“Linhe First Machine Tool Factory, which we commonly call Lin Yi Ji, is located in Linhe City, Dongye Province. Lin Yi Ji was established in 1933 and was originally the Linhe Agricultural Machinery Factory under the National Government’s Resources Committee, mainly producing simple farm tools and repairing imported agricultural machinery.”

“After the founding of New China, the Linhe Agricultural Machinery Factory was taken over by the Linhe City Military Control Committee and renamed Linhe Machinery Factory. In 1953, Linhe Machinery Factory was transferred to the Second Bureau of the First Ministry of Machinery and renamed Linhe First Machine Tool Factory. With technology provided by the Soviet Union, it produced ‘Changying’ brand horizontal lathes, gantry milling and boring machines, and precision grinders, making it one of the country’s ‘Eighteen Arhats’ machine tool factories.”

The concept of the Eighteen Arhats factories refers to the 18 key state-owned machine tool enterprises formed through new construction, renovation, and expansion at the beginning of the founding of the country. These enterprises basically constituted the main framework of the new China’s machine tool industry. Later, due to needs such as war preparedness, some of the Eighteen Arhats factories were split, with their main production capacity moved to the western regions to establish new machine tool factories, which in turn affected the original factories’ production capacity.

In addition, various ministries and regions also established some new machine tool enterprises as needed, some of which had technical levels and production capacities not inferior to the Eighteen Arhats factories. As a result, the Eighteen Arhats factories were no longer the only backbone of the machine tool industry, and by the 1990s, few people even remembered this term.

However, the Eighteen Arhats factories were originally managed by the Second Bureau of the First Ministry of Machinery, and the term “Eighteen Arhats” was first proposed by the old director James Hughes of the Second Bureau. By the way, James Hughes has long since retired, but he still has considerable influence in the Second Bureau. Henry Sullivan was once James Hughes’s secretary in his early years and is considered one of his most trusted confidants.

In the eyes of the Second Bureau’s leadership, the Eighteen Arhats factories are their direct descendants, while other machine tool factories are either born of concubines, adopted, or simply “other people’s children,” so the emotional attachment is much less.

“How much do you know about the current situation of Lin Yi Ji?” Henry Sullivan continued to ask.

“Lin Yi Ji’s current original value of fixed assets is 200 million yuan, with a current value of about 100 million yuan. It covers an area of 900,000 square meters, has 6,800 employees, and 1,200 retirees. It owns more than 1,600 main production equipment. In 1992, sales revenue was 70 million yuan, with a net loss of about 15 million yuan. As for the 1993 data... I haven’t had time to look at it yet,” Franklin Turner replied.

After crossing over, he found his memory had become exceptionally good, able to remember many figures at a glance. He didn’t know if this was an innate talent left by the previous Franklin Turner, or a benefit given to him as a transmigrator by some advanced technology.

Henry Sullivan nodded again. Franklin Turner’s answer was very accurate. As a college graduate who had only been working in the ministry for two years, being able to grasp the industry’s situation to this extent was truly rare.

“What’s your view on Lin Yi Ji’s current serious losses?” Henry Sullivan decided to give Franklin Turner a good test.

Franklin Turner hesitated for a moment, his eyes darting around, his expression clearly hinting at something. Henry Sullivan was both amused and exasperated, pointing to the sofa beside him and saying, “Sit down and talk.”

Franklin Turner sat down without a moment’s delay, calmly straightening his casual suit, and then began to speak eloquently:

“Lin Yi Ji’s losses are not surprising. According to statistics, in 1993, the national machine tool industry had a loss rate as high as 60%. Half of the Eighteen Arhats factories were in serious loss, and many of the rest were barely surviving—just one step away from losses themselves.”

Henry Sullivan had already taken out a cigarette and lit it. He wasn’t particularly addicted to smoking, but when listening to Franklin Turner talk, he had to have something in his hand, or else he’d be tempted to smack the kid’s face every minute. Discussing business management issues properly, why did he have to make so many witty remarks?

“The reasons for so many machine tool enterprises’ losses boil down to external and internal factors. Externally, first, the state canceled mandatory planning, and last year the Ministry of Materials was abolished. Our machine tool enterprises were used to producing according to state plans. Now, without plans, they naturally don’t know how to survive.”

“Second, in order to facilitate GATT negotiations, the state drastically reduced import tariffs on machine tools, and imported machine tools have had a strong impact on the domestic market. The machine tools produced by our enterprises used to be like princesses who never worried about getting married—ugly and bad-tempered, but still in demand. Now, a large number of beautiful ‘brides’ have come in from abroad, good-looking and with dowries. Which prince would be blind enough to marry a domestic princess?”

Franklin Turner showed no sign of restraining himself, as if he had returned to his pre-transmigration days pitching project proposals. In that world where bragging was tax-free, if you didn’t say something shocking, how could you attract venture capital?

Henry Sullivan was grinding his teeth. I admit you’re right and your summary is excellent, but why do I just want to slap you?

Don’t get angry, I won’t get angry! When we get to Lin Yi Ji, I’ll have plenty of time to deal with this brat!

Henry Sullivan took a fierce drag on his cigarette, and the poor cigarette instantly shrank by half.

Chapter 5: A Forced Melon Is Not Sweet, But It Quenches Thirst

“As for internal factors, there are even more problems.”