Rekindle 2003

Chapter 738: Once you take the wrong path, every extra step you take is a reason to get beaten.
'When the market falls sharply, will consumers really take action? '

Emperor Yun was excited when he spoke, but when Chen Yue heard the words, a pair of auspicious eyes revealed a playful look.

Qing Yun suddenly felt a little confused. What kind of look is this?
Did he make a mistake?

Then he discovered to his horror that the three women in front of him were all giggling like crazy.

Lord Qianying was rolling on the ground in an exaggerated manner.

Just when he was puzzled, Qin Manman, who was full of laughter, put his hand on his shoulder and said intermittently,

"Brother...I can't do it anymore...this example...you gave the wrong example."

Seeing that her smelly brother looked wrong, she quickly stopped her smile, tilted her head and thought for a moment, then continued,

"It's not that you raised it wrong, it's just that you asked the wrong person. All three of us took action during that crash."

As he spoke, Qin Manman pointed at Chen Yue and Tang Qianying, "When Haifa Bank went bankrupt and dealt with the debt package, my dad listened to the advice of Tang's father and Tang's mother, and through Yueyue's father's relationship with Urban Construction, he got the plan. Figure, a few pieces of land were built in Sanya and a hotel was built.”

After saying that, she shrugged, "Of course, Father Chen and Father Tang are also small shareholders.

So, these two are actually invisible little rich women. Just by sharing the dividends, they will have enough food and clothing for their entire lives. "

When Qing Yun heard this, his face suddenly became constipated.

What the hell...

What can I say?
It can only be said that anyone who can play with a big dog family is not a good person.

Seeing that something was off topic, Chen Yue quickly changed the topic, "But most people will definitely not take action.

I remember clearly that it was 98, and the house prices in Sanya had dropped to more than 800 yuan. Qin’s father got the land through debt restructuring. It was very cheap, and the price should be less than half of the market price. "

Qin Manman nodded, "The converted land cost is only 300 yuan per square meter, which is similar to the price of industrial land in Jincheng.

This is how Hopu Group's hotels and real estate sectors came about.

We have never acquired new land. When the real estate bubble burst and countless developers were hit by thunderstorms, we took advantage of the situation and took over the land and converted it into hotels. "

Only then did Qing Yun understand why Qin Tianchuan got involved in an asset-heavy industry like the hotel industry.

It's cheap enough.

No wonder Sun Hongbing felt that he was about to explode, so he immediately went to Qin Tianchuan to be the knight on the white horse.

Chen Yue continued, "As an ordinary consumer, I would think that since one real estate developer has done this, then another one is not far away.

And the first to die will definitely be small real estate developers. Their houses may not satisfy me. I will wait and see. "

At this point, she also understood, "Maybe, I will wait until the end, and maybe I won't make a move."

Qing Yun nodded, "This is human nature, buy up and not down.

Therefore, once this happens to one company in a large industry, consumers will have a wait-and-see mentality, which will make other companies in the industry even more difficult, and eventually the entire industry will collapse.

Then the employees in this industry will be ruined, which will then spread to the families of the employees, and then it will become a systemic financial crisis for the entire country.

This has happened in history. During the Great Depression of the last century, this scene was played out in various countries.

Back to the micro level, we ourselves are the best example.

When we annexed TOP, the key factor was to create momentum so that banks had to withdraw loans from TOP.

But you have also seen that banks actually don’t want to take out loans at all, it’s us who force them to do so.

Then after we annexed TOP, faced with tens of billions of dead debts, banks were the first to come to us to renew our loans and extend them.

We didn't ask for them, did we?
In this world, they are the ones who most want us to develop.

But this is not a good sign.

We have profitability and can gradually repay the loan, but what about those who do not?
This approach of the bank is to see which unlucky person will be the last fool.

Finance and industry are a blurred zone. Finance can control industry, but industry can backtrack and kidnap finance. "

Seeing that Chen Yue understood, Qing Yun continued, "Now back to Morgan's case, you will be able to understand what I am going to say next.

When America's industry experienced large-scale overcapacity and everyone could only survive through vicious competition, Morgan reorganized America's largest industry, the steel industry.

His restructuring was actually very simple, he went to the bank.

Why go to the bank?
loan.

He told the bank, 'You all know the current situation in the steel industry, and if it continues you will be doomed.

The only way before you now is to consolidate all the steel plants in the United States into one.

If you can't do this, I'll do it. But I'm short of money, so give me money. '

What is he going to do?
The first is to remove post-drop productivity. Even if we have backward production capacity, stop working on it. Don’t linger on. Get rid of all of them and directly make unified purchases from upstream mines.

The second is to unify supply across the market and not allow price wars.

He told the bank that only in this way could this industry have a future, so he needed money to take over these steel plants.

Morgan believes that it is cheapest to take over the steel plant at this time, because everyone is losing money and many people have no expectations.

At this time of mergers and acquisitions, it is impossible to say that a premium of 5 times or 10 times is impossible. It can maintain your net worth, give you money at a discount, and make you out of business.

So Morgan persuaded the American banking industry to give him money, allowing him to start a very large-scale industrial integration, absorbing 808 small and medium-sized steel mills out of the 785 steel mills in the United States.

His method of annexation is very simple.

He said directly to the owners of these steel plants, 'How much capacity do you have? How many assets? How much residual value is left? Bring it in exchange for money.

If you want cash, I'll give it to you immediately, with a 40% discount on the residual value.

But it can also be exchanged for shares. I am going to merge you all into a super large steel company. You are worth 20 US dollars, and I will exchange it for you with stocks worth 20 US dollars. It can also be half in cash and half in stock. '

At that time, many steel company bosses felt that Morgan was a lunatic!
The property was almost finished, but he still bought it, so everyone happily completed the transaction. Some people exchange shares, and some people exchange money.

But there are also clear-minded ones. For example, there is a steel company in central America who is very impressive. He told Morgan, 'I'm going to fight you hard!' You buy but I don't sell'.

Because he saw clearly that as long as it survives this consolidation period, the industry will be profitable.

Later, Morgan bought out the railway company in front of him, and then asked the boss of the company to give up all the equity within a time limit.

He said, 'If you don't sell it to me, sorry, this railway will be out of service. If you can't transport your ore in and pull out the steel, just wait to die! '

In the end, the steel mill could only be sold, and it was sold at a 40% discount, because Morgan said, if you make me unhappy, my emotional value is also valuable.

This also served as a warning to the monkeys.

So, he used various methods to integrate all the steel industries across the country, and after buying them, he established Aramco Steel Company.

This company controls 90% of the production capacity of America's steel industry, and most of the steel market in North America supports this steel company.

As a result, its economies of scale began to emerge.

At this time, his procurement of mines was monopoly procurement.

He said to the mine, 'Are you going to sell it to me? Just go for this price! If you can't pay this price, then I won't consider you. I'll buy another one, but just wait until you die, because 90% of the US volume will not be with you. Don't worry, I am not a violent monopoly. I don't want 100% of the profits. I will return to my normal 10% of profits, and everyone will make money. '

After hearing this, the mine had no choice but to surrender obediently. If he didn't sell it, he would die.

But this place must be mentioned. Morgan still controls all the railroads in the United States. If the mines are not sold to it, its ore cannot be transported out at all. "

Hearing this, the three women all took a deep breath.

The business has reached this point...

It is indeed domineering and leaky.

"Actually, in my opinion, monopoly is the most efficient way to save social resources. Every industry will eventually move towards monopoly. Let's not talk about whether monopoly is good or not.

'Cost reduction and efficiency improvement' coupled with 'removal of ineffective production capacity', and the concentration of production capacity in advantageous factories with higher production efficiency. Morgan's two actions made Aramco Steel the most profitable company in the United States at that time.

Here! Relying on this method of negotiation and share exchange, Morgan did not spend all the money he borrowed from the bank, less than half.

As a result, this part of the funds became his operating funds, which turned over quickly.

Soon, he paid off America's bank loan.

At this point, have you noticed that Morgan is like a white wolf who obtained the steel group in the United States with nothing? He didn't spend a penny of his own money.

At the same time, Morgan's approach has inspired a group of people to do this, and many people are learning from him.

For example, Rockefeller integrated four domestic oil companies in America to form a trust and became Mobil Oil.

In 1880, the cost of a factory with a daily production capacity of 1500 to 2000 barrels was 2.5 cents per gallon.

By concentrating production on a few factories, by 1885, the above-scale refinery could maintain a daily output of 5000 to 6000 barrels of wood, while its cost dropped to 1.5 cents. This was the effect of industrial integration.

Durant promoted the merger of more than 200 auto manufacturers into General Motors, and together with Ford, he controlled the U.S. automotive order for more than 100 years. "

Speaking of this, Qing Yun smiled, "This is one of the three reasons why I still entered the computer industry even though I knew it was a red ocean.

When an industry has overcapacity and enters a period of consolidation, do you have room?

In fact, there are.

Scale is space.

How to find a way to bring together 50 companies in the industry? This is a huge space.

It is no longer possible to reduce costs to the limit by relying on a single factory, and can only adjust structural efficiency.

Structural efficiency means that 50 companies are put together, and then half of the costs are cut off, and the rest is full production capacity.

If supply exceeds demand, that factory must be making money, right?
Factories are not making money because their production efficiency is insufficiently utilized.

Every day, if the production is full today and stopped tomorrow, what kind of money can you make?
Unearnable.

Concentrate production capacity in a small number of excellent factories. Almost all industries will reach this stage, and in this stage it is a reincarnation process.

We are in this process now.

In the long run, in the face of this trend, to me, all companies in the industry will prosper if they follow me, and perish if they go against me.

All companies must eventually grow bigger, and there will be no small businesses in mature industries.

Only with scale can there be economic efficiency, and only then can there be room for further industrial cost reduction and efficiency improvement.

There is no economic space for small-scale economies.

There are 1000 companies in an industry, and there is no room for dodge in the infighting and fighting between each other. Everyone will die.

Therefore, entering the integration period for an industry is not the end, but the integration period is the ultimate test for everyone.

However, you have to think about whether you have the ability to penetrate the past. If you have the ability, you can become the initiator and integrate everyone.

If your ability is not enough, you find a way to be part of the ultimate winner, which is also a victory.

But the biggest fear is that when you are in the integration period, you will neither integrate with others nor be integrated by others, and become an isolated person.

You will become the most painful person, because you have to work hard every day, but you just don’t make money every day. This is a waste of your life. If you can’t hold on, you will be out in the end.

In fact, the harder you work, the faster you die.

Once you take the wrong path, every extra step you take is a reason to get beaten.

So, if you can't beat it, the best way is to join. "

……

(End of this chapter)