Wind and rain Holdings does not want any of their employees, and Tong Yong had never thought of this condition. Malfoy had prepared a lot of things for the negotiation, but all his plans were disrupted.
Back at the company, Malfoy reported this matter to the board of directors. Ralph's attitude was unyielding. If they did not agree to this condition, they would not discuss anything else.
Tong Yong's biggest problem now is the salaries of his employees. In 1998, Tong Yong's employees went on strike, and 70,000 to 80,000 workers joined hands. The whole of Detroit was affected.
And this strike also caused Nissan Motors to lose more than 2.2 billion USD. In the end, Tong Yong's management decided to compromise and signed a new labor contract with their employees, increasing their average salaries again.
Toyota and other automobile manufacturers' average hourly salaries in the US are around 25 USD, and Tong Yong's employees are getting more than 70 USD. Automobile companies have high labor, capital, and technical requirements, and Tong Yong's production cost is much higher.
Also, Tong Yong's employees are less than 150,000, but there are more than 300,000 retirees. The number of people they have to pay for health insurance and other expenses, including the employees' family members, is more than 1 million!
Just the cost of medical insurance alone was enough to stretch the funds used at the same time, not to mention the fact that other benefits could not be reduced.
Tong Yong had thought of moving their factories to Brazil, Mexico, or Asia to reduce their labor costs. But the workers went on strike, and Tong Yong gave up on this idea.
Feng Yu found it funny when he saw Tong Yong's documents. The children of Tong Yong's employees can get priority to work in Tong Yong. This is similar to Hua Xia's system of succession in state-owned enterprises.
Hua Xia had abolished this system because it will lower the company's competitiveness and increase the company's cost. The number of retirees will increase, and it will increase the company's burden.
Tong Yong's employees have to pay about 4,000 USD for health insurance, pension, and union expenses for every vehicle they manufacture. Feng Yu is not willing to bear this high cost.
Feng Yu is sure no other automobile manufacturer is willing to bear this cost. How much is a vehicle's profits? This is more than double of other automobile manufacturers' profits.
Bing City Machinery Manufacturing Group's Elfin is selling for less than 3,000 USD. How much can the profits be?
Does Tong Yong want to spend one to two thousand USD to enter the US market without making any profits? That would not be expansion, but courting death.
Tong Yong's current predicament is also because of Feng Yu. First of all, their joint venture car factory in Shanghai had less shares than in Feng Yu's previous life, but they had invested a lot.
First, Tong Yong pointed out that the US, which has 5% of the world's population, owns 30% of the world's cars. But GM owns about one-third of the world's CO2 emissions.
The US, which had 5% of the world's population, had 30% of the world's cars. Carbon dioxide emissions accounted for 45% of the world's emissions, and General Motors accounted for almost a third of the emissions.
The US government had also responded and encouraged everyone to drive smaller cars. This made General Motors, which specialized in larger cars, at a loss.
In fact, after oil prices had risen again last year, the world had entered an era of high oil prices. Families were more inclined towards small, high-efficiency cars. Traditional high-displacement American cars were gradually losing market share. Not only cars of the same type, but also Ford cars.
During this period, Japan's Toyota and Honda's sales have been increasing. This is because they are focusing on small, energy-efficient cars in the US. This is also the area where Japanese cars stand out.
Feng Yu remembers in Feng Yu's previous life, after Obama took office, the US government passed some laws to set standards for energy efficiency and emissions reduction.
Now, Obama had announced his candidacy for this term's President, and Feng Yu had asked Ralph to support him. What Feng Yu is doing now is helping Feng Yu.
Tong Yong's current predicament is also related to the US government's policies. The US government is responsible for the high salaries and benefits of US workers. And it wouldn't be long before there would be something that the people would love to see. That was, Detroit, the car city of the United States would go bankrupt!
City going bankrupt is a new term at that time. When the US government announces its bankruptcy, the US people are no longer surprised.
Feng Yu had predicted Tong Yong's multi-brand strategy. This will cause Tong Yong's brands to lose their focus and cannot cooperate effectively. In the end, their core brands will be weakened.
Furthermore, Tong Yong also wants to manufacture airplanes and acquire aircraft companies, aircraft companies, etc. This will cause the company's core business to shift.
Tong Yong doesn't know about multi-brand cooperation? Of course, Tong Yong knows about this and had tried. But to Feng Yu, their attempts are laughable.
Tong Yong owns spare parts companies, engine companies, etc. For the sake of cooperation and cost reduction, Tong Yong uses the same production platform and spare parts for all its brands. High-end cars, mid-range cars, and low-end cars all use the same spare parts.
This causes the high-end cars to be no longer high-end. Consumers are disappointed, and it also hurts Tong Yong's original strategy of having five brands.
In Feng Yu's eyes, Tong Yong's bankruptcy is only a matter of time. Even without this sub-prime mortgage crisis, Tong Yong will still be finished.
They had less than 100 billion USD in assets, but they were already burdened with more than 150 billion USD in debt. The debt ratio was too high, and just the interest alone was an astronomical figure. Not to mention the rising salaries, pensions, medical insurance, etc.
During this period, Ford Motor has already taken some countermeasures. For example, they laid off the top management and stopped the car loan business. This is because too many people can't repay their car loans.
Like Tong Yong, Ford also has a finance company. But they only deal in car loans and not real estate loans. This makes them more resistant to risks during the sub-prime mortgage crisis.
Also, Ford has the world's largest car rental company. This means that those who can't repay their loans can continue to earn profits from the rental company, indirectly reducing Ford's losses.
The top three US automobile companies, Tong Yong, Ford, and Chrysler, are all in trouble now. Feng Yu is actually interested in their brands.
Malfoy is still following the board's request to suspend the negotiations with Wind and Rain Holdings, but he heard that Ford Motor went to Wind and Rain Holdings.
This news shocked Tong Yong's board of directors!
…
You've already exceeded your reading limit for today. If you want to read more, please log in.
Login
Select text and click 'Report' to let us know about any bad translation.
