Road to Revival

Tao Tang was completely unaware that he was being schemed against by his own secretary.

He went to Zhao Qingmin's office and started the conversation with the questionnaire.

"Secretary Zhao, the questionnaires have been collected. I've reviewed the secretaries' statistics, and although they're not complete, they roughly illustrate the situation. The employees are most concerned about four issues. First, income increases; they hope the company will raise wages every year. Second, company development; half the questionnaires mentioned development, which is very gratifying. Third, corruption; everyone believes there is serious corruption within the company, especially in personnel matters. Fourth, welfare benefits; there's been a lot of discussion on this, mainly regarding housing; they hope the company will build more affordable housing. Besides these, many also mentioned quality issues, believing that product quality is the main reason for market shrinkage. Oh, and another issue is the serious problem of excessive eating and drinking within the company. This is prevalent both at the company level and at the grassroots level. Whenever there's overtime, there's always eating and drinking. The retired staff at the retirement management center have the strongest opinions on this."

Zhao Qingmin looked at Tao Tang for a long time before saying, "What are you planning to do? I think that since you've just taken office and already pulled off this stunt, you must have a series of follow-up plans."

"Secretary Zhao, this is the will of the people. We must take it seriously. Anything that can be corrected, we must rectify immediately. Doesn't the Central Committee emphasize the mass line? This is implementing the mass line."

If Zhao Qingmin hadn't known that Tao Tang had served as the head of Shengdong Company for over three years, he would have inwardly mocked Tao Tang's naiveté. Public opinion? If governance were based solely on public opinion, it would be impossible to get anything done! But Tao Tang had developed the Shengdong experience, managing to revive a large, struggling factory—a tangible achievement that earned full recognition and high praise from headquarters. Zhao Qingmin dared not ridicule Tao Tang, and besides, he didn't have the leverage to challenge him now. Most importantly, after the Yang-Song case, Zhao Qingmin only hoped to retire peacefully after a few more years in his current position; he had essentially lost all ambition.

"President Tao, you've been here for over ten days, and I've been wanting to have a chat with you. If you don't have anything urgent to say, please listen to my rambling."

"I've already stated my position. You are the Party Secretary, my superior within the Party, and a senior figure who has worked at Hongxing for decades. You are far more familiar with the situation than I am. Please speak, I am all ears."

"General Manager Tao, what I'm saying is absolutely from the bottom of my heart. I'm not talking about Party spirit, just conscience. I've seen what you've done in the past ten days or so, and everyone else has too. You come early and leave late every day, eat in the canteen instead of the special meals, ride your bicycle to the workshop, care about the workers' hardships, and bring a breath of fresh air and hope to our factory. To be honest, I admire you very much and am very happy. The higher-ups have sent a good leader to Red Star. What I want to say to you today is just what's on my mind. If I'm wrong, please don't be angry."

"How could that be? Please tell me." Tao Tang looked at Zhao Qingmin quietly.

"First, there's your personal life issue. I think you're too self-disciplined. Yes, we're all leading cadres, and we should take the lead in implementing organizational regulations in all aspects. However, egalitarianism has been criticized by the older generation. You can't say that if the leader rides a horse, everyone should ride a horse, right? Riding a horse is a work requirement. Even during the war, it was like this, let alone now. You're the head of a factory, and you're single. What's wrong with eating in a private kitchen? Who didn't eat in the canteen when they were young? Even if you try to make communal meals better, you can't make private meals any better. What if you develop stomach problems? General Manager Jiang is getting old and his health isn't good. General Manager Ma is in charge of production and spends almost half of his time at the grassroots level. If you ride a bicycle, how can they feel comfortable taking a car? These are all minor issues. You did the right thing, you did it well, it meets the new requirements from above, it's a mobilization order for the company leadership, and it's something we should all learn from. I'm just talking about a matter of proportion. It's not a big deal. But there are a few things I'd like to say."

Tao Tang remained silent, looking at Zhao Qingmin.

"Let's talk about this survey first. I know you want to understand the employees' thoughts so you can address the problem effectively. We can't ignore their opinions, but we can't just do whatever they say. Take wages, for example. It's not that we don't want to raise them, but we lack the resources. I can't let people ruin things. When Lao Song was in charge, he already realized this problem and studied salary adjustments more than once. However, due to limitations, we couldn't afford to raise them. Despite the difficulties, we still gritted our teeth and made an adjustment in 2011, increasing the average salary by 350 yuan. And what was the result? It created a lot of conflicts, and people are still complaining about it."

"Yes, many questionnaires mentioned that the last salary adjustment was unreasonable."

"Regarding the entertainment expenses... how long have you been here? People are already saying you're putting on airs."

"Oh? I really want to hear that."

"It's nothing else, it's because of the reception. To be honest, compared to before, there are far fewer guests. Our factory is a big one, from the province, the city, and the group, there's always a constant stream of visitors, which is actually quite normal. It's like daily life; a family that never sees anyone is definitely not doing well. For example, last week, the Municipal Environmental Protection Bureau came to inspect the environment, Zhou Bing invited you, but you didn't go, and Director Ping wasn't very happy. I heard it from Old Zhou. General Manager Tao, I've served as an administrative deputy, and I've been in this chair for five and a half years. If you're talking about understanding the general manager, I don't think anyone understands it better than me. There's no way around it; if you don't go and have a few drinks, people will be unhappy, and you might even get into trouble. One of the reasons Song Yue was investigated was for excessive eating and drinking. I won't lie to you, when the Discipline Inspection Commission questioned me, I spoke up for Song Yue, saying, 'Can't you just not eat?' If this is also a problem, then I, as the Party Secretary, also have a big problem... State-owned enterprises are tough, the leaders of state-owned enterprises are even tougher, and the top leader of a state-owned enterprise is the most difficult of all. If you don't meet the operating targets, you have to submit..." "It's not bad, but it's even worse if safety and stability are compromised. Especially in a very closed environment like Hongxing, you're like the head of the family. You can't ignore the employees' basic needs—eating, drinking, sleeping, everything—you have to manage them well. When you ordered the two children of workers from the power company to come to the factory, everyone cheered, but it put Xiao Liu in a very passive position. Once this door is opened, it'll be hard to close it later. The workshops are short-staffed, but the offices aren't. How many of these college graduates are willing to settle down here? This is a minor issue, Xiao Liu will understand. The key is the impact. You see, it could lead to a whole host of problems. The higher-ups have set personnel control targets, only decreasing each year, forcing the company to strictly control entry... And then there's the housing. First, there are rumors that our factory is going to relocate. Second, there are price restrictions. If it's too high, the employees won't do it; if it's too low, the factory can't afford it. The houses built in 2009 resulted in a loss of over 2000 million yuan in the audit results, and they're still on the books. It's not easy to do good things..."

Looking at Tao Tang's calm face, Zhao Qingmin felt he had gone a bit too far. "These aren't major problems. I can handle things, like personnel issues and the legacy of salary adjustments. I won't let these trivial matters distract you. But there is one thing I must mention... the marketing issue. After your trip to Donghu, Li Luo felt the pressure and told me about it. It's mainly about those contracts worth over 300 million. Li Luo feels you embarrassed him. It's not that he doesn't want to sign, but he's worried about the costs. Li Luo is capable, but he also has flaws. Since we're the top leaders of the Party and government, there are some things I can only say to you. Was the decision made a bit hastily? After all, there are financial opinions involved."

Tao Tang listened quietly.

"President Tao, you're the top leader, and Hongxing is your company. I know you're determined to make Hongxing a success, and I greatly admire your experience at Shengdong. That's probably the main reason headquarters transferred you here. I'll say it again: I absolutely support your work and will definitely back you up. But, President Tao, haste makes waste. Hongxing's situation is very complex; we need to take it slow."

"Thank you, Secretary Zhao." Tao Tang said after Zhao Qingmin finished speaking. "I also have some things I'd like to say to you. Consider it a heart-to-heart talk with the Secretary."

Tao Tang organized his thoughts. "Let's start with the questionnaire. Indeed, I just want to know what Hongxing's employees are thinking, what they want us to do, and what they don't want us to do... I've always believed that the interests of the company and the interests of the employees are aligned and there's no fundamental conflict. Because we are a state-owned enterprise, a national team, we can't just pursue profit maximization like Donghu; we have more responsibilities. Is this a burden? Not entirely. I firmly believe that even after more than thirty years of reform and opening up, and with the booming development of private enterprises today, in terms of management sophistication and employee quality, most private enterprises still lag far behind us, not to mention well-developed Party, Youth League, and mass organizations. I saw the provincial newspaper report the day before yesterday about the riots and disturbances at Foxconn in Beiyang. In private enterprises, the interests of business owners and employees cannot be aligned, but in state-owned enterprises, theoretically they can. Why is there a conflict between cadres and the masses? The reason probably lies with us, the senior managers of these enterprises."

Tao Tang poured himself a glass of water, took a small sip, and asked, "Secretary Zhao, what conditions do you think are needed to revitalize Red Star?"

"This is rather complicated." Zhao Qingmin was pleased that Tao Tang had opened up to him. "It's probably not something that can be explained in a few words. But I think that for a large factory like ours with such a heavy historical burden, simple methods probably won't work. We need a major opportunity, such as strategic restructuring..."

"That's just platitudes. You mean relocation, right? I don't think relocation will solve Hongxing's problems. First, it won't solve the market problem; second, it won't solve the technical problem; third, it won't provide sufficient financial compensation; and fourth, it will definitely lead to Hongxing's temporary withdrawal from the market... To be honest, I don't see any opportunity for Hongxing to take off as a result. This brings up a very serious problem: solving Hongxing's difficulties can't rely on Pingquan, nor on headquarters, nor on the province. Local leaders won't truly consider things from Hongxing's perspective; we're just pawns in their game. Ultimately, solving Hongxing's problems depends on ourselves. It depends on Hongxing's more than 20,000 employees."

Zhao Qingmin nodded. He agreed with Tao Tang's assessment. He had never hoped for the relocation of Hongxing. He was considering his own situation; relocation would bring countless conflicts. Tao Tang could focus on operations, but as the Party Secretary, he was responsible for stability, and he didn't want to be embroiled in endless trouble. Perhaps he wouldn't even be able to finish that major task during his term... But he dismissed Tao Tang's last sentence, deeming it pointless.

Tao Tang took a sip of water. "The Central Committee advocates the mass line and has put forward a series of specific requirements, which I think is a very wise move. The Central Committee has seen the crux of the problem. All the problems that have been exposed are inextricably linked to the leadership's detachment from the masses. The same is true for Hongxing; there's no need to shy away from it. What I want to say to you, or what I hope to reach a consensus with you on, is how to inspire the enthusiasm of the employees and ignite the concern of Hongxing's more than 20,000 state-owned and several thousand large collective employees for the company's survival and development! What a tremendous force that is! Why are the employees becoming increasingly antagonistic towards us? The responsibility lies with us, not the employees. It's easier said than done. Without hard work and sacrifice, we won't gain the trust of the employees. What I've done, and what I will continue to do, is for this purpose. It's absolutely not about seeking fame or reputation. My personal strength is limited; I need your support and the unified steps of both levels of leadership. We must let the employees see our sincerity and see that we treat them as the owners of the company, not just as laborers."

That's absolutely right. To put it simply, it's both an undeniable truth and utter nonsense. Zhao Qingmin looked at Tao Tang and lit a cigarette. He wasn't a heavy smoker, only smoking three to five cigarettes a day, usually only when he was upset.

"Gaining the trust of employees, or in other words, following the mass line, requires action, not just slogans. Take the specific issues we just discussed, for example. Excessive feasting is definitely wrong. I'm sure we have standards for hospitality, but we just don't strictly adhere to them. As for some government agencies complaining that I don't show up, that's just how I am at Shengdong. Let them be; I know my limits. For problems that are our responsibility, we will actively and within our capabilities rectify them. For problems that aren't our responsibility, they can't do anything about it. Regarding those two employees' children joining the factory, I have considered the follow-up issues. Personnel issues have always been sensitive; I understand. This is how I see it: we..." The factory's aging workforce is a serious problem. I saw some statistics; the average age is 35. On the surface, it doesn't seem that serious, but the reality is quite different. I asked Pan Chenggui, and he said that in recent years, the only new additions to the skilled workforce have been technical school graduates and demobilized soldiers, and their numbers are decreasing year by year. Every year, university graduates who join the factory go into management and technical positions. While it's good to have a reserve of technical staff, increasing the number of people in management positions isn't a good thing; it will only make the organization increasingly bloated. I think anyone who is a child of a factory worker and has a university degree should be allowed to join, but not necessarily assigned to a management position. Who says university graduates can't do skilled work? The key issue is still compensation. This involves reforming the salary system, which can't be rushed; it requires thorough research and a people-centered approach… As for my eating in the company canteen and riding a bicycle to the workshop, that's a serious concern. I know you care about me, but I will persist, and I hope both levels of leadership will follow suit. If I eat free meals every day and ride in a luxury car to the workshop, the employees won't see me as the general manager, but as the boss, as a capitalist. I won't hear any honest feedback, and I won't gain their support. Finally, there's marketing; I sense the biggest trouble lies here, and I've realized… There are some existing contradictions. Some may be due to the mechanism, while others are probably attributable to leadership. Marketing is the leading sector; if the leading sector droops, the rest of the company can't dance. I don't trust financial data; losses are always relative. I've been ruthlessly implementing lean management at Shengdong, which, frankly, is about saving money. You probably don't realize how much Shengdong has squeezed out of implementing lean management—it's been a dramatic process. Next, I will personally oversee this matter. What does "can't be done" mean? It probably means the existing management and operating model is no longer viable. I hope you support this. Anyone who stands in my way will be fired; there's no room for negotiation.

Zhao Qingmin thought of Ming Xiaoyue. His arrangement was perfectly in line, at least it was in sync with Tao Tang's rhythm... This was the general manager's job, and he had no right to interfere. "Don't worry about that, I will definitely support you and do my best to support you." He did not comment on Tao Tang's "speech," but he expressed his support for Tao Tang's preparations to focus on cost control and lean manufacturing.

"I know you want to get rid of the negative impact of the Yang-Song case as soon as possible, which is understandable. But simply making statements won't do. I'm not the Discipline Inspection Commission, nor the Anti-Corruption Bureau, and I can't guarantee that there aren't any problems within the leadership at both levels. It's better to remain still than to act rashly. Let's all quickly shift our focus to business operations. That's all for April. We must work hard in May and strictly adhere to the monthly plan. I'd like to hold a meeting before the holiday, not too large one. I'll talk about business operations and production, and you can talk about Party building and publicity work. Let's give the key cadres a heads-up and strive to deliver a good report card in May."

"Okay." Zhao Qingmin nodded. "President Tao, I don't mean anything by it. I fully support your idea. However, I still think you shouldn't be too self-disciplined. Oh, I'm not encouraging you to be corrupt, but your position is really not easy."

"Secretary, I am confident that I can motivate the employees, but it won't be possible without your support. I just mentioned publicity work; I've been paying attention to the broadcasts and the factory newspaper, and I have some ideas. How about this, I'll say a few words about publicity work at the meeting."

"That's great. You're the top leader, so your handling of publicity is a form of support for me."

The conversation lasted nearly an hour, and the atmosphere was generally good. Zhao Qingmin wanted to bring up Ming Xiaoyue's matter, but he held back. Tao Tang couldn't possibly bypass him to fill the vacant position in the finance department; he'd discuss it later. Zhao Qingmin then thought that reaching an understanding with Tao Tang would be beneficial to him, at least increasing his power. In this respect, he was clearly much better than Song Yue.