Chapter 206 Confrontation
Sunday, a sunny winter day.

Zhang Yunqi met Huo Jianzhong again.

Still so intimate, still so refreshing.

Of course, the current street disturbances by the employees of the Longjingyuan Cannery have attracted the attention of the municipal party committee and government. Mayor Yang Jiarong has personally stepped in to inquire about the matter and asked Chengnan District Mayor Huo Jianzhong to come up with a feasible acquisition plan for the Longjingyuan Cannery within three days to fundamentally resolve the cannery's ownership issues, debt issues, and the resettlement of more than 200 employees.

Huo Jianzhong is under a lot of pressure.

He felt a little regretful, but he was more resentful towards Zhang Yunqi. This kid didn't follow the rules.

When the two sides were in the reception room conducting preliminary negotiations, they exchanged a few simple pleasantries, and he could not help but say, "Mr. Zhang, it's really not easy to meet you."

Zhang Yunqi heard something behind Huo Jianzhong's words. The employees of the Longjingyuan Canning Factory had been making trouble for a long time, but the contracting and management plan discussed earlier had been hanging in the air and had not made any progress. He had not shown up, and Wang Guibing accompanied Xue Jianzhong in talking about this and that, but no decision could be made.

It is normal for Huo Jianzhong to have thoughts on this.

Zhang Yunqi smiled and said, "I can't help it. I've been busy recently. The final exam is coming up soon. Study is important."

This act left Huo Jianzhong speechless.

After a long while, the district chief said with a fake smile: "Speaking of which, my son also studies in the No. 1 Middle School in the city. His grades are not bad, but compared with you, he is really not up to par."

"Director Huo, you're too kind." Zhang Yunqi smiled, thinking that Huo Jianzhong thought too highly of his son. His son's name was Huo Xiaoguang, and he was very famous in the No. 1 Middle School in the city. He was a bad boy.

Huo Jianzhong said again: "Boss Zhang, by the way, we were talking about contract management before, why did you suddenly change your mind and want to acquire the Longjingyuan Canning Factory?"

Zhang Yunqi said, "This is mainly to help the district and District Chief Huo share some of the worries. Contracting cannot solve the cannery's property rights issue, and there is no fixed profit guarantee. It will also dig into the local fiscal revenue of Chengnan District for nothing, which is risky. If we directly purchase it, we can reduce the district's financial burden, and the cannery can also change its operating mechanism, truly go to the market, and achieve independent operation and self-financing."

There is no doubt that whether Zhang Yunqi is contracting or directly acquiring the cannery, he is doing it to make money, but Huo Jianzhong feels that what this guy said is insightful and in line with the current national policy direction.

Since 1979, the reform of state-owned enterprises has gone through the first stage of management rights reform and the second stage of ownership level reform. In the ownership level reform, an important idea is to limit the property rights system of state-owned enterprise reform within the original property relations and further promote the reform at the management rights level. The institutional choice corresponding to this understanding is the enterprise contracting system proposed by Zhang Yunqi earlier.

In fact, there are quite a few such enterprises in Chengnan District. At the beginning of the implementation of the contract system, it did mobilize the enthusiasm of enterprises and employees in the district, promoted the economic development of the district, and the loss area decreased year by year. However, during the implementation of the contract system, there was a situation in which enterprises increased efficiency, the economy grew, and local revenue decreased.

Huo Jianzhong often reads newspapers and he has discovered that in the past two years, all sectors of society across the country have been strongly criticizing and opposing the contract management system. A common criticism is that after decentralization and profit sharing, the state finances are no longer able to continue making concessions, while the contract management system has necessitated even greater concessions to enterprises, resulting in a serious loss of state fiscal revenue.

Of course, Huo Jianzhong personally feels that the biggest drawback of the contracting system is that it is a weak constraint on corporate behavior. Enterprises are only responsible for profits, not losses! This has led to short-term and "opportunistic" behavior of corporate contractors.

Therefore, in the current reform of state-owned enterprises, the general direction of the country is to promote the reform of establishing a modern enterprise system. In the "Decision on Several Issues Concerning the Establishment of a Socialist Market Economic System" passed at the Third Plenary Session of the 14th Central Committee this year, it was clearly proposed to transform the property rights structure so that state-owned enterprises can become modern enterprises with "clear property rights, clear rights and responsibilities, separation of government and enterprises, and scientific management."

In the end, starting from the property rights is the general trend of the current state-owned enterprise reform. Huo Jianzhong is very clear about this. However, whether Longjingyuan Cannery adopts the contract management system or carries out property rights reform, he thinks that the reason why it is feasible is decided by the capital. In the case of Longjingyuan Cannery, if no one invests, any reform system is empty talk, but more than 200 mouths are actually waiting for help!

This is also the reason why Huo Jianzhong felt that Zhang Yunqi was not doing things in a fair way, but he could not do anything about him at the moment, especially after the riot caused by the employees of the Longjingyuan Cannery yesterday. It became his concern to appease the cannery employees and get them out of trouble as soon as possible, so he formulated two acquisition plans overnight.

Huo Jianzhong handed a document to Zhang Yunqi and said, "Regarding your company's acquisition of the Longjingyuan Canning Factory, the district also discussed it overnight based on the actual situation and initially decided on two plans."

"Director Huo, please speak." Zhang Yunqi took the information and began to read it.

Huo Jianzhong said, "Let me give you a rough idea. The first plan is to sell all the assets to your company, and the district government will use the land as equity. The second plan is that your company will buy out all the state-owned assets of the cannery, and the district government will no longer hold a controlling stake. The land will be used for a fee, and a land use fee will be paid. Mr. Zhang, what do you think of these two plans?"

Zhang Yunqi was happy to hear this.

How could he not have an idea? He closed the document and said, "Since we are talking about the specific acquisition plan, I will say it directly. District Chief Huo, I have also investigated the situation of Longjingyuan Canning Factory. First of all, the production equipment of Longjingyuan Canning Factory is quite backward. It only has one canning line from the 70s. Not only is the production speed slow, but it also greatly increases the labor cost, resulting in a small broken factory actually needing 200 workers."

Zhang Yunqi looked at Huo Jianzhong's face and continued, "Secondly, as far as I know, the total value of the Longjingyuan Cannery's land, factory buildings, machines, trademarks, inventory, and other assets is 1100 million, but it also owes a huge amount of foreign debt, more than 500 million to banks and more than 300 million to suppliers. Currently, the Longjingyuan Cannery has been shut down for 7 months and has stopped paying salaries for 11 months. With the salaries of more than employees, it is already insolvent and close to bankruptcy, or has actually gone bankrupt."

What Zhang Yunqi said is all true.

If that weren’t the case, the city government wouldn’t have asked him to take over.

Of course, no one else will take over except him at the moment.

Because the acquisition of Longjingyuan Cannery means taking on nearly 10 million yuan in debt, if production needs to be resumed and employees need to be resettled, the cost will definitely far exceed the value of the equipment and factory buildings themselves. Although the dozens of acres of land of the cannery are located in the city center, adjacent to Yuxian Street and not far from Xiangnan College, the future commercial development value is immeasurable, but in this era, there should be very few people in Jiangchuan City who have such foresight. According to the usual logic of ordinary people, spending such a large price to acquire a state-owned enterprise on the verge of bankruptcy and serving a group of inefficient state-owned enterprise employees is definitely not as good as reopening the factory.

However, now, the two acquisition plans given by Huo Jianzhong have all taken out the value of the land, greatly reducing the acquisition value of the cannery. In Zhang Yunqi's eyes, if there is no land, the value of the cannery is minus 10 million. He doesn't know if Huo Jianzhong deliberately took advantage of him because he didn't give him any benefits during the last contract management discussion.

But after thinking about it, I felt that it was unlikely.

Huo Jianzhong's political sense is not that low, and his vision cannot be that narrow. After the riot caused by the employees of Longjingyuan Cannery yesterday, he should be aware that his situation is not good. Mayor Yang Jiarong will definitely question his ability to do things. In this case, his most urgent task is to cooperate with him to take over Longjingyuan Cannery as soon as possible and resettle employee No. 200.

Thinking about it this way, Huo Jianzhong was reluctant to include the land in the overall acquisition plan, probably because he did not dare to take too big a step in the forbidden zone of property rights reform. The reform of the state-owned enterprise property rights system had just begun in 93. Selling state-owned assets itself would easily make people question privatization and arouse opposition and accusations from all sectors of society. People would often label him as "the son who sells his father's land without feeling sorry", "the prodigal son", "the eternal sinner", "the captain of the privatization commando"... Each of these labels could crush a person to death!

It is normal that Huo Jianzhong does not dare to be "Huo Meiguang".

What can Zhang Yunqi say? It is true that the reform of the state-owned enterprise property rights system has caused a huge loss of state-owned capital and nurtured a large number of vampires who have drilled into the heart of the country to extract huge wealth, but the great achievements of this mighty reform movement cannot be erased. It failed to prevent large state-owned enterprises from monopolizing capital, but at least it allowed a large number of small and medium-sized enterprises to complete the reform of the investment system and feed tens of thousands of ordinary workers like the more than 200 workers at the Longjingyuan Canning Factory who could not afford to eat.

Everyone has a scale of right and wrong in their hearts. Zhang Yunqi is not a white lotus. The tide of reform is rolling forward. No one can stop it. Just ask yourself if you have a clear conscience. He continued: "District Chief Huo, with the Longjingyuan Cannery close to bankruptcy, if we acquire it, not only will we have to bear nearly 10 million in debt, but the company will also have to invest huge amounts of money to settle employees and resume production. So if the land is not included in the acquisition plan, we will even have to pay a usage fee. Do you think this cannery is worth 10 million? This is unreasonable and I'm afraid we can't afford it."

Huo Jianzhong also knew that Zhang Yunqi was telling the truth. He coughed twice and said, "Mr. Zhang, this is just a preliminary negotiation. You can propose your acquisition plan."

Zhang Yunqi said: "My plan is relatively simple. I will acquire all the assets of the Longjingyuan Canning Factory, including the land."

Huo Jianzhong asked: "How much are you willing to contribute?"

Zhang Yunqi said: "This is not available."

Huo Jianzhong thought he had heard it wrong: "What?"

Zhang Yunqi repeated: "I will buy all the assets of Longjingyuan Canning Factory for 0 yuan."

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(End of this chapter)