Chapter 361 We all have plan B

Li Weidong came to Whirlpool's headquarters again and met Smith.

Mr. Li, I didn't expect that we would meet again so soon. Smith then asked, It must be quite exhausting to travel between the United States and China in a short period of time, right?

After the last meeting, I didn't return to China. You know, as a Chinese, it's not easy to come to the United States. It's very troublesome to apply for a visa, so I took this opportunity to stay in the United States for a while. Time to visit places of interest all over the United States. Li Weidong replied with a smile.

Smith nodded: That's true, for those who want to come to the United States, the visa officer is indeed a big obstacle, and the immigration bureau is also very troublesome.

The two exchanged a few more words before Smith asked, Mr. Li, what's the matter with you coming to see me this time?

I mentioned the suggestion last time to move the microwave oven production line to China. This time I made a detailed plan, and I hope Whirlpool can think about it again. Li Weidong said and handed a document to Smith.

Smith took the plan and didn't open it. Instead, he said, Mr. Li, I really don't want to talk to you about the microwave oven. I've been worrying about this damn microwave for a week!

What happened? Li Weidong asked.

We had a strike at our microwave plant in Wisconsin, and it's been down for almost a week now! Smith didn't hide it either.

A strike such as a strike cannot be concealed even if it is concealed. In many cases, the trade union will take the initiative to tell the local media about the strike in order to generate public attention.

Li Weidong, the culprit, showed a surprised expression and asked, pretending not to know, Why are the workers on strike? Is it because they are not satisfied with the wages or the working environment.

They want a raise! Smith replied.

So it is. Li Weidong nodded suddenly, and then asked, Is Whirlpool's salary for workers very low?

Our workers make $10 an hour, Smith continued.

Although I don't know much about the situation in Wisconsin, I don't think an hourly salary of $10 should be considered low, right? Li Weidong deliberately favored Whirlpool.

Smith immediately said: Of course, $10 an hour is not a low salary, but the union is still not satisfied, they even asked for a 20% pay rise!

20%? So much! It's too far. I think even a salary increase of 3% is very impressive! Li Weidong said.

A 3% salary increase was exactly what Whirlpool thought, and Smith immediately felt like he had found a bosom friend.

So Smith opened the chat box and began to complain to Li Weidong. The content was nothing more than how greedy the union was, how shameless the union was, and how mercenary the union was.

While listening, Li Weidong nodded and said yes, watching the American capitalists complain about the union, which was a little cool.

After complaining for a long time, Smith continued: We did not agree to the demands of the union, so the union organized a strike, and we had several rounds of negotiations with the union, but the price proposed by the union was too high, and it was impossible for us to do so. accepted.

Li Weidong said immediately; Mr. Smith, if the factory is closed for one day, you should lose a lot of money, right?

Smith nodded: Our factory in Wisconsin has an annual output of 200,000 microwave ovens.

Li Weidong made a quick calculation in his mind. The public holidays and paid annual leave in the United States add up to about 25 days, plus 52 weekends. The average American works less than 240 days a year.

In this way, the microwave oven factory will lose more than 800 microwave ovens for every day of shutdown. According to the ex-factory price of 400 US dollars per microwave oven, the microwave oven factory will lose more than 300,000 US dollars for one day of shutdown.

According to this calculation, Whirlpool has lost 15.6 million yuan in the week that the microwave oven factory was shut down! With such a big loss, the executives of Whirlpool should feel pain in the flesh!

Thinking of this, Li Weidong said: Mr. Smith, I think Whirlpool should seriously consider my suggestion and move the microwave oven production line to China, which is of great benefit to Whirlpool.

In addition to what I said before, the production cost is reduced by $35, and the Japanese products can be driven out, moving the production line to China, Whirlpool will no longer have to worry about greedy and shameless unions!

Smith took a deep breath and said, Mr. Li, I personally support your idea, but as I said before, our executives are relatively conservative, and they don't want to move the production line out of the United States.

Li Weidong said: At this time and another, didn't you have the problem of union strikes? But now, your workers are on strike and continue to keep the microwave oven production line in the United States. Whirlpool suffers hundreds of thousands of dollars every day. dollar loss.

What's more, this time will definitely not be the last strike of the union. As you said, the union is greedy, they are like a black hole, and you cannot meet the demands of the union. Even if Whirlpool agreed to the union this time, what about next time? What about next time?

The union will keep making new demands, more salary, more vacation, better working environment, more expensive medical insurance, separate dental insurance, they always have an excuse to ask Whirlpool for more, is Whirlpool willing Do you face a union strike every year?

As long as the factory is still in the United States and the production line is still in the United States, Whirlpool has to face the endless entanglement of labor unions and endless demands.

On the contrary, if Whirlpool is willing to hand over the production line to me, then the union problem can be solved once and for all! No strikes, no labor negotiations, no one asking for a raise, taking a vacation, asking for a better working environment, and Whirlpool can even save a fortune on health insurance!

There is no basic medical insurance in the United States, all of which are commercial medical insurance, so the price is ridiculous. Although there is a kind of medical insurance that can cover the whole family with one insurance, the cost is more than three times that of single-person insurance, and three-quarters of it must be paid by the employer.

Good companies will buy more expensive medical insurance for their employees, so that when employees are sick, they can enjoy more reimbursement and can go to better private hospitals for treatment. Those on the Internet who say that the price of medical services in the United States is mostly low, must be paid out by medical insurance of several thousand yuan per month.

In addition, dental insurance is not covered by medical insurance and must be purchased separately. Moreover, seeing a dentist in the United States is just as expensive as in China. A car is lost every time a tooth is seen, and a suite is lost every time a tooth is seen.

Therefore, in the labor-management negotiation of the labor union, medical insurance and dental insurance are also the focus of the negotiation. Unions demand better health insurance from employers, and employers of course want to save money on health insurance to cut costs.

In the early 1990s, industrial automation had not yet spread to the home appliance industry. For example, the assembly of microwave ovens, like the OEM of electronic products today, required a lot of manpower and was a labor-intensive industry. The more employers work, the more health insurance they have to pay.

So when it comes to saving medical insurance, Smith's face is moved. For Whirlpool, this is a huge expense.

I just heard Smith say; Mr. Li, I will read your plan in detail. If there is a suitable opportunity, I will also mention your suggestion in the management meeting room.

...

In Whirlpool's management conference room, the discussion of the strike at the Wisconsin microwave oven factory resumed.

Whirlpool's CEO is not young, and he is also a representative of the company's conservatives.

At this time, the CEO said with a displeased face: It's already the second week, why hasn't the strike been resolved? The board of directors is very dissatisfied, and the company's stock price has been on the rise for the past few trading days. Down! We need to resolve the strike right now and get the microwave factory back into production as soon as possible.”

Someone immediately replied: But the demands of the unions are so high that it is impossible for us to meet their demands. If the hourly wage is increased by $1, it will cost each worker nearly $2,000 per year!

Another person said: If it's just one factory, we can still afford this kind of salary increase. But we have dozens of factories across the United States, and I'm worried that there will be a joint reaction!

For example, in Wisconsin, in addition to microwave oven factories, there are also air conditioner factories, washing machine factories, refrigerator factories, and TV factories. The labor unions in those factories are also watching.

If we agree to the conditions of the union of the microwave oven factory, then the unions of other factories will definitely put forward the same conditions. If we do not agree, they will also launch a strike!

We employ nearly 100,000 workers in dozens of factories across the United States. If each worker spends an extra $2,000 a year, it will be a price we cannot afford!

Another said immediately; Moreover, we will never be able to fill the belly of the union, this time the union is asking for an hourly wage increase, and if they succeed, next time, they will ask for more! So we must not Promise the conditions of the union!

The CEO frowned, and he said, I know what you're talking about! But I want solutions, not excuses!

The person who spoke before replied: I think there is only one way to do it now, so continue to wait. Since the differences in the negotiation are so big, we will compare our patience with the trade union to see who can't stand it.

For us at Whirlpool, it's true that the microwave plant loses hundreds of thousands of dollars for every day of shutdown, but for the workers, if they don't get paid, then they don't have the money to pay their checks and loans, and they go bankrupt !

So I think as long as we hold on and never lower the conditions, the workers will naturally come back to work after a long time, because they need this salary to support their families!

The CEO shook his head: In the war of attrition, of course we can last longer, but the board of directors doesn't give me so much time, and I have to be responsible to the shareholders!

Without addressing the strike, our stock is falling every day, and the board of directors comes to me every day! If I continue to wait, maybe the workers haven't returned to work, and I'll be fired by the board first!

But if we agree to the union's request, our production costs will increase. And it may trigger a chain reaction. If other factories ask for a raise, our stock will fall even more. The man said.

At this time, Smith finally said: I have an idea. Remember, I mentioned last time, move the microwave oven factory to China? I think it's time to seriously consider this proposal.

Impossible, we are an American company, and our main market is also in the United States. Taking root in the United States is the foundation of our Whirlpool survival! We must maintain products made in the United States! Immediately, conservatives objected.

But now, our factory has been paralyzed! Smith spread his hands and continued: The paralyzed American manufacturing is not only useless to us, but a burden! Moving the microwave oven factory to China will be a burden to us. In terms of benefits and harmless!

Later, Smith repeated the benefits of moving the factory to China, such as reducing production costs by $35, such as being able to drive Japanese brands out of the US market at low prices, such as not having to deal with the insatiable appetite of unions, such as No more medical insurance for employees. In short, it is to repeat what Li Weidong said.

In fact, when Smith put forward this proposal last time, some executives were interested, but after all, most of them were conservatives, so Smith’s proposal was rejected by executives who were superstitious about American manufacturing without much discussion.

But this time is different. The microwave oven factory's strike has been going on for more than a week, and the entire microwave oven factory has been completely replaced. Even normal production cannot be maintained. What about American manufacturing?

What's more, the board of directors continues to put pressure on the management to solve the strike problem as soon as possible.

This is tantamount to hitting a snake with seven inches. The management may not care about other things, but for example, if they care about the board of directors, even the conservative management has to seriously consider Smith's suggestion.

Next, everyone started a new wave of discussions on Smith's suggestion.

For Whirlpool, moving the microwave oven factory to China can indeed maximize profits, but it is also difficult to get these conservative corporate executives to abandon American manufacturing.

After discussing for a long time, the final conclusion is that moving the microwave oven factory to China does have various advantages, but I still want to continue to make it in the United States.

However, the big knife hanging over the head of the board of directors makes the CEO have to make a decision.

The CEO coughed dryly and said, I think it's the same, we'll give the union one last chance and tell them that if they don't compromise, then we'll move the factory away, and they'll have a career!

If the union still refuses to compromise, we will go to the Chinese to negotiate the relocation of the production line. This plan to relocate the factory to China is considered our plan B!

...

The next day, Smith came to Milwaukee and met with Taylor and other union officials. And tell the people in the union that if the union continues to hold out, Whirlpool will close the Milwaukee microwave plant, relocate it elsewhere, and all the workers will lose their jobs.

This move really worked, and that afternoon, there was a heated discussion within the union.

If Whirlpool did close the factory, wouldn't we be out of a job? That's not good, I still have 20 years of home loan to pay, and if I lose my job, I'll go bankrupt!

We are just asking for a salary increase. I think the 6% salary increase proposed by Whirlpool, and the salary increase is not allowed for two years, is already a very good condition. We might as well agree to this condition first, and the big deal is two years later. Just ask for a raise!

It makes sense. It's better to get the 6% salary increase first than to lose your job!

After being frightened by Whirlpool, there were indeed different voices in the union.

However, some people objected: I think Whirlpool is just bluffing, it is impossible for them to close the factory! If the factory is closed, how can Whirlpool make money, do they want to give up the microwave oven business? Then they will lose even more!

That's right, even if Whirlpool were to move the factory, it would be difficult to find other suitable places. In the Great Lakes region, the cost of labor in our state of Wisconsin is already relatively low. When they go to other places, the wages the workers demand. only higher!

Yeah, Whirlpool wouldn't have moved the factory to Mississippi or Louisiana! That's not a good place to build a factory!

Mississippi and Louisiana are among the poorest states in the United States. These two states are traditional southern agricultural states, with the lowest per capita income in the United States and a relatively large African-American population.

In the early 1990s, the African-American population in these two states exceeded 30%, and by 2020, the African-American population will be close to 40%.

Because they are located in the south of the United States, the climate is mild and pleasant, and farming can be done almost all seasons. Therefore, the agriculture in these two states is very developed, but the industrial base is relatively weak, and it is not suitable for the establishment of manufacturing factories.

At this moment, someone looked at Taylor and asked, Taylor, what do you think?

I think it is impossible for Whirlpool to move the factory. They are just scaring us. As long as we persist, Whirlpool must be the last compromise!

Taylor paused for a while, then continued; Even if Whirlpool does not want to make money and really closes the factory, we don't have to worry about business problems, don't forget that Mr. Adams from New York! He will soon move the factory to a new location. Milwaukee is here.

Will that Mr. Adams really come to Milwaukee to build a factory? someone asked.

Of course. Taylor nodded and continued; Mr. Adams has already started to look for factories. As far as I know, he has found several real estate agents, and has seen more than a dozen factories, and has already taken his fancy. Three suitable places.

Even if the Whirlpool factory is really closed, we can take the compensation, enjoy two months, go on vacation, and when we come back, we can directly work in Mr. Adams' factory. And Mr. Adams' factory offers an hourly wage of $12, which is higher than our current wage.

So we don't have to worry about the closure of the factory at all, we have to continue to spend with Whirlpool until we get what we deserve. Because we still have a way out, Mr. Adams' new factory is our plan B!