"Let's increase our visibility first. As long as the fans are sold in most supermarkets in the United States, I can advertise on several major TV stations in the United States." Chen Zhiwen said.
For TV stations covering the United States, advertising fees generally range from tens to millions of dollars. Once it is launched, theoretically, millions or even tens of millions of people will watch it during the prime period, but not all companies can participate in this kind of advertising. Yes, if your product is not covered in most places in the United States, even if it is advertised, consumers will not see the brand in supermarkets or other shopping places, and they will soon forget about it.
Red Bull was successful because it was just a drink with a unique effect, so it quickly entered major supermarkets. Subsequently, large-scale advertising was spent on advertising, and sales naturally skyrocketed, forming a positive cycle development model.
But for household appliances, every supermarket is very cautious about introducing other brands, because these things are powered by electricity, and there are safety issues when it comes to electricity. Therefore, the introduction process is difficult and slow.
Midea built fans as early as two years ago and spent a lot of money to connect with the procurement of many supermarkets in Europe and the United States. However, it could only send a small number of products to supermarkets first and then sell them in small quantities. After the market is confirmed later in the year and no quality problems occur, then retail will dare to start large-scale purchases.
"In that case, Hong Kong is also preparing to build an industrial park, and we can increase fan production capacity on a large scale." Lei Shengli said with eyes shining.
"Yes, it's just the right time. I need a large industrial plan to negotiate with the Hong Kong government, and large production capacity can also reduce costs to the greatest extent." Chen Zhiwen nodded and said.
Using cost-effective fans to open sales channels for other Midea appliance brands was a decision made by Chen Zhiwen a few years ago. Therefore, in Hong Kong, the core components of fans, motors and injection molding, are produced in-house, controlling the vertical industry chain step by step. .
Because only in this way can costs be reduced to the greatest extent. Similar to the Samsung Group of later generations, with the entire industry chain in hand, costs can be minimized. If it weren't for the perversion of Steve Jobs' Apple and TSMC, which was raised by Apple's orders, Samsung would definitely become the leader of later generations. There is almost no one of the largest electronics brands in the world, because at that time, the Japanese brands had already been beaten by all kinds of things!
Everything we are doing now is to reduce the production cost of fans to the maximum capacity during mass production in the future.
"The cost of fans is not a problem. Many colleagues in Hong Kong have suffered losses due to us. Last time we got together, I told them to stop doing it and just speculate in real estate." Lei Shengli said with a smile.
"If they really do it, they will definitely be grateful to you in a few years." Chen Zhiwen said with a smile.
The future of Hong Kong really only has real estate speculation and finance. Not everyone can play finance, but real estate is different. As long as you have money, just keep buying with your eyes closed. It doesn’t take five years without leverage. How many times can it be doubled? If leverage is used, it is normal to be more than ten times.
Those who have no money and no courage can only deposit their savings in the bank when housing prices rise significantly, and then ask the bank to lend the money to real estate speculators, and then these real estate speculators will speculate on housing prices even higher.
Although it seems a bit tragic, this is an iron law of economics and no one can stop it.
After staying in Los Angeles for a night, Lei Shengli got on the plane to Japan again. Fortunately, he had a first-class seat and could get enough rest, while Chen Zhiwen went to Nike in Portland.
Phil Knight, the founder of Nike, came to pick him up personally, but he got into the motorcade that Chen Zhiwen had prepared long ago.
Chen Zhiwen also attaches great importance to his own travel. He has his own fleet in Hong Kong, and he also has a fleet in the United States. They are all bulletproof cars customized from Mercedes-Benz. Three are in Hong Kong and three in the United States. When you need to go somewhere, the car will drive there in advance or transport it by air. Although it will cost a lot more, it can ensure a lot of convenience, privacy and security.
As early as in Los Angeles, one of the cars drove to Portland as planned. When Chen Zhiwen's plane arrived, it could be used directly. After the popularity of private jets in the future, many wealthy people purchased Boeing private jets. You can fly around the world with your car.
Under Phil Knight's direction, the car drove into an industrial area in Portland. Chen Zhiwen immediately saw the huge Nike logo on a building on the right.
"Eric, please." After the car drove into the factory, Phil Knight said with a smile: "This is Nike's shoe factory."
"Okay." Chen Zhiwen nodded, walked out of the car, looked around casually, and said, "Phil, your factory is not small, isn't it?"
"This factory was originally built to take into account that the demand for production capacity would be huge in the future, so it was deliberately built larger." Phil Knight nodded.
"Production here has stopped now?" Chen Zhiwen glanced at the workshop inside the gate. There seemed to be only a few people inside, and no loud noises could be heard. Although the shoemaking industry is a light industry, there should be some movement, right?
"Yes, work has been suspended here. In the past month, the union has been in trouble. Their demands are too high. I can't agree to it, so I will stop work directly." Phil Knight said helplessly.
Chen Zhiwen asked: "What about Nike shoes during this period?"
Phil Knight said: "It was done by other suppliers. Even when I built this factory, I did not stop cooperation with the previous suppliers."
"If you close this factory, won't there be any problems with the union?" Chen Zhiwen asked again.
The labor unions in the United States are really not that strong. Today, the three largest automobile giants in the United States, General Motors, Ford, and Chrysler, have been fighting bloody battles with labor unions in the past and even the next few decades. In the end, they were still beaten in the 21st century. A complete failure.
You know, General Motors in the 1970s was a super giant in the American industry. Its annual car production capacity exceeded 8 million vehicles, consuming 10% of the U.S. steel production capacity and about 15% of the rubber production capacity. However, it was still beaten to death by labor unions. .
The American manufacturing industry dies due to labor unions. This is not entirely true, but it is at least half true.
"I'm going to close the factory. Except for some employees who are willing to go to Hong Kong, all the others have legally terminated all their labor contracts. What else does the union want?" Phil Knight said angrily, as if the union had brought him trouble. A lot of sad memories came.
"That's fine. As long as the equipment is moved to Hong Kong and the personnel are in place, production can continue." Chen Zhiwen nodded.
"Yes, as long as there are no problems with production, and with your capital investment, Eric, Nike can focus on investing in the end market." Phil Knight said.
"In terms of production, you can rest assured. In the Hong Kong factory, as long as your orders are sufficient, I will continue to invest funds to ensure production capacity and quality." Chen Zhiwen said with a smile.
"I believe in your ability, Eric. Let's take a tour of the factory here, and then go to the company headquarters. There are also other shareholders there. Let's meet and get to know each other." Phil Nike said.
Nike's U.S. factory is quite large, larger than Germany's Bitzer. After a brief internal look, Chen Zhiwen understood the reasons for the failure of this kind of factory.
There are too many workstations. Although the shoemaking industry may be more technical than other garment industries, it still cannot get rid of "intensive manufacturing". In this high-income situation in the United States, a large number of Americans are recruited to produce shoes. It can be said that it is very brave.
In addition, the oil crisis broke out two years ago, and there were problems with energy supply and logistics. As long as it is intensive manufacturing, it is basically impossible to survive, unless it is high-end manufacturing such as automobiles, aircraft, and special equipment. This is also the case in Europe. Manufacturing is the only industry that can stay in the long term.
Nike is also taking a high-end route, but the high cost of production limits the expansion of the terminal market. Coupled with some other reasons, it will naturally lead to problems in the capital chain.
In the 1970s and 1980s, the U.S. manufacturing industry was struggling in its final stages. Due to high costs and labor unions that stirred up troubles everywhere, the only option was to go to Mexico or Asia.
Half an hour later, after walking around the factory, the two returned to the car. Phil Knight smiled and asked, "How do you feel?"
"It's much better than the factories in Hong Kong, especially in terms of environment." Chen Zhiwen nodded and said. In fact, there is nothing high-tech. Even after 50 years, the shoemaking industry will mainly rely on labor, with at most modern quality control. and production capacity monitoring system, but this is also a management aspect. No matter what, shoes still have to be produced by people.
The reason why Chen Zhiwen decided to move the equipment here to Hong Kong was mainly to consider the cost. It would definitely cost more to rebuild it in Hong Kong, but here it is almost free. As long as it is packed and shipped to the container, you are responsible for the freight and labor. Just the fee.
And having said that, many of the equipment here in the United States are quite good and better than those in Hong Kong. For example, all kinds of cabinets are made of stainless steel. It would be great if ordinary sweatshops in Hong Kong had iron shelves.
The distance between Nike's headquarters and the factory is not far. In less than twenty minutes, the car arrived in front of an office building, which was exactly where Chen Zhiwen came last time.
Phil Knight paid great attention to introducing several current shareholders of Nike to Chen Zhiwen, but these are only representatives. Some of Nike's current shareholders are investment funds, and others are a group of people who started the business with Knight.
Before Chen Zhiwen's investment, Nike's board of directors had a total of seven directors, five of whom were Nike's own management and non-major shareholder directors appointed by Phil Knight, and the other two were former investor representatives. After taking the stake, Chen Zhiwen also obtained a director seat, a director with actual voting rights.
However, in the case of 5:3, it is actually of little use, but it is a statement that I still have rights in Nike. Although it has no role on the board of directors, the shareholders’ meeting is another matter. The vote at the shareholders’ meeting only Looking at the stock quota, 20% is actually 1/5, which is actually not much different from Phil Knight’s 28%.
As long as Knight completes the construction of the Hong Kong factory and is able to produce sports shoes that meet the requirements in accordance with the contract, Nike will hand over half of the order to the Hong Kong factory with the same price, then all of Chen Zhiwen's voting rights will be given to Phil Knight.
The contract period is ten years. After ten years, the contract ends. At that time, both parties will look at the situation at that time before making a decision.
In the following days, both parties made concessions on details. On December 10, the two parties signed a formal contract:
First: Chen Zhiwen's Galaxy Investment Group acquired 20% of Nike's equity with an investment of US$4 million.
Second: Galaxy Investment spent US$300,000 to buy all the production equipment and facilities inside the Nike factory at 27 Stone Road, a suburb of Portland. The building is still owned by Nike. This transaction only involves equipment. Nike The issue of employee layoffs at the factory has nothing to do with Galaxy Investment. Nike needs to ensure the normal transportation of production facilities and hand over the equipment to Anta Shoes in Hong Kong.
Third: Anta's shoe factory can obtain relevant technology authorization from Nike at a suitable price, but it cannot be used for the manufacturing of other brands of footwear. Anta can also hire Nike engineers to assist in quality production.
fourth:.
The contract between the two parties has a total of 26 detailed issues, involving aspects such as billing period, quality, production, after-sales, patents, etc. It has certain restrictions on Nike and also has restrictions on Chen Zhiwen's Anta Shoes Factory in Hong Kong.
"Eric, I'm very happy that you can become a shareholder and director of Nike." At the moment the contract was signed, Phil Knight was relieved. Although he paid a lot of equity, it was a real deal. received 4 million U.S. dollars, and the entire Nike Group's capital chain crisis and debt problems were completely resolved.
Next, as long as the production department is divested and the Hong Kong factory is assisted in producing related sports shoes, Nike will be completely relaxed. It only needs to travel lightly and concentrate on research and development and terminal market expansion.
(End of chapter)
