"Mr. Cooney, if we move the factory to China, then it only takes 60% of the United States to build a factory, which is because a large number of equipment cannot reduce prices.

The production cost after production is 50% of that in the United States. This is also the case that all raw materials such as paper have been shipped from the United States. If we can find qualified suppliers in China, the cost can be further reduced.

The above data are all from professional Hong Kong accountants, so there is no doubt about the authenticity.” Qiao Xianda said at a slightly slow speed to ensure that everyone on the scene could understand what he spoke.

In fact, many Americans speak in a strong accent, so others on the scene did not laugh at Joe Sinda in his not-so-standard English.

"Joe, it's not that we don't believe in you, but that China is too far away from us. Everyone knows too little about it, so we must be more cautious.

I heard that General Motors was planning to invest in and set up a factory in China, but later it was rejected by the board of directors for some reason." Tom Kuni was frowning.

He is the president of Gibson Greetings, and Lora Jeronac, the vice president next to him, is both professional managers and does not own any shares in Gibson.

So when the Explorer Investment Company was willing to give away 20% of the shares to their management teams, so that they could become shareholders together, and in addition to their salaries, they could also share the company's operating profits, this action suddenly mobilized the enthusiasm of the management team.

Although there are still some differences between Explorer and RCA on the price of Gibson, Tom Cooney and Lora Jeronac have already turned their butts in advance and began to take the initiative to consider issues from the perspective of Explorer Investment Company.

"I know some of General Motors' joint venture case. The reason why their board of directors finally rejected it was because they did not want to leak technology. I have to say that this was a very stupid decision. With General Motors' sufficient technical reserves and huge car series, we can completely improve it with several old models in exchange for opportunities to enter the Chinese market.

But their leadership is too conservative and has no enterprising spirit at all. No wonder they were defeated by Japanese automakers.

After the United States experienced the oil crisis in 1973, if General Motors' leadership was forward-looking enough, it should have begun to promote the research and development of small-displacement engines and models.

Even if these technical reserves may not be used in the future, for large companies like General Motors, it is necessary to follow the research and development direction of other competitors.

As a result, over the years, GM and other American automakers have only launched various oil tigers, watching the huge low-end auto market be snatched away by Japanese automakers.

With the outbreak of the second oil crisis, American automakers such as General Motors are about to be unable to even maintain the mid-to-high-end market.

Being conservative is the deadliest virus for companies. Take Gibson for example. It is already the third largest greeting card company in the United States. It will inevitably be very difficult to move forward, so it must find another way.

If we gain an advantage in production costs, we can make more investments in advertising and marketing, so that we can have the opportunity to catch up with Hallmark and American greeting card companies in the front." Zhou Yang, who was sitting in the front seat, said.

General Motors was the first foreign car company to negotiate in China. As a result, it got up early but rushed to the late market, which eventually made Volkswagen the number one winner in the Chinese market.

Zhou Yang did not expect that after General Motors decided to temporarily give up the Chinese market, many American entrepreneurs who had doubts about the red China further deepened their prejudice against China. Therefore, Zhou Yang could only take the initiative to stand up and criticize General Motors.

"Mr. Kuni, I would like to emphasize another point. The factory building address I recommend this time - Nantou Export Industrial Park in the China Deep Sea Special Economic Zone, actually has a great connection with Charlie.

It was actually established at the suggestion of Charlie. Many of the convenience measures in the park were written by Charlie himself. So going there can be said to be half of Charlie's home court, and some of your concerns are actually redundant.

Another company that Charlie invested in Hong Kong was responsible for the construction of the first phase of the industrial park factory. If we make up our minds to invest there, we can immediately draw out several standard factory buildings under construction and make special adjustments according to our specific needs.

To be honest, the construction efficiency in China is much higher than that in the United States. If the ordered machines can be quickly put into place, we will see the new factory in China officially put into production before the end of next year."

Qiao Xianda once again took the initiative to speak out for his boss. After all, Zhou Yang's bragging effect was not as convincing as he said it from a third party.

"Well, since that's the case, I have no other opinion. But I need to remind everyone that employees sent to China are not easy to find.

We may have to pay overseas subsidies that are equivalent to several times the salary, after all, many people don’t have a good impression of Red China,” Tom Cooney said with a shrugged.

"I don't think it's a good idea to set up a factory in Asia independently by Gibson. I personally would like to recommend it to find a partner locally. Gibson only needs to hold a part of the equity of the new factory.

As Tom just said, the expenditure of sending employees overseas is quite expensive, and we also need to consider the cultural differences between the East and the West.

The American corporate culture may not be suitable for using it to manage factories in Asia, let alone the place we are planning to invest in this time, which is still a communist country.

General Motors feels that their production technology has strict confidentiality needs, but in my opinion, Gibson's greeting card production technology does not require any confidentiality.

Gibson's core assets are not factories that produce greeting cards, but excellent greeting card design teams and distribution networks throughout the United States." Zhou Yang continued to explain.

"I fully agree with Charlie that moving the production process to Asia is the right choice because the human resources cost in the United States is too expensive.

As for whether to invest independently or find someone to cooperate in the future, this issue can be left to be discussed in detail next time. Joe, your main task in the next period is to screen a group of powerful partners there." William Simon pointed at Joe Xianda and said.

"Okay!" Qiao Xianda nodded immediately and responded.

Since the chairman Zhou Yang and the CEO William Simon have reached a consensus, the others in the conference room will definitely not object.

"The prerequisite for us to open a new factory in Asia is to first deal with Gibson's factory in the United States.

However, it is not easy to close the factory. Workers and trade unions will inevitably strongly oppose it, and local governments will definitely try their best to obstruct it, because it will lose a lot of taxes and jobs." Yang Xu, the vice president, finally spoke up and said casually.

"So we have to discuss this matter well, and it's best to find a 'Whipping Boy'." William Simon smiled slightly, looking confident.

"Whipping Boy" is a special position in the British court in the 16th century. Whenever the little princes in the palace have to punish them because of their willful and indecent behavior, "Whipping Boy" will be used instead of the princes to be whipped, so it is almost the same as "scapegoat" in Chinese.

"Tom, I asked you to release the news before. How many buyers are willing to take over our factory now?" Zhou Yang turned his head and asked the president of Gibson.

Although Explorer Investment’s acquisition of Gibson has not yet officially started, with the active cooperation of Gibson’s management, many preliminary work can be prepared in advance.

For example, MD Perkins, a MD from the fixed income department of Merrill Lynch, once made a suggestion to Zhou Yang, selling all Gibson's greeting card factories to quickly recover a large amount of cash, thereby reducing the overall leverage ratio of the acquisition.

Gibson Greetings has three main factories, distributed in three different states. This is because Gibson received strong support from the parent company after being acquired by CIT, so he acquired two other companies in the 1960s and 1970s, resulting in the fact that its production plants were not concentrated together.

If all of these three factories are sold, they will probably recover about $28 million in funds. According to estimates by M&A consultants, the average annual interest rate for Explorer's fundraising this time is about 18%.

That is to say, the reduced funding amount of money sold by the factory can save the Explorer Company $5 million in interest costs each year.

Although selling the factory and then renting it back will increase production costs, investors who buy factories will definitely make money, but the increased costs will not be as much as the reduced interest, so this operation is very cost-effective for Explorer Investment Company.

"There are three investors who are currently in contact with us, the most sincere one is the consortium mainly composed of the University of Cincinnati endowment, which only has a 10% annual return rate." Tom Cooney said.

Alumni donation is one of the important fundraising ways for American universities, but alumni may propose various conditions when donating money. Therefore, universities may not be able to spend the money quickly after receiving the donated funds, so it is very important to keep the value and increase the value of these funds.

Most American universities will set up special foundations to invest and add value to alumni’s donations. The most famous of them is Yale Fund, whose investment team is better than most Wall Street fund managers, and can provide Yale University with nearly 40% of its operating expenses every year.

However, David Svenson, who was later praised as "Yale God of Wealth", has not yet become the head of Yale Fund. So before being subverted by the "Yale Model", the endowment funds of American universities are now relatively conservative, mainly investing in stock markets and treasury bonds.

The University of Cincinnati Fund is a typical example. Stocks account for 70% of its investment portfolio, and the remaining 30% are Treasury bonds. However, the US stock market performed poorly this year, so the performance of the University of Cincinnati Endowment Fund was still in a loss for the whole year, so they decided to take out some of the funds for other investments.

Gibson is headquartered in Cincinnati, Ohio. The University of Cincinnati knows its background very well. Moreover, the greeting card market is not a segment with limited growth rates but has been steady and upward, like other areas with higher risks.

So in the opinion of the investment director of the University of Cincinnati Fund, buying Gibson's factory and then renting it back to Gibson to obtain stable rental returns every year is a business with little risk.

"Tom, if you go find a reliable person to send news to the public, you will say that within the Explorer Investment Company, the conflict between William and me is actually very serious.

I am just a lucky "lucky Asian boy" from Hong Kong. I don't know what investment is, but I want to suppress William everywhere.

When William proposed to repay cash by selling and renting back the factory, I was unwilling to sign a long-term capacity leaseback contract. The reason was that interest rates in the United States would soon fall, so the market return rate of funds would also fall rapidly.

If you sign a long contract now, Gibson's production costs will be very high for a long time in the future. It's better to sign a short contract now and wait until the US interest rates drop, and then force investors who buy factories to accept a lower return on investment." Zhou Yang said with a smile.

"Charlie's explanation seems reasonable, but it ignores the risks involved. Once factory investors refuse to renew their contracts with Gibson in the future, Gibson will immediately fall into a dilemma of no production capacity.

I hope you can find someone to accidentally leak this loophole to the management of Gibson's major competitors. And from today on, Charlie and I will act in a few scenes and some conflicts broke out in public.

Just be sure to know this matter, don’t reveal the truth for the time being.” After Zhou Yang finished speaking, William Simon immediately took over the topic and continued.

All the smart people present, and immediately understood that this was putting a trap on the competitors! If someone really wanted to take the opportunity to cut off Gibson's future production capacity, he would just jump into the trap and be a buyer for Gibson.

At that time, Gibson can dress itself up as a victim and let the other party bear the responsibility for not renewing the contract. By then, the factory is no longer in Gibson's hands, and in the future, whether it is dead or alive, it has nothing to do with Gibson.

"Tom, this matter is related to our subsequent relocation plan, so you must plan it well and try to make William and my performances valuable!" Zhou Yang reminded seriously.

"Charlie, don't worry, whether it is Hallmark or American greeting card companies, they have always been eyeing us. Now, taking advantage of our fatal flaws because of our acquisition, they will definitely not miss this good opportunity to kill us." Tom Cooney said with a smile, who knows his competitors very well.

"Then we are waiting for your good news. RCA has already negotiated almost the same. The final acquisition price will be $85 million.

After you find the takeover here, we can start the acquisition process soon!" William Simon said happily. He is familiar with the senior executives of RCA, so the negotiations are progressing very quickly.

It has to be said that Zhou Yang's introduction of William Simon into the acquisition team is a very correct choice. As a well-known electronics group in the United States, RCA is also a well-known figure in the American business community, and it is difficult for ordinary people to take it seriously.
Chapter completed!