Rebirth of the Industrial Tycoon

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In the 1980s and 1990s, foreign investment in China was mainly to establish joint ventures.

Foreign capital provided funds and technology, and domestic enterprises provided land, factories, employees, etc. This type of joint venture is also mainly aimed at foreign markets. That is, production in China and sales abroad.

After the Asian financial crisis, the Chinese market began to grow and develop, and foreign capital gradually found that the Chinese market was really fragrant, so it began to enter China by acquiring domestic enterprises, with the aim of getting a share of the Chinese market.

Before 2004, foreign investment in Chinese enterprises accounted for only about 5% of foreign investment, but it rose to 10% in 2004. By 2005, the proportion of acquisitions in investment had reached 20%. In 2006, the number of foreign investment acquisition projects approved by the state reached more than 1,300.

For foreign enterprises, this kind of acquisition has enabled them to successfully enter the huge Chinese market, and for China, foreign acquisitions have also gradually improved domestic technology and thus become internationalized.

This kind of foreign acquisition also has obvious duality.

On the one hand, it can improve the quality of Chinese products, improve asset quality to a certain extent, and enhance the industrial structure. When the overall industry is upgraded, it can compete in the international market.

On the other hand, foreign capital has capital, technology, brand, marketing, etc., and occupies the high value-added links, which will also squeeze the development space of domestic enterprises. Those enterprises that fail in industrial upgrading will eventually be eliminated by the market.

The conditions for early foreign mergers and acquisitions were very harsh.

For example, in 2006, the American Carlyle Group wanted to acquire XCMG. The initial condition was 375 million US dollars to acquire the equity of XCMG 85.

Although XCMG was not a giant enterprise like it is now, it was also the leader of China's equipment manufacturing enterprises. It was a joke to want to acquire the equity of XCMG 85 with less than 400 million US dollars.

However, the main reason why the Carlyle Group has the confidence to offer such an excessive acquisition price is because they have technology.

China is exchanging market for technology. If foreign capital wants to get a share of the Chinese market, it should always come up with some decent technology so that they can make money together.

Foreign investors are not fools. They cannot give away technology for free. Therefore, when acquiring Chinese companies, they will include the value of technology in the acquisition cost, and even have a premium.

For example, if your company is worth 1 billion yuan, then when acquiring, I will pay 200 million yuan to buy 80% of your shares, which is 800 million yuan of assets. This is equivalent to the technology I brought being worth 600 million yuan.

Therefore, the forced technology transfer hyped by the West in later generations is a complete lie. Foreign companies come to China to invest in order to make money. How can they give you technology for free?

The so-called transferred technology has been calculated into the cost when these foreign companies enter China.

Although the Heavy Machinery Factory has been suppressed by Fukang Engineering Company in the past two years, it is still a large state-owned enterprise. It has accumulated a lot of assets over the years. There is absolutely no problem in evaluating an asset of 800 million yuan.

However, Volvo is only willing to pay 30 million US dollars, about 250 million yuan, to acquire 90% of the shares of the Heavy Machinery Factory. That is, it wants to spend 250 million yuan to buy something worth 720 million yuan.

The difference of 470 million yuan in the middle is the price of technology.

Volvo's engineering machinery technology is world-class, and any bit of it can be sold for 470 million yuan, which seems to be a good deal.

But the key is that the company also belongs to you, and the technology you bring is the production cost that the company should pay for.

Volvo's acquisition conditions are too harsh. Compared with making money out of nothing, it doesn't cost much more. If the heavy machinery factory is sold like this, it is equivalent to selling state-owned assets at a low price. No one can bear this responsibility, so the city will definitely not agree to Volvo's acquisition plan.

So when Li Weidong put the city's acquisition plan and Volvo's acquisition plan on the table at the same time, Ding Youliang instantly realized that the acquisition work would not be completed in a short time!

The differences between the two sides are too big. The city wants to take 51% of the shares, and the rest will be shared by employees and Volvo; Volvo wants 90% of the shares.

This huge difference, even if both sides make concessions in each negotiation, at least dozens of negotiations will be needed to reach a consensus.

Dozens of negotiations, I don't know how many years it will take. If both parties don't want to make concessions, the negotiation will take even longer.

More importantly, as Li Weidong said, Volvo has 90% of the shares. How much of the remaining shares can be distributed to employees? How much of the portion that can be distributed to employees can fall into his hands?

If you calculate it this way, Li Weidong's conditions are really generous. 20% of the shares are given to the management. As the general manager of the top leader, it is not too much to share 10% of them? That is equivalent to the shares of Fukang Engineering 2.

In comparison, if you continue to stay in the heavy machinery factory and wait for Volvo to acquire it, you can probably only get several decimal places of shares, and it will take several years.

After a long time, Ding Youliang finally sighed and said, "Chairman Li, it's such a big thing, give me some time to think about it!"

Li Weidong didn't expect Ding Youliang to agree to him immediately. After all, he is the top leader of a state-owned enterprise and it is not so easy to be pried away.

However, Li Weidong is very confident about Ding Youliang joining.

Compared with Fukang Engineering and heavy machinery factory, the biggest difference is the nature of the enterprise.

Fukang Engineering is a private enterprise, and the Heavy Machinery Factory is a state-owned enterprise. This is probably what Ding Youliang values ​​most, and his identity as a state-owned enterprise employee is what Ding Youliang is least willing to give up.

People who came from the planned economy era often have an attachment and affection for state-owned enterprises. What's more, Ding Youliang is still a dignified factory director, so his feelings for state-owned enterprises are even deeper.

The psychological hurdle for Ding Youliang to change his job at Fukang Engineering Company was probably the most difficult one.

However, Volvo has proposed to acquire heavy machinery factories. In the future, heavy machinery factories will no longer be state-owned enterprises. Even if Ding Youliang stays, he will eventually say goodbye to state-owned enterprises.

Ding Youliang knew very well that Li Weidong did not need to lie to himself about Volvo's acquisition conditions.

But he still didn't believe Li Weidong's one-sided words, so he tried to find connections and inquired in many ways, and finally convinced that what Li Weidong said was true.

Volvo wants to acquire 90% of the shares of the heavy machinery factory, but it is only willing to pay 30 million US dollars. This is very different from the city's requirements, and the acquisition negotiations have been suspended. It is not known when it will restart.

As far as personal future development is concerned, going to Fukang Engineering is indeed a better way.

"Li Weidong personally invited me, and the conditions he offered were full of sincerity, but since I was parachuted into Fukang Engineering as an outsider, and I was still the general manager, it was inevitable that some people would be dissatisfied with me.

Even if Li Weidong trusts me, I can't go there empty-handed. I have to have a letter of nomination. Only in this way can I convince the public by going to Fukang Engineering. But what kind of certificate should be presented? "

Ding Youliang frowned and thought.

At this moment, the phone rang, displaying an unusual and unfamiliar number.

Ding Youliang picked up the phone, and a voice rang from the receiver: "Is it Director Ding? I'm Zhang Tao from Fukang Engineering!"

"When did I become a fragrant steamed bun!" Ding Youliang was slightly startled, thinking to himself that Li Weidong had just looked for him, so why did Zhang Tao want to look for him too?

Just listen to Zhang Tao continue to say: "Director Ding, do you have time tonight? Let's have a meal together?"

Ding Youliang thought for a moment and agreed. He wanted to see what Ding Youliang's intentions were.

After the dinner, Ding Youliang took the car home. Sitting in the car, Ding Youliang began to think:

"This Zhang Tao actually encouraged me to file a complaint. It seems that his situation at Fukang Engineering is indeed very bad. Otherwise, he would not have come to me, a competitor, to sue his company.

But it seems that Zhang Tao didn't know that Li Weidong had come to me and wanted to ask Fukang Engineering to take his place, otherwise he would never have encouraged me to file a complaint.

Zhang Tao has reached the point where the seller is seeking glory. It seems that the conflict between him and Li Weidong has indeed reached a very fierce level, and the two parties should be about to break up.

From this point of view, it is reasonable and reasonable for Li Weidong to invite me to be the general manager of Fukang Engineering and promise such generous conditions. He needs someone to take Zhang Tao's place.

I was a little confused before about where Zhang Tao offended Li Weidong, but now I understand. This guy is eating the food of Fukang Engineering, but he wants to smash the pot of Fukang Engineering with his backhand. If I were Li Weidong, I would kick him away! "

The next second, Ding Youliang suddenly realized that the petition was coming!

In a private room in a certain teahouse, Ding Youliang was tasting fragrant tea and looking at his watch from time to time.

After a while, there was a knock on the door. The waiter opened the door and said, "The guest you were waiting for has arrived."

Li Weidong walked in and sat opposite Ding Youliang. The waiter quickly served Li Weidong tea, then exited the room knowingly and closed the door.

Li Weidong knew that if Ding Youliang chose a place like this to meet him, he would most likely be willing to join Fukang Engineering.

After the two exchanged a few words, Li Weidong asked directly: "Director Ding, what are your thoughts on the things I mentioned before?"

"Chairman Li, I admit that your conditions impressed me, but I also have my own conditions." Ding Youliang said.

"Director Ding, please speak."

Ding Youliang collected his thoughts and then said; "First, I hope Chairman Li's promise can be fulfilled."

"You can rest assured in this regard. Although I, Li Weidong, dare not say that I keep my word, my reputation is still very good. At least I will not break my promise. I will not lose a penny of the shares I promised." Li Weidong said.

"I'm not just talking about the shares, but also what you promised before, not to interfere in the management of the company. I want to have absolute decision-making power." Ding Youliang said.

"No problem. I only give suggestions on the development direction of the company. I don't care about anything else."

Li Weidong continued: "Actually, I don't have that much time to stay at Fukang Engineering. Even if I come back, I just look at various reports. You can just go ahead and do it."

Ding Youliang continued: "The second thing is, I have to bring a group of people there. They are all my old subordinates who have been with me for many years. I can't run away by myself and leave them in the heavy machinery factory."

Li Weidong thought for a while and replied: "I can accept all management positions and scientific research positions. For ordinary front-line workshops, you have to undergo an assessment and you can only come in after passing the test."

"Don't worry, there are no front-line workshop workers." Ding Youliang said immediately.

Li Weidong continued, "But I'm the first to say ugly things. We are a private enterprise and we don't support idle people. I am very welcome to work at Fukang Engineering, but if you want to provide for retirement, I will not accept it."

"These are all promoted by me personally. The people I employ are all very capable, and no one is just waiting to die." Ding Youliang said.

Li Weidong nodded, and then asked: "Is there a third request?"

"No, just these two points." Ding Youliang said simply.

"Is there any problem that I need to solve?" Li Weidong asked next.

"No. I can solve all other problems." Ding Youliang looked very confident, and then said: "In addition, I will submit a letter of nomination to you."

"A certificate of submission? What is a certificate of submission?" Li Weidong asked.

"Zhang Tao from your place came to have dinner with me last night. He encouraged me to complain to the superiors, saying that by recruiting people from the heavy machinery factory, you were poaching the country's corners. Zhang Tao hoped that the superiors could issue an order to let Li Shouyi and Chen Guofu return to the factory. Come to the heavy machinery factory."

Ding Youliang said, going through the general situation.

"This Zhang Tao knows how to do such little tricks. How come he doesn't care about running a business!" Li Weidong sighed, and then said: "But sooner or later, I will have to explain this matter to the city.

It wouldn't be a big deal if we just poached Li Shouyi and Chen Guofu from the heavy machinery factory. They were just department heads, not high-level people.

But it's different if you are poached by a great master. As the head of a heavy machinery factory, you are appointed by the city after all. Your level is much higher than theirs. If you invite Fukang Engineering, I need to give an explanation to the city. "

"It doesn't matter. I can go and talk to them. Just say that I want to find another way out. Anyway, it's nothing new for government and enterprise cadres to go overseas these days. There are many precedents." Ding Youliang said calmly.

"I still have to go there in person to show more sincerity." Li Weidong smiled and then said; "What's more, I want to take this opportunity to recommend a successor!"

"My successor?" Ding Youliang was slightly stunned.

"After you leave, a company as big as a heavy machinery factory must be managed by someone, right? The position in this factory cannot be left empty." Li Weidong said.

"Then who are you going to recommend?" Ding Youliang asked puzzledly.

Li Weidong showed a deep smile and said at the same time; "What I want to recommend is not your certificate of nomination!"

"You mean Zhang Tao?" Ding Youliang was stunned for a moment, then immediately showed an expression of realization.

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