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, which is 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 are more liberal, East Asian countries are influenced by the traditional Oriental culture, and the workers are more industrious and patient. Labor discipline is stronger! More importantly, there is no such troublesome trade union force in the United States!

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!"

Bradshaw and the rest of his fellow RCA colleagues had a look of disbelief in their eyes. For example, the coal trade unions in Britain are now negotiating with Downing Street, and if the British government fails to meet their demands, it is likely that there will be one of the toughest strikes in Britain 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 labor cost accounts for RCA's TV production costs?" asked Li Xuan.

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

This is also due to the fact that RCA has shifted the vast majority of its television production operations to Mexico in recent years. Otherwise, the proportion of labor cost expenditure will be even higher. American workers are paid more than Japanese workers, but they are far less efficient. 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 look of shock. So he curiously asked about the labor cost of the Hong Kong factory.

"Take, for example, the television assembly plant that Mr. Bledsoe just visited. Workers' salaries plus business overheads account for only 3% of the total cost of leaving the 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 the cost can be reduced by 5%, RCA can undoubtedly greatly enhance its competitiveness and start a 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. RCA has a manufacturing base in Taiwan for a long time. If it was possible to enhance competitiveness by simply transferring industries, RCA would have already shifted its production capacity to Asia!

Actually, before RCA. By moving most of the labor-intensive processes, including the assembly of televisions, to Mexico is expected 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 transferring production capacity in a more thorough way?" Li Xuan said as he looked at Bradshaw, "For example, production outsourcing! Mr. Lu's company not only produces its own brand of TVs, but also is responsible for OEM production of displays for Aikang!

RCA wants to defeat the aggressive attack of Japanese companies, and can only match the cost of the other side! American companies are very well-paid and have low productivity. 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's construction of a factory in Mexico is not smooth, 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 none of them are produced by Lenovo itself.

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

Moreover, after cooperating with Lu's Electronics Company on the previous CRT project, RCA actually recognized the management level of this Hong Kong company, which laid a 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 didn't pay much attention to RCA. Even the company's business in Mexico is well known.

What is the deep purpose of his sudden announcement to match 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, but more than half of the company's business still relies on the OEM production of displays for Aikang. And Lu's own TV products are still well-known in Southeast Asia. Only recently has he relied on a good relationship with the mainland government. Gradually broke into the friendship shopping mall system in the mainland.

Last year, the total number of TV sets produced and sold by Lu's company was about 300,000 units. However, although RCA is 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 to subcontract all the TV production to Lu's Electronics Company, even if each TV only earns $10 in foundry fees, Lu Qintian will have at least three or four billion Hong Kong dollars in profits every year, and his current net worth is only three or four billion Hong Kong dollars.

In addition, the order is 4.5 million units per year. It was enough for him to raise the conditions to the most demanding when he held negotiations with the mainland to build a factory. At the same time such a large-scale order. It is also 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. While the company is rapidly expanding its production capacity to seize the market, it has effectively avoided a large number of redundant personnel caused by the company's excessive bloat.

The vigorous development of the OEM industry is actually the product of industrial transfer and division of labor adjustment in the next wave of economic globalization. However, in Hong Kong, due to Li Xuan's butterfly wings, almost all the products of the Oriental Group's 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 studied 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! In the long-term attention to your company, I found that RCA has entered a dead end, that is, it cannot compete with its 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, Magnosque, 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 have to pay a lot of additional costs for RCA, 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 should conform to the trend of global economic development and make its 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 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 incredulous: "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......)