyone looked incredibly embarrassed!

Wearing his work clothes, Rang Weidong immediately grabbed a hammer from the workstation next to him, strode over, and smashed the car door flat with a loud bang!

He returned with a serious expression and saluted Collins: "General Manager, according to our production line procedures, we have confirmed the destruction of this defective part. Are there any further instructions?"

Amidst the already somewhat clanging sounds in the factory, hundreds of people from both China and abroad were stunned!
Those shots were even more lifeless.

Only Collins's face quickly thawed, and he immediately smiled as he explained, "Yes! This is an issue we're still working on. Any defective products will be destroyed immediately. Thank you, Pete..."

The Citibank vice president applauded as if it were the most natural thing in the world, and then spoke to the other side: "Very good, excellent. I have served on an aircraft carrier, and behind every process and every regulation lies a lesson learned in blood. Modern production lines are an advanced manifestation of precise coordination..."

All the Chinese staff watched as "Pitt" nonchalantly walked away from the camera and returned to the back of the tour group...

They definitely all had that fearless, "wow" feeling, like a newborn calf not afraid of a tiger.

That's a car door we bought with foreign exchange, and you just smashed it like that?
Even if it's wrong, why not just take it apart and repaint it?

Wei Dong whispered, "This is a common trick in factory management. A foreign expert once discovered a car with serious quality defects and demanded the workers destroy it. The next day, he saw the scrap car was still there, so he picked up a sledgehammer to smash it. A group of indignant Chinese employees rushed up to beat the foreigner up, and the expert had no choice but to give in. If you don't suffer this loss, the quality of this production line will never improve..."

It is said that the root cause of the poor quality of the Pingjing Automobile Manufacturing Plant was planted at this time if Wei Dong had not been involved.

The trick of smashing one's own products to emphasize quality control has indeed appeared repeatedly in the history of industries both in China and abroad. This time, the first blow since China's reform and opening up was dealt to Rang Weidong.

(End of this chapter)