Engineering Blog

Manufacturing industry enters the era of capital, are you still making cars behind closed doors


When our workers work hard in the workshop, no one will deny the sweat they have paid. However, the current situation of China’s manufacturing industry is going from bad to worse, which is also an incorrect fact. What’s the problem? Let’s explore the root cause.

“6 + 1” industrial chain mode and large logistics links

Manufacturing is not the whole value of a product, which is the basic common sense of economics. However, it is not easy to estimate the proportion of manufacturing link in product value. Let’s look at a set of data: take the Barbie doll produced in Dongguan, Guangdong Province as an example. Its ex factory price is only $1, and the final price on Wal Mart shelves in the United States is as high as $9.9. In other words, for every dollar that workers bring to themselves, they create nearly nine times the value of other parts of the product. Almost all of the nine times of the value fell into the hands of Barbie’s mother, the American enterprise. This has led to the formation of an abnormal growth mode of trade between the two countries. China’s manufacturing industry, which takes time and energy, consumes resources and pollutes the environment, can only get a small part of the whole industry chain.

According to the theory of economist Professor Lang Xianping, the industrial chain can be divided into “6 + 1” mode, that is, product design, raw material procurement, warehousing and transportation, order processing, wholesale operation, terminal retail and manufacturing, and the former six are also collectively referred to as large logistics links. It is this big logistics link that divides 90% of the value of products. Similar examples have been repeated countless times. For example, the famous Foxconn OEM for Apple’s iPhone in the United States, and each phone only earns 25 yuan. It’s chilling to think about it. In this way, many Chinese manufacturing enterprises are struggling to support themselves with meager profits, while their foreign employers are making a lot of money.

Industrial capital and financial capital control industrial chain

The reason for the above situation is that the industrial chain is firmly controlled in the hands of two “giants” in developed countries, which are called industrial capital and financial capital respectively. They firmly hold the “6” of the “6 + 1” firmly in their hands, and throw the “1” which is the most bitter, the most tiring and the least oily, to the developing countries. In China, a big manufacturing country, in order to support hundreds of millions of cheap labor, we have to accept this unfair treatment.

If it is not the most tragic result to be employed, then the acquisition will undoubtedly make some manufacturing enterprises never turn over. In 2001, Anheuser Busch international acquired 27% of the equity of Qingdao Brewery by buying bonds and converting them into stocks, becoming the second largest shareholder of the old brewery, and only 3% less than SASAC, the largest shareholder. In 2004, Carlyle fund actively operated the acquisition of Xugong, a construction machinery manufacturing enterprise, although it failed in the end But it is enough to arouse our vigilance.

The industrial capital represented by Anheuser Busch international company and the financial capital represented by Carlyle fund are eager to try for the Chinese manufacturing enterprises in trouble. Once the acquisition is successful, they will put the enterprises in their industrial chain structure on the spot. The workers are Chinese workers, the resources are Chinese resources, and the environment is the environment of China. However, most of the profits flow to China On the other side of the ocean, into their pockets.

Industrial chain integration is the key to anti capital control war

Many manufacturing enterprises with strategic vision have realized the seriousness of the problem and have not chosen to wait for death. They try to recapture the commanding height of industrial structure in their own way.

Haier has tried to acquire Mattel, which has a large logistics system, TCL has completed the acquisition of Alcatel and Thomson, and BenQ has successfully acquired Siemens mobile technology. However, in the end, these acquisitions did not produce the desired results for two reasons. First, the developed countries that are good at plundering the industrial chain of other countries have already protected their core interests strictly, and it is difficult for outsiders to get their hands on it; second, even if we have mastered the relevant resources, we are still only the first step in the long march. Only through strong integration and radical innovation can we make this industrial chain develop its maximum value.

Among Chinese enterprises, Weisman group in Zhuhai has set an example for the integration of industrial chain. The person in charge of the enterprise fired all the stubborn and rigid department heads, promoted a group of creative new people, and successfully compressed the process cycle of “6 + 1” mode from 180 days to 15 days in half a year. Huawei Group is also worth mentioning. The “6 + 1” industrial chain management system, which was designed by Huawei Group with huge investment, has also achieved initial results in the fierce market competition.

Perhaps compared with western countries, our industrial chain integration still belongs to the level of “middle school students”. Maybe we have a long way to go in the future, but the examples of success or failure around us have pointed out the right direction for us. If you don’t want to continue to eat the scraps of industrial capital and financial capital, or even become their prey, it’s time to do something for the regulation and integration of our industrial chain structure.

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