Becoming Rich with Daily Scavenging APP-Chapter 699: Collapse of the Industrial System

In the years when Germany raised the banner of environmental protection high.

Outsiders only knew that the operational costs of German enterprises began to increase significantly. But those not inside the enterprise were unaware of exactly how much they had increased.

This time, when the financial reports of Germany's major enterprises were released, almost half of Germany's business community was shocked.

BMW's net profit decreased by 29 percent, Volkswagen by 33 percent, Audi by 37.5 percent, Mercedes-Benz by 55.8 percent, the world's third-largest auto parts supplier ZF switched to a net loss, profits fell by 42 percent, and the giant parts supplier Bosch's profit dropped by 30 percent, the global chemical giant BASF's net profit decreased by about 50 percent.

In other words, the six giant enterprises in Germany, the entire nation's business has come to a halt, profits have all plummeted, and they have all begun planning major layoffs.

The high-quality assets the entire nation depends on for survival are rapidly collapsing, forcing measures for self-rescue, preparing to transfer industries out of Germany.

To give an example, the situation of Germany's business community, when placed in Huaxia, would be equivalent to Tengxu, Biya Mansion, Hua Wei, Ah Li, Heartbeat, Rice, all these famous enterprises having their financial report profits halved.

On the Internet, the impact caused would be akin to a cyber apocalypse.

And now, the crisis Germany is facing is this severe.

From automobile manufacturing to Chinese labor production, from electronic industry to mechanical manufacturing, the entire industrial chain is collapsing from top to bottom in a domino-like manner.

In the past six years, the employment population in Germany's automotive industry has dropped from 830 thousand to 760 thousand.

And professionals estimate that, six years later, the employment population in the automotive industry will fall by another 300 thousand.

And for such heavy asset industries, if they can't maintain scale, the production costs of the remaining factories will continue to rise, ultimately leading the entire automotive industrial system to collapse.

For instance, before the automotive industry, the collapse phenomenon had already started appearing in Germany's steel industry.

Germany's steel giant, famous for producing the Krupp cannon, facing this situation, directly laid off over 40 percent of its employees, reducing total employees from 27 thousand to 11 thousand.

But even this arm-cutting level layoff hasn't made the company profitable, still incurring a loss of 50 million Euro.

The tragic condition of the steel industry is clear.

So the automotive industry and other industrial companies are anxious, hoping to quickly deploy industries in other major markets to avoid immediate bankruptcy after a domestic collapse.

After listening to Schaefer's briefing, Chen Yiyang could only say one word, "Deserved."

"Truly deserved." Schaefer also shook his head helplessly, "The most advanced power plant explodes just like that, now energy prices are skyrocketing, market competition intensifies, our proudest industrial system in Germany can't be sustained anymore."

"But you coming to Huaxia seeking relevant partners to invest and build factories, I can't help you with that."

Chen Yiyang said, "Unless you are willing to attract investment to build factories in Lin'an City, where my headquarters is located."

"That seems unlikely." Schaefer candidly said, "This time I came primarily to find partners for some heavy industry projects, these project factories generally won't be selected in first or second-tier cities."

Heavy industry projects require a large amount of land, and once operational, they impose pressure on the surrounding environment.

So usually the factory sites will be chosen in traffic-convenient, but not very developed third or fourth-tier cities.

Lin'an does not meet Schaefer's inspection requirements.

Chen Yiyang invited Schaefer to stay in the Imperial Capital for a few days, letting Schaefer enjoy and relax first.

During this relaxation, Schaefer unexpectedly met a new friend at a bar frequented by foreigners in the Imperial Capital, and brought him to introduce to Chen Yiyang.

"This is Lawrence from New Zealand." Schaefer introduced Chen Yiyang to this white male from New Zealand, about his forties.

Chen Yiyang knew Schaefer had a keen eye, anyone he introduced wouldn't be a scammer.

Thus, Chen Yiyang invited Lawrence for a meal, then it was evening.

After confirming Chen Yiyang's identity and influence in Huaxia, Lawrence indicated he might have a business proposition that could involve collaboration with Chen Yiyang.

"What kind of business?" Chen Yiyang asked.

"Here's the situation." Lawrence stated, "We in New Zealand had a government project initially collaborating with a South Korean shipyard.

We ordered two ships and related supporting projects from the South Korean shipyard, totalling eight billion New Zealand dollars."

The New Zealand currency to RMB is generally one to four, this eight billion NZD, when converted amounts to approximately thirty-two billion RMB, a notably large-scale project.

"Among these eight billion NZD, the price of the two ships is fixed, which is 5.5 billion NZD, the cost for supporting facilities is 2.5 billion NZD.

This deal was negotiated four years ago, but now, the South Korean side says due to various reasons, the manufacturing costs for supporting facilities need to be drastically increased."

"How much extra do they want?" Chen Yiyang inquired.

"Now the quote there is 20 billion NZD." Lawrence replied.

"Pfft." Chen Yiyang almost spat the wine in his mouth.

For this kind of large project, demanding additional budget post-commencement is quite normal.

After all, at project acquisition, the subcontractor is in a weaker position, naturally getting pressed to lower the price as much as possible.

But when the contract is signed, all other competitors are gone, the subcontractor naturally wants to corner the main contractor, asking for a bit more budget, carving out some profit space.

Otherwise they'd truly be doing it for nothing.

But for it to jump from 2.5 billion straight to 20 billion, that was beyond what Chen Yiyang could hold back.

This felt like extortion.

Two ships are only 5.5 billion, yet now the price for supporting facilities alone equals that for eight ships.

"So now, New Zealand plans to find a new partner for this project?" Chen Yiyang asked.

"Correct." Lawrence nodded, "Initially I was directly looking for your side's shipyards to negotiate. But worried about the situation of budget escalation after contract signing, I'd prefer to find some influential local partner in Huaxia to act as a middleman. This way if issues arise, we can avoid both sides getting into disputes."

Brokers and middlemen, in many cases aside from bringing business to both parties, aiding negotiations, also undertake some guarantor roles.

For example, in situations like this.

Without a middleman, if any contractual issues arise between the two sides and negotiations fail, the only recourse is to sue or settle breaches to terminate the contract.

But with a middleman, the middleman can act as a lubricant in between or directly help A and B to negotiate, using their own connections and influence to constrain B, preventing B from cornering A.