When will I have a long tassel?

"Well, there's no point in discussing that."

Wardenberg put an end to the blame game. The situation has become very clear. The Chinese have indeed developed machine tool products that can compete with PATEO. No matter how accountable the company is, this fact cannot be changed.

Everyone also understands in their hearts that the reason why the company is in this situation is not that the Chinese people do not respect martial ethics, but that PATEO itself is careless.

30 years ago, PATEO was very enterprising. The company invested heavily in technology research and development, and finally defeated its competitors and became a monopoly in this market.

Once it obtains a monopoly position, other companies in the market will no longer dare to covet this market, and PATEO can just sit back and earn high profits. At this point, PATEO no longer has the motivation to continue to improve its technology. It worked hard in the past just to be successful now. If you have to continue to work hard after your efforts, then what is the need for the previous efforts?

Lauther said that he has been working hard, and this kind of words is just put on the table to fool ghosts. The company used to allocate a lot of funds to the technology department, but the progress of technology was very slow. Rauser explained that this is because PATEO is already at the top of technology, and every step forward requires more costs, which is in line with the so-called law of "diminishing marginal effects."

The actual reason is that the technical system has slackened, engineers' wages continue to rise, and work pressure continues to decrease. Everyone claimed that they wanted to create some sentimental technology, but in the end they only came up with a bunch of flashy stuff to deal with in the boardroom.

If there was no competition from China, it would be okay for PATEO to do this. Anyway, in the market segment they control, there is only PATEO as a supplier. Users have to accept it or not. This is the benefit of monopoly. .

But there happened to be a China that was so poor that only 300,000 people could afford to drink Coke, and the rest could only drink Wong Lo Kat, but they were willing to tighten their belts, conduct research and development at any cost, and wished they could control all the technologies themselves. He will not give up until he has his hands on him.

The European Union has restricted the export of precision machine tools to China, forcing China to do it on its own, which PATEO can understand. But it is clear that PATEO has persuaded the EU to relax controls and the Chinese can buy these machine tools from PATEO at a discount. Why do you still need to do it yourself?

What would you do with saving those R\u0026D funds?

But now, does it still make sense to talk about this? A few years ago, PATEO might have gritted its teeth and spent a lot of money to compete with the Chinese in R\u0026D capabilities and try to squeeze the Chinese out of this market. But now the whole of Europe is in deep debt crisis. Although Germany is not a country in debt crisis, it has been dragged into the water and has to bear the obligation to rescue the "Four European Pigs". This is a typical situation where landlords have no surplus food.

Can we afford to compete with the Chinese for R\u0026D at this time?

You can afford to fight, but it will require everyone to live a hard life for a few days. Who would be happy?

"What do you think of what Short just said?" Wardenberg returned to the topic and asked everyone.

"There is no hope of recovery in the European market in the short term. At this time, we cannot lose the US market. Therefore, I think we must fight back to stop the Chinese's attempts." Paulin said impassionedly.

"But just now Short said that American customers require us to reduce prices by more than 50%, otherwise they will choose Chinese machine tools. Mr. Paulin, do you also agree with the request for a 50% price reduction?" Another person named Fu Luin's executive said coldly.

"Of course this is impossible!" Paulin shook his head firmly, "If the price is reduced by 50%, not only will we not make a profit, but we will also lose money. This is absolutely unacceptable."

"But if we don't lower prices, how can we stop the Chinese?" Fruin said.

Paulin said: "I think the Americans' request is just a kind of blackmail. In the past ten years, Americans have been clamoring for us to lower prices. Now they just have the option of Chinese machine tools, so their voices are Bigger. I know machine tool users very well. They will not change suppliers easily, because the cost of changing suppliers is far greater than the price difference they can save. Therefore, I think their request is just a Intimidation.”

Short said: "Mr. Pauling's words may make some sense. But the price difference between Chinese machine tools and ours is also a fact. American customers suspect that our profits are inflated. As Mr. Pauling said, in more than ten years, They said this years ago.

"Now, with Chinese machine tools as a reference, their demands will only become stronger. In this case, if we cannot make some concessions to make the Americans feel appeased, it is entirely possible for them to turn to the Chinese of."

"Concession is of course necessary." Paulin began to retract his words.

He knew that Short's judgment was reasonable. In the past, PATEO's machine tools were sold at high prices, and customers had no other choice but to hold their noses and admit it. Now that there is a second supplier on the market, it would be strange for customers not to take the opportunity to put pressure on them.

PATEO's machine tools are all high-end precision machine tools, and its users are naturally large companies that take high-end routes, such as Boeing, Lockheed Martin, Pratt \u0026 Whitney, etc. They also have personalities and tempers, okay? In the past, I had no choice but to accept your anger. Now that I have other options, why do people still look at your face?

"I think if it is a symbolic price reduction, such as a price reduction of about 10%, it is still acceptable." Paulin said.

"I talked with people from Lockheed Martin, and they categorically rejected the plan to reduce the price by only 10%, claiming that if the price reduction is less than 30%, there will be no need to negotiate. This does not include the attached after-sales service terms. As we all know, the advantages of Chinese products Not only is it reflected in the price of the product, but their after-sales service is more attractive to customers. Compared with our after-sales service terms, their after-sales service is simply free," Short said.

"free……"

Everyone took a breath of cold air. Damn, how can this be fun?

Machine tools are durable tools, and it is not surprising that some high-end machine tools have been used for decades. If machine tool companies want to maintain long-term profits, they cannot just rely on selling machine tools. Making money through after-sales service is a more important part.

For PATEO's after-sales service, the service fee is calculated by the minute. When the after-sales service personnel go to the customer's place, the time spent eating, drinking, and relaxing is counted. For replacing a handle, they dare to charge tens of thousands in maintenance fees. This does not include the cost of accessories for the original handle. You must know that the cost of accessories has always been sky-high.

Everyone knows how high the profit margin of after-sales service is. Even if Chinese companies only charge a 10% discount, they are still profitable, but for customers, it is indeed equivalent to free.

"The Chinese are so poor! They will have no profit at all if they do this!" Paulin shouted.

"I have warned the company from the beginning to be wary of the threat from China, but no one cares. The Chinese are just like the Japanese back then. They are good at keeping costs to a minimum and making it difficult for Europeans to survive. We in Europe People's lives are so comfortable, I can't imagine how hard Asians work." Fruin said with endless emotion.

Wardenberg didn't pay attention to Fruin's words. He said: "A 30% price reduction is something we cannot afford. The company's financial situation has been very bad in the past few years. It has suffered losses on its books for two consecutive years. In the U.S. market, according to At the current price, we can barely break even. A 10% price reduction means that we need to reduce some departments to avoid losses. And if the price is reduced by 30%, then we will definitely lose money. Instead of this, we might as well Give up the U.S. market.”

"But if we give up the U.S. market, we will be worse off," Fruin said.

"I know this." Wardenberg said, "So giving up the U.S. market is not an option for us. What we need to consider is to keep the U.S. market while maintaining the original price."

"Is it possible to consider suing China for dumping in the US market?" Rauser suggested.

"This requires the cooperation of American companies." Fruin said, "But the Americans will not do this. They are willing to see us competing with the Chinese so that they can profit from it."

"We can sue to the WTO." Rauser said reluctantly.

Short said: "We have already done this, but the WTO arbitration body found that our evidence was insufficient and asked us to provide additional evidence."

"Have you added anything?" Paulin asked.

Short smiled bitterly and shook his head: "Mr. Paulin, in fact, we don't have any solid evidence. The Chinese machine tools are cheaper because their labor costs and management costs are lower than ours. Our company structure is too It’s huge, and management costs are allocated to products, resulting in high costs. This is our problem, and the WTO will not support us.”

"So, according to this, there is nothing we can do to stop the Chinese?" Paulin asked.

Short looked at everyone and said: "There is a way, but it needs to be operated at the company level, and there will be a certain cost."

"Tell me about it." Wardenberg said calmly.

Short said: "The Chinese have broken through the barriers in machine tool design, and it will be very difficult for us to contain them in this regard. But we have studied that most of the key components used in the Chinese machine tools are from for Europe. If we can persuade European parts companies to restrict the export of key components such as spindles, guide rails, transmission mechanisms, etc. to China, then Chinese machine tools will be unable to deliver due to a lack of these components, and the Americans will have to accept our products.

"To convince these parts companies, our company alone is not enough. We need to unite other machine tool companies to sign contracts with parts companies, and this requires the company to pay some costs."