Broadly speaking, the arsenal refers to all military factories, but in the Empire, the arsenal generally refers to the ammunition factory. This is because in the early thermal weapons wars, muskets were made in handicraft workshops, and the officers and soldiers of the imperial army were equipped with their own weapons, and there was no concept of "arsenal" at that time. It was not until the Imperial Army used the first custom-packed ammunition wrapped in kraft paper that mass production of ammunition began, so the arsenal at that time was the factory that produced ammunition. This appellation continued, and the arsenal specifically referred to the ammunition factory.

Before the outbreak of the war, the main ammunition supplier of the Imperial Navy was the Qingdao Arsenal, which was also the only large arsenal at that time, in addition to supplying the navy, it also had to undertake part of the army's ammunition production tasks. The main reason for the small number of arsenals is that in peacetime, the army does not consume a lot of ammunition, mainly in training and exercises, and in many cases, in order to save money, the training is not used regular ammunition, so the demand for ammunition in the army and navy is not high. In addition, ammunition is being replaced quickly, especially for artillery and firearms. If the army and navy adjust the caliber of artillery and firearms, then the previous ammunition of different calibers will basically be scrapped, which is a huge waste. Coupled with the fact that the production of ammunition itself is quite fast, there is no need to stock up on a large number of ammunition and then wait to be eliminated and scrapped.

After the outbreak of the war, the focus of production at the Qingdao Arsenal gradually shifted to ammunition for the Navy, and from the beginning of 23, ammunition was no longer supplied to the army. At the same time, the scale of Qingdao Arsenal has also expanded a lot, and even a large number of supporting factories have been built around, such as the chemical plant in Lianyungang, located in Zibo, and a steel plant connected by a special railway. Later, there were also electronic factories and lathe factories in Jinan, and so on. However, an arsenal is obviously unable to meet the needs of the navy for ammunition, and in the two years from the end of 21 to the end of 23, there are four other arsenals that have entered the list of naval suppliers, and they have all rapidly developed into large arsenals, these four arsenals are Qinhuangdao Arsenal, Nantong Arsenal, and Xiamen Arsenal. and Zhanjiang Arsenal. Like most munitions factories serving the navy, these arsenals are located near ports and not far from the source of raw materials.

The development scale of the four new arsenals is very fast, but it still has not replaced the position of Qingdao Arsenal, because Qingdao Arsenal is also developing rapidly. Unlike shipyards and aircraft factories, arsenals produce munitions. There are no civilian products, so they can survive only on orders from the army, and shipyards can survive by building civilian ships, and aircraft factories can survive by creating civilian aircraft. In addition, the gap between the amount of ammunition required in wartime and the amount required in peacetime is considerable. The navy can support more arsenals because of the needs of the war, but at the same time, after the end of the war, the arsenals will also go bankrupt due to the reduction of the navy's military spending and the need for large quantities of ammunition. Because of these two distinctive characteristics, the competition between the arsenals was even more intense, and if the navy kept only one arsenal after the war, then the other four arsenals would all go bankrupt, and who would have performed the best during the war. Then whoever will be retained will have a chance to survive.

This characteristic determines that it is difficult for the five arsenals to form a substantive industrial alliance, which is also the entry point between Gan Yongxing and Tan Renhao in the negotiations. In addition, the Navy has signed 27-year intent purchase contracts with other suppliers, and there is a precedent, which is equivalent to a signal of the Navy's new annual procurement method, so that the arsenal is ready in advance.

"In general. Excess of our ammunition production capacity. "On the plane, Gan Yongxing didn't waste time and asked Tan Renhao to grasp as much of the situation as possible." In the past, we had been supplying ammunition to the Persian and German navies, especially since our Strategic Strike Force was deployed to the European theater of operations. At present, the ammunition factory on the German side has completed the construction of a new production line. Under our new agreement with Germany, we will supply ammunition to Germany's Far East Fleet, and Germany will supply ammunition to the Strategic Strike Force in exchange. Other than that. The competition among the five arsenals is quite fierce, and all have excess capacity. This is where we can take advantage. ”

"How much excess capacity is there?"

"There are no three percent, there are two percent."

Tan Renhao thought for a moment. "That is, if we order in 27 in equal quantities to 26, then we only need four arsenals to be enough?"

Gan Yongxing nodded. "Let's not bring this up first, those manufacturers know it in their hearts. And, after reaching their maximum yield, they still have some room for improvement. Judging by the 27 years of combat operations that are now planned, the consumption of ammunition will not increase much compared to 26, but the consumption of special ammunition will increase. And special ammunition has always been the most profitable, so we have to find a way to keep the price of special ammunition down. ”

"Then we have to use the existing excess production to drive down prices."

Both of them laughed, they felt that they were becoming businessmen, that they were learning how to bargain with others, and that perhaps the Navy needed some people who knew how to bargain.

While Gan Yongxing was lying on the chair to recuperate, Tan Renhao seized the time to familiarize himself with the situation in those arsenals. The main reason for the addition of four new arsenals in the Navy was to facilitate the supply of ammunition to combat units on the ground in all directions, because compared to aircraft, ships need to deliver ammunition, and the time requirements are quite high. At the height of the war, between '22 and '24, almost as soon as the ammunition rolled off the assembly line, it was loaded onto cargo ships and transported to the front. At that time, many ammunition carriers docked at Qingdao Port, and after the incendiary bombs were produced, they were immediately loaded onto ships and then transported to front-line airfields, and these ammunition were dropped on the Japanese mainland in less than ten days.

The two received the highest standard reception in Qingdao, and the Qingdao Arsenal even arranged special personnel to take care of Tan Renhao and Gan Yongxing, but at Gan Yongxing's insistence, the two still lived in the naval office and did not go to the hotel arranged for them by the factory. The next day, the officer corps of the Navy command arrived, and negotiations began quickly.

There are similarities and differences between this negotiation and the previous one.

What is the same is that both sides have contradictions on the details, especially in terms of the cost of ammunition, and the method advocated by the Navy is not exactly the same as the one insisted by the manufacturer, so the calculated cost price is not exactly the same. There is also a problem with the method of calculating the profit margin, the Navy advocates calculating the profit on the basis of the cost price, while the manufacturer advocates calculating the profit on the basis of the sales price, which may not have a great impact on the unit price. However, on the basis of a huge purchase quantity, a small change in the unit price will bring about a huge change in expenses. Of course, the biggest problem is still in the unit price of ammunition. The Navy thinks that it should be reduced by at least 20% to 30% on a 26-year basis, while the manufacturers think that a reduction of 1% is quite good, and if it is reduced by 20%, they will have to operate at a loss.

Gan Yongxing and Tan Renhao negotiated with Qingdao Arsenal and Xiamen Arsenal respectively. These were the two largest arsenals at the time. This can be regarded as a break. Relatively speaking, Gan Yongxing and Tan Renhao were not in a hurry, because the Hawaiian Islands campaign originally planned to be launched in 26 was postponed to 27, so there was a surplus of ammunition ordered in 26, and the ammunition stored in the navy's ammunition depot could still last for a month or two. And manufacturers are in a hurry. 26 years of production is coming to an end, and if they can't reach an agreement in December, they won't be able to get orders for 27 years, and they won't be able to start 27 years of production activities, and they won't even be able to get enough raw materials and energy supplies!

This is another weight in the hands of the Navy. After the empire's economic system entered a state of war, although all supplies still had to be purchased with money, in the absence of orders, even money could not buy supplies. At that time, almost all military factories had to get orders from the army first. Then apply to the relevant departments of the government to purchase materials, and only after getting the government's approval can you go to the raw material factory to purchase materials. In addition, the supply of electricity, water, etc. is also determined by the order, how many orders there are. You can get as much material and energy as you want, and without orders, the government won't distribute goods and energy to factories. Therefore, in the absence of an order from the Navy, it is impossible for any plant to hoard a large amount of supplies, or even to get a supply of electricity, it is impossible to start production!

This can be said to be the dead end of all factories, and Tan Renhao and Gan Yongxing used this trick in the previous negotiations. Every year before December 15, the factory has to submit its next production plan to the government. Apply for material and energy distribution. And it's already early December, if these manufacturers can't get the Navy's order before the 15th. Then its production in the following year will be affected.

Under the influence of various factors, the Qingdao Arsenal and the Xiamen Arsenal first softened. The two arsenals and their main downstream manufacturers first reached an agreement with the Navy and received orders from the Navy. This is also different from other agreements, the Navy's agreement is signed with dozens of manufacturers, mutual constraints, mutual commitments, to ensure that the production of ammunition can be carried out normally, and at the same time more reasonably control the price of ammunition.

Subsequently, the Nantong Arsenal and the Zhanjiang Arsenal also reached an agreement with the Navy, and the content was basically the same, still led by the Arsenal, and several, or even dozens of downstream manufacturers, signed an intention to produce orders with the Navy. The Qinhuangdao Arsenal was finally excluded from the list of naval suppliers, and more than a dozen downstream manufacturers cooperating with the Qinhuangdao Arsenal also lost orders from the Navy, waiting for the results of these arsenals to go out of business. Perhaps the workers could find work in other factories, and for the capitalists of these factories the result was bankruptcy.

Relatively speaking, it is really not easy to significantly reduce the purchase price of ammunition, mainly because it is impossible to cover the losses of factories through large-scale exports. Therefore, it is impossible for manufacturers to trade at a loss here in the Navy. In addition, the amount of ammunition purchased is extremely large, and the flexibility of procurement is also very large, which is most obviously affected by the war situation, and in the case of the inability to determine a relatively accurate order quantity, it is even more impossible to reduce the price through mass production.

After reaching an agreement with the four arsenals and the corresponding downstream manufacturers, Gan Yongxing and Tan Renhao returned to the naval headquarters on the 13th. The harvest of the two did not achieve the expected goal, but it was not small. In particular, significant concessions have been made by manufacturers with regard to the ammunition that is most consumed.

In terms of the total price of ammunition consumed, among the dozen or so types of ammunition that the Navy needs to procure, the first place is artillery shells, including mortar shells used by the Marine Corps. In second place are aerial bombs. In third place is rockets. Fourth place is bullets. In fifth place is torpedoes, including aviation torpedoes and heavy torpedoes. Therefore, the negotiations focused on these five aspects, especially the price of shells and bombs.

At that time, the most consumed artillery shells by the Navy were 155 mm high-explosive shells, which were the main ammunition for ground support, and the Marine Corps also had quite a few 155 mm guns with universal ammunition. And before that, the price of a 155 shell was 200 yuan, and in 26 years, it cost more than a billion just to purchase 155 shells! As a result, in the 27 years of orders, the manufacturer reduced the price to below 120 yuan, which exceeded Tan Renhao's advance estimate.

In terms of bombs, the most commonly used are 250 kg and 100 kg high-explosive bombs, which are also mainly used for ground support. In 26, a 250-kilogram bomb was 750 yuan, and a 100-kilogram bomb was 550 yuan. As a result, in the 27 years of orders, the manufacturer reduced the price to 450 and 300 yuan, which also exceeded Tan Renhao's advance estimate.

These three types of ammunition alone will be able to save the Navy at least 1 billion yuan in procurement costs in 27 years. Counting the savings from other ammunition purchases, the Navy is expected to save about $2.5 billion in ammunition purchases in 27 years. Although this is less than the cost savings of the two purchases of aircraft and ships, the consumption of ammunition is not fixed in the first place, and if the war expands and the number of purchases increases, then there will be more savings in procurement costs.

At this point, the negotiations on all procurement projects of the Navy in 27 were completed in time for December 15, that is, before the manufacturers submitted their production plans for the next year to the government. As far as Tan Renhao knows, the army's procurement negotiations have ended before this, and Prime Minister Xue Xiyue's action to suppress the oligarchic family has begun to bear fruit!