The economic crisis in the United States has caused serious losses to many companies, including Thomson Company. "The sound of nature is small" said WWW. ⒉
Thomson Company, as one of the giants in the field of consumer electronics, is the world's number one in set-top boxes, rear projection and other terminal equipment. It is also the world's top in film and television post-production, DVD disc sales channels, etc., but they are On an important project, we took the wrong path.
This project is a flat screen TV.
At the beginning, Feng Yu reminded Thomson Company that plasma TVs were not worth investing so much. In the future, flat-panel TVs will definitely have an advantage over LCDs, because the number of companies investing in this camp is hundreds of times that of plasma companies.
It's a pity that Thomson didn't pay attention to this at the beginning. Their investment in plasma research and development was very high, but the sales situation was very poor.
Although it was later announced that the focus would shift to LCD, plasma TVs did not give up. As a result, they are also pursuing two parallel paths, but they are completely different from the Four Star Group in South Korea.
Originally a highly profitable TV business, it later ended up losing hundreds of millions of euros every year.
At the beginning, Thomson could bear the losses of several hundred million euros. As a world-class electronic consumer goods giant with huge assets, a few hundred million euros is nothing.
But they also use a credit model in the sales of electrical appliances in Europe and the United States. That is, consumers can pay and then take out a mortgage to pay for the appliances.
Before, this didn't affect anything at all. The default rate is extremely low, but it can greatly increase their market share, making them number one in North America and second only to Ximenzi in Europe.
These market share data alone make their brand value extremely high, and the company's stock price performance is also very good.
But they made the same mistake as Tongyong and other companies, that is, they should not let their credit companies get involved in real estate and other financial projects.
In the past two years, when the subprime mortgage business was popular in the United States, Thomson's credit company also participated in the real estate credit business.
Although they are not directly engaged in real estate credit business, they have purchased a lot of subprime mortgage bonds, thinking that they can appreciate in value and make money. At that time, their credit company could make a lot of money every year.
But now, subprime bonds are about to become junk bonds, and default rates have risen sharply, causing Thomson, a credit company, to lose a lot of money.
Moreover, the default rate of their electrical appliance loans is also getting higher and higher. More and more bad debts appeared, causing major problems in their company's financial operations.
Even some of their joint ventures around the world began to suffer large losses due to the deterioration of the economic situation. For example, China's joint ventures, India's joint ventures, etc.
Losses are mounting and the profitability of profitable businesses is declining, making their funds tighter. Moreover, Thomson's original production costs are higher than those of other competing companies.
Doesn’t France implement a four-day work system? It is different from the four-day work system in other countries. Although other countries have a four-day work system, the working time in a day is ten hours, which means that the week is also forty hours, but this way you can save one day of commuting expenses.
Some companies have a four-day work system and eight hours of working time. Such companies have cut employees' salaries.
However, Thomson not only adopted a four-day and eight-hour work system, but also did not cut employees' salaries, which caused their productivity to drop and costs to rise.
When an economic crisis occurs, it is usually accompanied by factories going bankrupt and workers losing their jobs. Why is this? Because this expenditure is actually the largest part of the company's expenditure.
Thomson's expenditure in this area is also among the top in the world.
When product sales are declining, profits are declining, and some businesses are even experiencing large losses, they still have to pay such high salaries and benefits. How can the company not have problems
Feng Yu had already warned Thomson Company that there were great hidden dangers in their company's operations. But he and Thomson only have a cooperative relationship, and they are not too close.
If he talks too much, people will think that he wants to interfere in the management of Thomson Company.
Thomson's crisis at this time was entirely their own fault, and Feng Yu had fulfilled his obligations as an ally.
In fact, Feng Yu quite likes Thomson's brand, its sales channels are also very good, and many of its technologies are among the best in the world. But in terms of operation and management, Feng Yu is very disdainful.
Although production costs in China have been increasing, people's wages have begun to rise.
But Feng Yu gave them high salaries and asked them to improve their efficiency. Moreover, Feng Yu asked the company to open factories in India, Brazil and other places as a way to reduce labor costs.
Of course, finding some of the world's top OEMs to produce them is also one of the ways to reduce costs.
Like Thomson, the high cost is self-inflicted.
Doesn’t Thomson know that his costs are high? Of course they knew, but they never cared about it before.
They have a big brand, strong technology, high value-added products, good sales, and naturally good profits.
But when sales fell and other brands began to compete with them for the market, their disadvantages became apparent.
Thomson never thought that the United States would have an economic crisis that was so severe. And this economic crisis has had such a huge impact on Thomson.
This crisis will hit the global economy hard, and the economies of many countries may experience some decline as a result. The most intuitive manifestation is that the income of many people has dropped.
Since income has dropped, consumption power will naturally drop, and fewer people will buy their products. Their factories will cut production and profits will fall.
These associated impacts dealt a huge blow to Thomson. They are also now considering whether to sell some businesses to ensure that the company can successfully tide over this crisis.
The last step is to sell some shares of the joint venture company. After getting rid of those baggage, they should be able to survive this cold winter. As long as the economic situation recovers, they will be able to return to profitability.
They don't worry at all if they have more debt. Isn't it normal for large companies to have debt? As long as the debt ratio does not exceed the safety line, it will be fine.
As for the shares they plan to sell in joint ventures such as Huaxia, they need to find some capable people to take over, and at the same time they cannot strengthen their competitors.
Therefore, they excluded companies from Europe, island countries, and South Korea, and targeted their allies, such as Fengyu Electronics. So Thomson took the initiative to contact Liu Chuanzhi and expressed his intention to sell shares in the joint venture.
Liu Chuanzhi asked Feng Yu whether to acquire shares in this joint venture. They have measured that these businesses are not bad, and after the merger, they can increase their market share in China and even Asia.
Feng Yu refused directly. Increasing the share sounded wonderful, but it was a burden. The joint venture does not include Thomson's brand. If it does, then this offer is worth considering.
Thomson was very angry when he learned that he was rejected. They threatened that if this was the case, they would join other camps!
… (To be continued.)