A row of black cars drove into the Zhuyuan Hotel, one of the earliest Sino-foreign joint venture hotels in the Shenhai Special Economic Zone, and one of the best hotels in Shenhai City. According to international standards, Zhuyuan Hotel is at most a three-star level, but the few guests who got off the bus obviously didn't care so much.

"Mr. Bradshaw, how do you feel after visiting our two factories?" Li Xuan asked with a smile.

Li Xuan has just accompanied Thornton Bradshaw, chairman of RCA in the United States, to visit the joint venture picture tube factory in Shekou Industrial Zone, as well as the television assembly plant of Lu's Electronics Company, another company not far from it.

"The workers here are so enthusiastic and disciplined that I feel like I'm visiting a Sony factory in Japan!"

Li Xuan saw the look of amazement on the other party's face, and knew that his statement was a bit exaggerated. He shook his head and said, "Compared to the Japanese people's lean, efficient and respectable and terrifying production efficiency, we still need to improve a lot." Of course, Mr. Lu's company invited the Japanese management team to help improve the management efficiency of the factory in the early days, and they also learned a lot of essence from the Japanese!"

Lu Qintian's English level is very average, and he needs his son to gently translate the conversation between Li Xuan and Bradshaw on the side. He humbly waved his hand at Li Xuan, indicating that his company was not as good as Li Xuan said.

Li Xuan smiled and continued: "But compared with the Americans, who pursue individuality and independence and are more willing to be liberal, East Asian countries are influenced by the traditional Oriental culture, and the workers are more industrious and patient, and the labor discipline is stronger! More importantly. There is no such headache as the American union forces here!

I was wrong, but in fact there are socialist trade unions in China. But unlike their American counterparts, who often go on strike to demand wage increases. The main tasks of the Chinese trade unions are to organize theatrical performances, distribute subsidies for high temperatures in summer, and be responsible for the work of logistics departments such as weddings, funerals, and condolences for employees!"

There was a look of disbelief in the eyes of Bradshaw and the rest of his fellow RCA people. For example, the coal trade unions in Britain are now negotiating with Downing Street. If the British government fails to meet their demands, it is likely that a strike in Britain will be the harshest in decades. Hundreds of thousands of coal companies are ready to take to the streets to protest the Thatcher cabinet's policy of privatizing the coal industry.

"Mr. Bradshaw, how much of the production cost of RCA's TV is the labor cost?" asked Li Xuan.

This is not a number that needs to be kept secret, so Bradshaw replied cheerfully: "The cost of workers and the cost of management combined, up to 15 to 20 percent!"

This is also because RCA has shifted the vast majority of its TV production operations to Mexico in recent years, otherwise the proportion of labor costs will be even higher. American workers are paid more than Japanese workers. Labor efficiency is far inferior. This has caused a huge impact on American companies in one industry after another, including televisions, automobiles, and photocopiers.

Bradshaw found that this time it was all the Hong Kong personnel who showed a shocked look, so he curiously asked about the labor costs of the Hong Kong factory.

"In the case of the television assembly plant that Mr. Bledsoe visited just now, the cost of workers' salaries plus the overhead of the business accounted for only 3% of the total cost of the television factory. Even if the labor and production costs of key raw materials such as picture tubes are included, it will not exceed 10%!" Lu Qintian opened his mouth to explain.

That is to say, under the same conditions, the TV set produced by Lu's Electronics Company can save at least 5% of the cost compared with RCA Company. RCA's profit margin on TV products is usually only about 10%. If you can reduce the cost by 5%. RCA can undoubtedly greatly enhance its competitiveness and engage in a hand-to-hand price battle with Japanese companies!

"Hasn't RCA considered moving production capacity to Asia, where production costs are lower?" Li Xuan said from the perspective of RCA.

Of course, things are not as simple as they seem, and RCA has long established a production base in Taiwan. If it is simply a matter of industrial transfer, competitiveness can be enhanced. RCA has already shifted its production capacity to Asia!

In fact, RCA moved most of the labor-intensive processes, including TV assembly, to Mexico. It is the expenditure that wants to reduce labor costs. Although it has had a certain effect, it still cannot fundamentally reverse the cost disadvantage of RCA in the competition.

"Has RCA considered it. Transfer production capacity in a more thorough way?" Li Xuan looked at Bradshaw and said, "For example, production outsourcing! Definitely has noticed. Mr. Lu's company not only produces its own brand of TVs, but also is responsible for OEM production of displays for Aikang!

If RCA wants to defeat the aggressive attack of Japanese companies, it can only match its counterparts in terms of costs! American companies are very well-paid and have low production efficiency. But Mr. Lu's company is different, and perhaps Lu's Electronics Company is not comparable to Japanese companies in terms of production efficiency, but Mr. Lu's factory has a lower salary expenditure.

In the two factories we just visited, the monthly wage of each ordinary worker was only 240 yuan, which is equivalent to about 120 US dollars, which is only one-tenth of that of American workers!

I've heard that RCA is not going well to build a factory in Mexico, because Mexico is not only politically unstable, but also lacks qualified industrial workers! In fact, RCA does not need to build its own factory at all, but should pass on the production risk.

I think you can talk to Mr. Lu about the lowest price he can give you if your company outsources all the TV production contracts to him, and I guess it will be cheaper than the cost of your own production in Mexico!"

The people present all fell into thought after listening to Li Xuan's words. The foundry model of the electronics industry in later generations has been very mature. For example, the famous Foxconn, the world's "kidney machine" is made by it for Apple. Another example is the Lenovo computer we use, almost all of which are not produced by Lenovo itself.

Bradshaw glanced at Li Xuan deeply. He was quite interested in Li Xuan's suggestion. Outsource the production of the entire product, without having to bear the risk and cost of building a factory. This will undoubtedly allow RCA companies to get rid of their burdens and travel lightly.

Moreover, after cooperating with Lu's Electronics Company on the previous CRT project, RCA Company actually recognized the management level of this Hong Kong company. This has laid the foundation of trust for the continued cooperation between the two sides. But Bradshaw was a little puzzled by Li Xuan's intentions, and as far as he knew, the Eastern Bloc did not seem to have any intention of getting deeply involved in the television industry.

For example, in the previous CRT project, Dongfang Company only played the role of a major shareholder and financial supervisor, and did not care about gaining the leading power of enterprise management. And Li Xuan's words just now revealed that he is not a lot concerned about RCA, and even knows the company's business in Mexico very clearly.

What is the deep purpose of his sudden matchmaking of the in-depth cooperation between RCA and Lu's Electronics? Bradshaw has never believed that there is love in the world for no reason. If the other party doesn't have its own purpose, why bother to take care of other companies' affairs!

And Lu Qintian was also a little surprised at the same time, but he was more excited. Don't look at the rapid development of Lu's Electronics Company in the past two years. However, more than half of the company's business still relies on the OEM production of displays for Aikang. Lu's own TV products, which are still well-known in Southeast Asia, have recently relied on good relations with the mainland government to gradually enter the mainland's friendship shopping mall system.

Last year, the total number of TV sets produced and sold by Lu's company was about 300,000 units. However, although RCA has been in the United States, the world's largest consumer market, the share of TV sales has fallen again and again, from 45% at its peak to 20% now. However, RCA's total annual sales of TVs still reached 4.5 million units, which is 15 times that of Lu's company.

If RCA is really willing, it will subcontract all the TV production to Lu's Electronics. Even if he only earns $10 in foundry fees for each TV, Lu Qintian will have at least three or four billion Hong Kong dollars in profits every year, and his entire net worth now is only three or four billion Hong Kong dollars.

And the annual order of 4.5 million units is enough for him to hold negotiations with the mainland to build a factory. Raise the conditions to the most demanding. At the same time, such a large-scale order is enough to maximize the advantages of large-scale production. Lu Qintian is confident that the current manufacturing cost will be further reduced.

Li Xuan also took his own company as an example to introduce Aikang's experience in outsourcing the production of ABC series computers. At the same time, Aikang company is rapidly expanding production capacity to seize the market. The outsourcing of production effectively avoids the large number of redundant employees caused by excessive bloat of the company.

The boom of the OEM industry. In fact, it is the product of industrial transfer and division of labor adjustment in the next wave of economic globalization. But in Hong Kong because of Li Xuan's butterfly wings. Almost all of the products of the Oriental Group, such as personal computers, arcade machines, home game consoles, handheld game consoles, etc., adopt the OEM production model.

With the rapid development of the Oriental Group, all the electronics factories involved in OEM production have also taken a piece of the pie, making this model widely accepted in Hong Kong. For example, in addition to Oriental games, there are six or seven arcade companies surviving in Hong Kong.

Although the game consoles of these companies have not sold as well as the Oriental game companies all over the world, they have at least a certain sales channel in Hong Kong, as well as in nearby markets such as Taiwan and Southeast Asia. These companies also did not produce their own arcade machines, but outsourced them like Oriental Game Companies. In this way, even only four or five people can support an arcade R&D company, which greatly reduces the threshold for entering the industry.

"Mr. Li, the proposal you proposed earlier is very valuable to RCA, but what is your purpose?" Bradshaw asked with some curiosity as he walked next to Li Xuan before dinner.

"Would you believe me if I said I just wanted to win your friendship, Mr. Bradshaw?" Li Xuan said with a smile.

"Just call me Thornton, our friendship doesn't deserve to be so closely researched by RCA!" Bradshaw said, shaking his head.

After Li Xuan left, he carefully pondered Li Xuan's previous conversation in the room, and felt that Li Xuan's suggestion was by no means improvised, but seemed to have carefully studied the situation of RCA Company.

After all, I have not cooperated with you a lot, such as CRT projects, semiconductor projects, and liquid crystal projects! And in the long-term attention to your company, I found that RCA companies have entered a dead end, that is, they cannot compete with their Japanese counterparts in terms of cost control!

This has led your company to be at a loss in the face of the price war of Japanese companies, and can only watch as its market share is eroded by Japanese companies little by little! Go back 15 years, when Japanese television sets were almost negligible in the American market. At that time, RCA's competitors were American appliance manufacturers such as Westinghouse, General Electric, Filkau, Motorola, Magnosk, and Emerson.

But now, Westinghouse and Motorola have exited the TV business, General Electric is ready to sell their TV divisions, and other companies are either going bankrupt or being bought!

Although wages in Mexico are much lower than in the United States, Mexicans are even less disciplined than in the United States. Moreover, the political turmoil and government corruption there are many additional costs for RCA companies, which negates the advantages of cheap labor!

So in my opinion, Mexico is by no means a good choice! The future of RCA is in Asia, in fact, the rise of the Asian tigers has heralded the beginning of the industrial transfer of the world economy. It's just that the light industry represented by textiles and garments was transferred before.

At present, including Taiwan, Hong Kong, and South Korea, they are all facing the problem of industrial upgrading and transformation, and the future of transformation is the electronics industry represented by televisions! RCA companies should conform to this trend of global economic development and make their own changes!" Li Xuan said loudly.

But after all that, he still didn't reveal his ultimate purpose, so Bradshaw continued to look at him with a smile.

"Okay, my purpose is to hope that the Eastern Bloc can cooperate with the RCA in depth!" Li Xuan finally said.

"More in-depth cooperation?" Bradshaw chewed on the meaning of Li Xuan's words, "TV field?"

Li Xuan nodded and shook his head again. Just when Bradshaw was a little confused, Li Xuan said something that made him a little unbelievable: "If I say that Dongfang Electronics Company wants to acquire RCA Company, will you think that I don't know the sky?" (To be continued......)