boyutpedia Chapter 188 Brand Upgrade & Company Restructuring
Chapter 188 Brand Upgrade & Company Restructuring
As the first snow of 1988 fell, the conference room of Zhangcheng Chenqing Hardware Factory was bustling with activity. The long table was covered with various documents, the most prominent being a red-covered "Feasibility Report on Enterprise Restructuring," with the words "Chenqing Precision Manufacturing Co., Ltd." prominently displayed in bold on the cover, next to a hastily made seal mold. Lin Chen held a half-smoked cigarette between his fingers, the smoke swirling before his eyes, but it did nothing to distract him from the financial data projected on the wall—the company's net profit for 1987 exceeded 800 million yuan, a 120% increase over the previous year, with precision bearings accounting for 75% of the total.
"The name 'hardware factory' no longer does justice to our products." Lin Chen stubbed out his cigarette and pointed to the product inspection report on the projection screen. "Last month, we sent samples to the Shanghai Precision Machinery Research Institute for testing. Our bearings have a wear resistance life of 12 hours, far exceeding the industry average of 8 hours, and have reached the international Class II standard. If we still call ourselves a hardware factory, customers will only categorize us with those small workshops that produce agricultural tool parts."
Sitting opposite her, Su Qing adjusted her black-rimmed glasses and opened the trademark registration acceptance notice in front of her. The trademark image of the four artistic characters "Chenqing Precision Machinery" was clearly visible on the light blue official paper, covering eight major categories including precision machinery parts, bearings, and machine tool accessories. "I've already consulted Section Chief Li at the Provincial Trademark Office. There are no similar or conflicting trademark names, and I expect to receive the registration certificate within six months." She paused, then took out another document. "This is the consulting contract for ISO9001 quality system certification. I found an agency in Shanghai with foreign-invested certification qualifications; they promised to complete the system setup within three months and obtain certification within six months."
Whispers filled the conference room. Old Wang from the technical department stroked the bearing sample in his hand, his face full of pride: "Our technology is definitely up to par. Last time we sent samples to Guangzhou Automobile Group, their German engineers gave us a thumbs up, saying it was even more precise than the Taiwanese products they used before. But the certification fee isn't cheap, is it?" Su Qing quoted a string of figures: "The consulting and certification fees total 8 yuan. Although it accounts for 4% of this month's net profit, after certification, we can enter the supplier list of foreign companies. This investment is worthwhile."
Lin Chen noticed the concerns of some of the older employees. These old buddies who had followed him from the farm tool factory were still getting used to new terms like "company" and "system." He got up and walked to the filing cabinet in the corner, took out a yellowed photo album, and opened to the first page—it was a photo from 1978 when Chenqing Hardware Factory was first established. In the dilapidated factory building, there were two second-hand machine tools, and a dozen or so employees in patched work clothes posed for a group photo. "When we started our business, our biggest dream was to be able to pay wages on time." He pointed to his younger self and Su Qing in the photo, "Now we have three factories, and our products are sold in Guangzhou and Shanghai. The next step is to sell them overseas. To go global, we need a proper name and a set of standardized rules, otherwise foreign companies simply won't cooperate with us."
These words silenced the meeting room completely. Old Liu recalled his experience last month delivering goods to a foreign appliance manufacturer. The manufacturer meticulously checked the test report, spending an extra three days verifying the product quality simply because the factory name contained the word "hardware." "General Manager Lin is right," he said. "Last time I delivered bearings, their purchasing manager asked directly, 'You make small hardware, how come you're producing precision bearings?' I was so embarrassed." He slammed his hand on the table, declaring, "I support restructuring! From now on, we'll be a legitimate, large company!"
After the meeting, the restructuring officially began. Lin Chen and Su Qing split into two groups: Lin Chen was responsible for streamlining the technical system and preparing for the new factory's name registration, while Su Qing took the lead in liaising with the industry and commerce and tax departments to handle equity quantification and qualification change procedures. Su Qing, along with Xiao Zhang from the finance department, spent a whole week at the municipal industry and commerce bureau, revising the company's articles of association seven times. When she returned to the company with the revised articles of association, she happened to see Lin Chen demonstrating the new quality inspection process to the workers in the workshop.
A crowd had gathered around the newly installed testing equipment in the workshop. Lin Chen held a bearing in his hand, adjusting the parameters under a microscope: "From now on, every batch of our products will undergo three tests. The first is a dimensional accuracy test, using this electronic micrometer, where the error cannot exceed 0.005 millimeters; the second is a wear resistance test, requiring 1000 hours of operation under simulated working conditions; the third is a rust prevention test, requiring a 72-hour salt spray test. If any product fails to pass these three tests, it cannot leave the factory." Behind him, on the wall, a newly posted "Quality Control Rules" sheet was a full two meters long, with each rule indicating the responsible person and assessment standards.
"There's been progress with the business registration department." Su Qing handed him a cup of hot tea, her voice weary yet brimming with excitement. "Our registered capital is set at 5 million yuan, with your technology contributing 40%, my capital and management contributing 30%, and the remaining 30% going to core employees and existing shareholders. Director Li said that our technology-based enterprise restructuring can also enjoy a two-year 50% income tax reduction policy." Lin Chen took the teacup, his fingertips touching her cold hands, only then realizing she hadn't even worn gloves to rush the approval process. "Go rest for a while, we'll deal with the rest tomorrow." He pushed her towards his office without further ado. "I've already had the cafeteria make ginger soup, go have a bowl to warm yourself up."
Su Qing stubbornly pulled out an equity distribution plan from her bag: "I've compiled all the profit distribution records since we started the business. Lao Wang has worked with us for ten years, so he'll get 5% equity for his technology; Lao Liu has been in charge of workshop scheduling for eight years, so he'll get 3%; and the key personnel from the Wuxi and Dongguan branches have also had their proportions determined according to their contributions." She pointed to the notes in the plan, "These are all real shares, which will be distributed as dividends at the end of the year, and can also be transferred at market price after leaving the company. This is how we can retain core talent." Lin Chen looked at the densely packed annotations on the plan, with each employee's start date and contributions clearly written down, and a warm feeling welled up in his heart.
When the equity distribution plan was announced at the employee meeting, the entire cafeteria erupted in cheers. Old Wang, holding his share certificate, trembled, exclaiming, "I'm just an old technician from the countryside, and I can be a shareholder?" Old Liu was so moved he burst into tears. He recalled how, when the factory faced financial difficulties, he had used all his family savings to pay the employees' wages, and now it was finally paying off. Lin Chen stood on the stage, looking at the weeping, overjoyed employees below, and declared loudly, "Chen Qing doesn't just belong to me and Su Qing; she belongs to all of us. From now on, when the company makes money, we'll all share it; when the company thrives, everyone will have something to look forward to!"
Just as the restructuring was progressing rapidly, the bank's president, Mr. Zhang, proactively approached them. In his office, Mr. Zhang looked at the ISO9001 certification progress chart on his desk, then flipped through the branch's financial statements, nodding repeatedly: "President Lin, President Su, we've witnessed your development over the past two years. All three factories are progressing in tandem, with net profits doubling year after year. You won't find another company like this in Zhangcheng." He put down the statements, his tone sincere, "Our head office just issued a policy to provide special credit lines for high-quality manufacturing enterprises. I've applied for a 300 million yuan credit line for you, with an annual interest rate of only 6.5%, two percentage points lower than ordinary loans."
Su Qing's eyes lit up; she was worried about the funding gap for developing high-end automotive bearings. Previously, a German engineer had suggested importing an advanced heat treatment system, priced at exactly 300 million yuan. With this loan, they could immediately begin the procurement. "President Zhang, we do need this loan, but we need to clarify the repayment plan," she said, presenting a pre-prepared funding plan. "This 300 million yuan will mainly be used to purchase the heat treatment equipment. It's expected that after production begins, it will increase bearing hardness by 20%, increasing annual production by 50 sets. Based on the current profit margin, the loan can be repaid in one year."
Lin Chen added, "We can also use the factory buildings of our Wuxi and Dongguan branches as collateral. Although those factory buildings are leased, we have five-year leases and have already paid two years' rent, so their value is enough to cover the loan amount." President Zhang was even more reassured upon hearing this. He had previously investigated Chenqing's business operations and knew that the company never defaulted on payments, and its clients were large corporations like Guangzhou Automobile Group and major home appliance manufacturers in East China, so its repayment ability was absolutely guaranteed. "Then let's get the paperwork done tomorrow!" he slammed his hand on the table. "I'm going to promote you as a high-quality client case at headquarters."
On the very day the loan was disbursed, Lin Chen, along with Lao Wang from the technical department, flew to Germany to inspect the equipment. In the equipment showroom in Munich, a large heat treatment furnace was in operation, and glowing red-hot bearings emerged from it, their surfaces gleaming with a uniform metallic luster after cooling. The German manufacturer's technical director personally demonstrated the operating process: "This equipment uses controlled atmosphere heat treatment technology, which can precisely control the nitrogen concentration inside the furnace, ensuring the uniformity of hardness in each batch of bearings." He handed Lin Chen a test report, the data of which showed that bearings treated with this equipment had a 50% longer service life than those processed using traditional methods.
"We need delivery within three months." Lin Chen looked at the equipment's technical parameters, already planning the production line layout in his mind. "And you'll need to send engineers to install and debug it, as well as train our employees." The technical director hesitated, "A three-month delivery period is too tight; our orders are already booked for six months from now." Lin Chen took out Chen Qing's ISO9001 certification acceptance notice and a long-term supply contract with Guangzhou Automobile Group. "We are a core supplier to Guangzhou Automobile Group, and our order volume is expected to double next year. As long as you can deliver on time, we can sign a five-year equipment maintenance contract."
This offer appealed to the technical director. A five-year maintenance contract would provide a stable income, and Chenqing, as a rising precision manufacturing company in China, had enormous future potential. "I'll adjust our production plan immediately and prioritize your order," he said, signing the contract on the spot. "The equipment will be shipped in two months, and installation and commissioning will be completed within three months, guaranteeing it won't affect your production schedule." Old Wang, standing nearby, quietly told Lin Chen, "President Lin, this equipment is expensive, but it's worth it. With it, our bearings can compete with imported products in the market."
Meanwhile, Su Qing was busy preparing for the opening ceremony of her new company in Zhangcheng. She specially invited a calligrapher from the province to inscribe the signboard for "Chenqing Precision Manufacturing Co., Ltd.", and contacted local television stations and newspapers to expand the company's influence through the opening ceremony. Employee representatives from the Wuxi and Dongguan branches also rushed back. Lao Liu led the workshop workers to clean the factory area spotlessly and even placed two rows of flower baskets at the entrance.
On the day of the unveiling ceremony, just as dawn broke, the factory gate was already packed with people. Director Li of the Municipal Administration for Industry and Commerce personally unveiled the new signboard. The moment the red silk cloth was lowered, firecrackers exploded, and television cameras focused on the large golden characters of "Chenqing Precision Manufacturing Co., Ltd." Lin Chen and Su Qing stood side-by-side under the signboard, receiving applause and blessings from the employees. Director Li shook Lin Chen's hand and said, "President Lin, you are a model of private enterprise reform in Zhangcheng. From a hardware factory to a precision manufacturing company, this is a beautiful step!"
After the ceremony, the customer representatives who came to offer their congratulations toured the workshop. Looking at the newly installed testing equipment and heat treatment furnaces, Manager Wang from Guangzhou Automobile Group exclaimed, "When we first started working with you, I was worried that your production capacity wouldn't be able to keep up. Now it seems my worries were unnecessary." He immediately signed an annual supply contract, doubling the previous amount. "Next year, our new model will be launched, and the demand for bearings will be huge. We hope you can become our exclusive supplier."
At the celebratory lunch, Old Wang, holding a wine glass, approached Lin Chen and Su Qing, excitedly saying, "The greatest fortune of my life is working with you guys. Back in the state-owned factory, no matter how well I did, I was just a technician. Now I'm not only a technical supervisor but also a company shareholder—something I never dared to dream of before!" Old Liu chimed in, "My son is taking his university entrance exams next year. I told him he should be like General Manager Lin and General Manager Su, earning his living through technical skills and living with integrity!"
Lin Chen looked at the table full of old friends, then at Su Qing beside him, who was beaming with smiles. He raised his glass and said, "Today's achievements are the result of everyone's hard work. From today onwards, Chenqing Precision Manufacturing Co., Ltd. is officially launched. We will build 'Chenqing Precision' into a famous Chinese brand, letting the world know that we Chinese can also manufacture top-notch precision bearings!" Amidst the crisp sound of clinking glasses, the sunlight streamed through the window, illuminating the anticipation on everyone's faces.
After the celebration banquet, Lin Chen and Su Qing stayed in the office to organize documents. Su Qing took out a new research and development plan titled "High-end Automotive Wheel Hub Bearing R&D Project," with a budget of 200 million yuan. "With this bank loan and the advance payment for the new order, our R&D funding is secured," she said, pointing to the technical specifications in the plan. "If this project succeeds, our bearings can enter the high-end automotive market, and the profit margin can reach twice what it is now."
Lin Chen walked to the window, watching the busy figures in the factory area. In the distance, freight trucks were loading newly produced bearings, ready to be shipped to all parts of the country. Suddenly, a notification popped up on the system panel. Next to the green words "Enterprise Rating Improvement" was a notification of "Provincial High-tech Enterprise Candidate List." He turned to look at Su Qing, and the two smiled at each other, both seeing determination in each other's eyes. They knew that the brand upgrade and company restructuring were just a new beginning. Chen Qing's path in precision manufacturing had a long way to go, but as long as they worked hand in hand, there was no obstacle they couldn't overcome.
As night deepened, the office lights remained on. Lin Chen signed his name on the research and development plan, while Su Qing stamped the new company seal beside him. The red seal on the paper symbolized the future of Chenqing Precision Manufacturing Co., Ltd., brimming with vitality and hope. The snow outside the window had stopped, and moonlight shone on the "Chenqing Precision" signboard, reflecting a dazzling light that illuminated a new journey for Zhangcheng's precision manufacturing industry.