Road to Revival

Dizzy and disoriented by the vice presidents' exchange, Lü Qi stared at Tao Tang. She felt that President Jiang was right, and Presidents Han and Luo's remarks were quite reasonable. Even Li Luo couldn't be said to be disregarding the overall situation; she had reviewed all the marketing department's contracts, and as Li Luo said, increasing revenue was not so easy. Hearing these numbers was utterly disheartening, leaving her with no confidence whatsoever. What could Tao Tang possibly do? In her opinion, the only options were probably to cut expenses or increase loans. She looked at Tao Tang, wondering what brilliant ideas he had up his sleeve, but she vaguely sensed that today's meeting was a severe test for him. If he couldn't control these powerful figures, his future work would definitely encounter even greater obstacles.

Tao Tang twirled a pencil in his hand and began to speak.

"First of all, I want to say that the company leaders all viewed the issue from a strategic perspective. Whether emphasizing the long term or focusing on overcoming the immediate difficulties, the proposed solutions are all feasible. The problem lies in the imbalance of the budget. As General Manager Jiang just mentioned, the budgets proposed by various departments are basically free of unreasonable items; the money should be spent, and some are rigid expenditures, such as salaries, power costs, taxes, and financial expenses… Some colleagues have told me that the owed salaries should not be paid retroactively, or at least not in a lump sum. I understand that these colleagues are acting entirely out of good intentions; on a small scale, they are understanding my difficulties, and on a larger scale…" The statement said it was based on the company's actual situation. However, I don't regret the decision; we have no right to delay employee wages! If we, those of us on performance-based salaries, were to boast that delaying for a month or two wouldn't matter, that would be heartless and a betrayal of our party principles. Not only should wages not be delayed, but we must find ways to increase them and establish a mechanism for wage growth—this is our responsibility. And of course, we can't avoid paying the energy cost, right? That goes without saying. As for interest and taxes, what reason do we have to complain? Having such vast national assets, shouldn't we contribute to the country? What's there to complain about?

"But we've encountered a serious situation of insufficient revenue to cover expenses. Blaming the marketing department's payment collection policy is unreasonable. We can't change the payment delay habits of certain industries; we are not just players, but rule-makers. If you don't want to play, you can leave. Nobody's forcing you to stay in this industry. So what do we do? Actually, everyone has already said it quite clearly: it's simply about increasing revenue and reducing expenditure. Mr. Jiang is right, but not entirely right. The right thing is that increasing revenue is always the top priority. It's like a leaky faucet that needs fixing—that's reducing expenditure, but only if there's water in the faucet; otherwise, reducing expenditure is meaningless. The wrong thing is that we can never ignore reducing expenditure, otherwise, no matter how much revenue we increase, it's all in vain. Increasing revenue means expanding our income scale. Everyone must have just mentioned the company's..." We now have a clearer picture of fixed costs. Considering the rigid increase in wages, historical debts, and the company's future development, this area absolutely requires at least 200 million RMB per month. In my opinion, 200 million RMB is for basic living expenses, not for construction. Based on 200 million RMB in fixed costs, how much sales revenue would we need to cover it? The March financial statement shows our cost-to-revenue ratio is 98.8%, which should be the figure. Everyone can do the calculations… Therefore, I agree with President Jiang's view: we can't just focus on the present without considering the long term. The long term involves investment in technology, equipment, and the market. So, President Jiang, please have your budget revised; don't be so restrictive. I'll accommodate your request! And I believe the other leaders fully understand the significance of R&D investment. I won't elaborate on that.

"However, focusing solely on the long term while neglecting the present won't work. It's like telling a person who's starving, 'Just hang in there, things will get better soon, you still have a bright future.' But what they need right now isn't a future, just a bowl of porridge. Red Star Company is a bit like that starving guy; the key is to get through the present. As I said before, President Jiang's 1100 million yuan not only can't be less, but it should be more. That's settled for that part. Salaries can't be compromised, that's the second part, but we need to negotiate with the government to get the 990 million yuan in social security funds paid out at the end of the second quarter." "Pay. Next, I'm afraid taxes and interest can't be reduced either, that's the third part. The fourth part is the technological upgrading funds. It concerns the company's development and reputation. Project delays will inevitably make it more difficult to secure projects in the future, which is not worthwhile. Moreover, every project is related to the company's development, we can't do something unethical that will cut off our future generations' livelihood. I've also secured this money, including the safety net funds that Liu Xinjun overlooked. The fifth part is power costs, I don't think we can cut back on that either. However, living expenses and production costs must be kept separate, they can't be mixed together! Lü Qi—"

"Here." Tao Tang suddenly called out to her, startling Lü Qi.

"I called you in to ask about the company's specific regulations regarding performance evaluation of property management companies."

"That's right, we mainly assess the property management company's meter reading rate..."

"How many?"

"Electricity costs 90%, heating costs 85%..."

"This is unreasonable, isn't it? Mr. Luo, does reaching 90% and 85% mean that's enough? The company has to cover the losses? That won't do. Property management needs to operate on a market-oriented basis; losses should be borne by the property management company! What pressure do these targets put on them? This is absolutely unacceptable. We need to re-examine and adjust the policy! Since this isn't the topic of today's meeting, let's not waste everyone's time. After the five guarantees mentioned above, the rest requires everyone's joint efforts. I don't have any brilliant ideas; everyone has already discussed their approaches, so let's proceed according to everyone's thinking. Mr. Li, you should further study the increase in cash flow; an increase of 1 million will also contribute to production funds. Mr. Ma, Mr. Qiu, you both gave excellent suggestions, and I completely agree. Especially the issue of reducing inventory; it needs to be put on the agenda… I have only one requirement: the production plan must be completed! We must achieve 600 million in output value! Everyone wait for my decision; this is my decision!"

Tao Tang stopped drinking his tea, and the room fell silent.

Tao Tang continued, "Comrades, I think today's meeting was quite good. It revealed our current situation, exposed our difficulties, and also identified some ways to solve the problems. Under these circumstances, we must not only unite to overcome these difficult times, but also see hope and confidence. The difficulty in May is simply having orders but not being able to complete them—what kind of difficulty is that? It's much easier than having no market and no orders! If all else fails, we can buy on credit, or even take out loans. Didn't the leaders from the provincial and municipal levels of the Industrial and Commercial Bank of China come to us today? But General Manager Jiang's opinion is correct; loans are not a fundamental solution and come at a price. Buying on credit is also not a good solution. General Manager Qiu is absolutely right; if you buy on credit, there's no room for negotiation. Therefore, we should use these methods sparingly."

"Is everyone aware of the company's difficulties? I don't think so. What puzzles me now is that, on the one hand, the company is facing such a difficult situation, and on the other hand, the actions of some departments and some leaders are completely at odds with the situation. Let me give you a few examples. Go look at the guesthouse. It's bustling with activity every day, with dishes and cups scattered everywhere. How much of that is necessary hospitality? Are there any violations of the company's hospitality regulations? I can't say. An engineer from the research institute spent 4500 yuan on a single meal entertaining someone outside. What kind of standard is that? A section-level cadre in a certain department spent 1080 yuan on taxi fare alone for a trip to Beijing, and the department head actually signed it off. The fleet of vehicles is said to have nearly thirty cars, but it's not enough! Many units apply late and can't get any; it depends on connections." "I looked into it, and this is even with many departments having cars, like the finance department, production department, and development department. The marketing department, needless to say, reportedly has seven cars! The construction company even has a BMW 5 Series, more luxurious than my car as chairman… I checked the January financial records, and the expenses for gifts alone reached 275 million… That's just the larger part; to be more specific," Tao Tang raised several sheets of printed paper in his hand, "As you can see, they're all single-sided printing. I've received many requests and reports since I came to the factory, and I rarely see double-sided printing, because it's convenient, because printing paper doesn't cost them anything. Comrades, is this the behavior of a struggling company? Is this due to financial difficulties? This time, the office expense budget listed by the factory office and other departments must…" This needs to be redone! What a mess! If these problems can't be overcome, even if Hongxing doubles in size, the financial strain won't be reversed. Furthermore, accountability must be enforced! As I just mentioned, warranty losses remain high, starting at millions of yuan. And what about the quality assessment results? How much were the quality fines in April? 19,000 yuan! That's ridiculous! I want to ask, does this match our current quality situation? Comrades, there are many problems; I've only listed a few. These problems exacerbate the company's financial pressure. On the surface, it's a management issue, but at a deeper level, it's a problem with the mindset of the two levels of key leaders present here. Whose enterprise is Hongxing Company? How should Hongxing be managed? Please all think about this carefully. Personally, I believe... Without a fundamental shift in mindset, the company's management level cannot truly improve. Without improved management, doubling the company's scale is meaningless! We still won't have enough money! I don't know how everyone here felt after hearing all those numbers—pressure? Motivation? Feeling pressure shows you have at least a basic conscience and sense of responsibility. Feeling motivated is even more reliable, because behind every problem lies an economic growth point; solving one problem improves the company's situation. If you feel neither pressure nor motivation, then you are seriously incompetent! If you feel schadenfreude in the face of this situation, I think your position is in danger… The company doesn't need referees, it needs players. I'm giving you all this serious advice.”

Lü Qi frantically took notes on Tao Tang's speech. She noticed that the cadres around her were also taking notes, and the meeting room was completely silent.

"Now I require all departments, including the marketing department, to take back their May budgets and redo them according to the principles I just established! Report to General Manager Han after the holiday, and also send me a copy. The plans need to be detailed, down to the week. Don't be too happy about ensuring the funds are used, because I will be watching you closely. Once the money is in hand, it needs to be spent, and once it's spent, I need results! If you don't have enough money, figure out a solution yourself. Each level is responsible to the level above you. If you really can't figure it out, tell General Manager Han. If General Manager Han has no solution, come to me. But you need to explain to me clearly what measures you have taken. If I have a solution that you can't come up with, that will be my responsibility." "Now I'm going to ask you if you're competent. Why can't you come up with a solution that I, an outsider, can come up with? Hmm? Perhaps some will say, 'You're being unreasonable,' and I am unreasonable! As the chairman of Hongxing Company, my responsibility is to set targets, assess their completion, and thereby evaluate the competence of both levels of leadership, putting the right people in the right positions. That's my primary responsibility! The specific work is your business! Otherwise, what's the point of having so many leaders? Are they all just here to complain about difficulties? I'm putting my words out there: 600 million must be achieved by May! If any link in the chain breaks down, I will hold that link accountable!"

Absolutely domineering. Guo Tao, who hadn't spoken until now, thought that Song Yue had never spoken with such domineering power in the later stages of the story, because he had lost his ability to command the atmosphere. But Tao Tang could, at least he could now.

Tao Tang looked to Zhao Qingmin for his opinion, and seeing that the secretary had no intention of speaking, he announced the meeting was adjourned.