Return to 78: Why are all the Americans panicking about doing scientific research?

"Please forgive me, Mr. Joseph. My next words may be a little harsh. If you want to have further career development, please listen to me patiently."

The world is bustling with people all seeking profit. As long as Lin Kaifeng grasps the essence of this sentence, he will be successful in everything he does.

Both the United States and the island countries are capitalist societies with highly developed economies.

Capitalist society only talks about one word: money.

Just now, Lin Kaifeng has expressed the meaning of cooperation very clearly.

Same product, same quality.

The final ex-factory price is completely different if it is produced in Dragon Country or in an island country.

"During World War II, the United States made a lot of money. After the war, your overall economy ranked first in the world. From the late 1940s to the present, per capita income has been rising year by year, causing labor costs to rise accordingly."

"The high labor costs have become one of the biggest expenses for business development."

"As a defeated country, in order to rise as quickly as possible, the island nation has been doing OEM for the West, providing all the goods you need, reducing labor and other costs, and its goods have begun to gain a reputation for being high quality and low price."

"Soon, a large number of goods from the island countries poured into the U.S. mainland, causing unimaginable impacts on your local manufacturing and other industries."

"As time goes by, the labor costs of island countries have also begun to rise. The increase in labor costs is an inevitable stage of economic development. In the future, labor costs will continue to increase."

Lin Kaifeng pointed out incisively why U.S. domestic products cannot compete with products from island countries.

The reason.

To sum it up in one sentence, labor costs are too high.

Manufacturing costs in all aspects of the United States continue to increase. The island countries have taken advantage of this and exported large quantities of cheap goods to the United States.

"Although your words are harsh, I have to admit that what you said is indeed true."

"The labor cost in the United States is really very high. This high cost is not only reflected in the manufacturing of goods, but also in other aspects."

Joseph took in the meaning of Lin Kaifeng's words with a complicated expression.

Lin Kaifeng said all this simply to tell Joseph a harsh reality.

As labor costs in the United States continue to increase, the plight of the domestic manufacturing industry will continue for a long time.

As for island countries, labor costs in production are also increasing step by step.

After all, the island nation has become the world's second-largest economy.

The per capita GDP is only slightly less than that of the United States.

Every word Lin Kaifeng said was harsh, but Joseph did not feel any dissatisfaction. Instead, he was quite impressed by Lin Kaifeng's insight.

As a senior professional manager of Best Buy Group.

Joseph knew better than anyone that U.S. manufacturing was on the brink of transformation.

Senior US officials are planning to move some industrial production lines overseas.

It is estimated that it will not be long before a series of manufacturing companies will move out of their home countries, open factories abroad and look for OEM factories to reduce the high domestic operating costs.

Lin Kaifeng said: "In our country, the monthly salary of a senior technical worker is only about 100 yuan, which is equivalent to 50 US dollars according to the official exchange rate."

"Of course, the official exchange rate is a price without a market. According to the black market exchange rate, the actual exchange rate between domestic currency and your country's US dollars is about 1:5 to 1:6."

"It's equivalent to a high-level technical worker in our country who can only earn a dozen dollars a month."

"Mr. Joseph, you might as well suggest to your company's top management to transfer all the goods you need to our company for manufacturing."

"Compared with island countries, Dragon Country has a broader market and a relatively complete industrial chain. Although there are some defects in the supporting production of various household appliances, overall, the situation is still good."

Lin Kaifeng calculated the financial account for Joseph bit by bit.

There are a large number of state-owned factories and enterprises in Longguo.

These state-owned factories all have their own technical areas of expertise.

Through the large industrial chain, Lin Kaifeng brought together some factories in the urban area and the province, making them supporting agent processing factories of Northern Machinery Company.

Last year, relevant departments of Longguo issued the policy of "three-in-one" and "one subsidy".

Provide foreign investors with three options for cooperation.

Provide equipment, provide production materials, or directly provide product drawings and production requirements.

Domestic enterprises help with processing.

In addition, the relevant departments also gave foreign investors a series of preferential compensation.

Including reducing taxes and providing policy assistance.

"In order to reduce sales costs, your company adopts the purchasing method of placing large orders from suppliers. Instead of placing orders from Western and island countries where labor costs are getting higher and higher, why don't you choose our company?"

"It is undeniable that the island country is the world's largest exporter and producer of home appliances. The development of home appliances in our Dragon Country is also not weak."

"Compared to the island countries, we only lack some of the core materials for producing home appliances. I can find a way to solve this problem myself, or your company can provide some of the raw materials for production."

"After two days of seeing and hearing, you should know that Northern Machinery Company is not an ordinary joint-stock enterprise. Our company has a good cooperative relationship with many local and provincial manufacturers and factories. In addition, the municipal government and other relevant departments are very optimistic about our company and have provided a lot of policy support."

"All the home appliances that Best Buy needs can be manufactured by machinery companies. With the reduction of labor costs, Best Buy's procurement costs will also decrease."

"Your company has always advocated giving benefits to consumers. If the overall cost remains high, even if consumers get a lot of benefits and go to your company to buy home appliances every day, your company's sales will increase, but the overall profit will not increase much."

"There may even be a situation where sales are booming but profits will show an ugly negative growth."

Joseph looked at Lin Kaifeng without saying a word.

Every word Lin Kaifeng said was about the problems that Best Buy Group is facing now.

Since its establishment, the group’s aim has been to benefit consumers.

Let consumers buy the most satisfactory products at the lowest price.

The idea is good, but the reality of the economic market is extremely cruel.

A large portion of the various electrical appliances sold by Best Buy Group come from the island country.

In the early years, the island nation's electrical appliances were known for their high quality and low prices.

As the 1970s approached, the prices of the island nation's exported home appliances became increasingly higher.

Even though Best Buy Group purchased in large quantities, it still faced the unfavorable dilemma of declining profits.

From yesterday to today, Joseph gained a direct understanding of the production capabilities of Northern Machinery Company.

Whether in the provincial capital or locally, Northern Machinery Company is the largest enterprise.

In the absence of a complete industrial assembly line, Lin Kaifeng found another approach by packaging the goods into more than a dozen pieces and handing them over to supporting enterprises for production and manufacturing.

Finally, the machinery company carries out the final assembly.