darknovel Chapter 177 Poaching by Competitors, Equity Incentives
Chapter 177 Poaching by Competitors, Equity Incentives
In the winter of 1983, in Zhangcheng, a cold wind carried the dampness of the riverbank through the streets and alleys, but the corrugated iron workshop of Chenqing Hardware Manufacturing Joint Venture was warm and cozy. Liu Guangtian, who had just completed the preliminary design of the fully automated forging production line, was hunched over his drafting table marking the dimensions of parts when suddenly a series of hurried footsteps came from outside the workshop, followed by the tearful cry of technician Xiao Zhou: "Director Liu! Master Wang and Master Li are leaving!"
Liu Guangtian suddenly looked up, his pencil leaving a crooked mark on the drawing. He rushed out of the office and saw two middle-aged technicians in old work clothes tying bedding rolls onto bicycles at the entrance of the forging workshop. They were none other than Master Wang and Master Li, the most experienced workers in the workshop. Their faces were full of guilt, and they dared not look directly at their coworkers who had gathered around them.
"Master Wang, what's going on?" Liu Guangtian grabbed Master Wang's arm, his gaze sweeping over the brand-new thermos flasks hanging on the handlebars of their bicycles. They were the famous "Seagull" brand from Zhangcheng, the kind that ordinary workers would have to save up for half a month to buy. His heart skipped a beat, and he instantly understood seven or eight parts of the story.
Master Wang sighed and pulled a folded piece of paper from his pocket: "Guangtian, I'm sorry. Boss Zhao from Xinyuan Hardware next door talked to us. He offered us twenty yuan more per month than here, plus three meals a day. My wife takes medication year-round, and my child is taking the college entrance exam next year. I really can't refuse this offer."
The note was an offer letter from Xinyuan Hardware, stamped with a bright red official seal. The monthly salary section clearly stated "80 yuan," significantly higher than the top salary offered by Chenqing Hardware. The onlookers gasped. In Zhangcheng, the average worker's monthly salary was mostly around 40 yuan; this offer was indeed tempting.
"Zhao Defa is openly poaching our talent!" Xiao Zhou exclaimed, his face flushed with anger. "He was fixated on our technology at the last trade fair, and now he's trying to steal our staff!" Just then, Xiao Li from the machine repair workshop rushed over, panting, and said, "Director Liu, people from Xinyuan even went to the warehouse to talk to Master Zhang, saying they wanted to make him a team leader!"
Liu Guangtian's expression was grave. Master Wang and Master Li were the core technicians in the workshop; they had participated in the research and development of the waste heat recovery device and the quick mold change equipment, and were intimately familiar with the factory's technical parameters. Their departure would not only halt the ongoing development of the fully automated production line, but could also affect the production schedule of export orders. He made a decisive decision: "Xiao Zhou, you keep the other workers calm. I'm going to find Director Lin now."
In the factory manager's office, Lin Chen and Su Qing were checking the newly arrived export orders. Seeing Liu Guangtian rush in, they both put down their ledgers. After hearing the whole story, Su Qing's brows furrowed: "I remember Zhao Defa from Xinyuan Hardware. He deliberately dumped his goods at low prices near our booth at the last agricultural supplies fair. I didn't expect him to resort to such underhanded tactics this time."
Lin Chen didn't speak immediately, but instead picked up the Xinyuan Hardware brochure on the table. This factory had only been established six months ago. The boss, Zhao Defa, used to be a purchasing agent at the commune's agricultural machinery station, making his fortune by reselling agricultural machinery parts. After establishing the factory, he had been surviving by imitating other manufacturers' products. "He's paying Master Wang a monthly salary of 80 yuan. With Xinyuan's production capacity, it won't last three months at all. He's trying to poach our technical backbone first, steal their technology, and then lay them off." Lin Chen's fingers tapped lightly on the brochure, his eyes sharp as an eagle.
"But Master Wang and the others don't know!" Liu Guangtian stamped his feet anxiously. "The workshop is in a state of panic right now. Several young technicians are talking about it in private. If we don't speak up, some of them might leave."
Su Qing flipped through the payroll sheet, her fingertips tracing the lines of numbers: "Our current wages aren't low in the industry; key technical staff can get 60 yuan, which is higher than in state-owned factories. But Zhao Defa's offer is indeed tempting. Simply raising wages would increase costs and wouldn't address the root cause. What if he raises the price again?"
Lin Chen stood up and walked to the window, gazing towards the workshop. The furnaces inside were burning brightly, and through the window, he could see the workers busily at work. He recalled the early days of his business, when eight old colleagues ate pickled vegetables and cornbread with him, transforming an abandoned factory into a production line; he remembered Liu Guangtian leading his team through the night to modify the forging furnace, his face covered in oil but his eyes shining. These people weren't simply after wages; what they needed more was a sense of belonging and hope for the future.
"Simply raising wages is a passive defense; we need to take the initiative." Lin Chen turned around, his eyes resolute. "Su Qing, calculate how much net profit we'll have this year. How feasible is it to allocate a portion as shares to core technical personnel and long-term employees?"
Su Qing's eyes lit up, and she immediately picked up a calculator: "As of November this year, the net profit has already reached 32,000 yuan. After deducting the R&D and expansion funds for next year, we can allocate 8000 yuan as the first batch of shares. Based on the current production capacity, each share is valued at 100 yuan, which can yield 80 shares. Core staff can each subscribe to 5-10 shares, and long-term employees can subscribe to 1-3 shares, with annual dividends distributed according to the shareholding ratio."
"That's not enough." Lin Chen shook his head. "To truly make everyone feel like the factory is their own home, the shareholding ratio needs to be adjusted further. The shareholding ratio of core technical personnel can be increased to 1%-5%, and they should promise to transfer it according to the net asset appreciation ratio after three years. In addition, a special fund for technological innovation should be established, and 10% of the project profits should be used as a reward after successful research and development."
Liu Guangtian was thrilled: "Brother Lin, this is a brilliant idea! This way, everyone will no longer be just employees, but owners of the factory. Just like when I was in the steel rolling mill, no matter how well you did, you only got a fixed salary. Who would genuinely think about technological innovation?"
That afternoon, Chenqing Hardware held a general meeting for all employees. When Lin Chen announced the "equity incentive plan," the factory fell silent instantly, followed by thunderous applause. Standing on the makeshift stage, Lin Chen's voice boomed: "Fellow workers, I understand that Xinyuan Hardware is offering high salaries. But I want to tell you that Chenqing Hardware can offer you more than just your current wages; it also provides you with future security!"
He took out the equity distribution plan he had prepared beforehand and explained it to everyone: "Technical backbone employees who have worked for five years can subscribe to up to 5% of the shares, which is equivalent to receiving 5% of the factory's net profit as dividends every year. This year our net profit is 3.2 yuan, so 5% is 1600 yuan, which is higher than Zhao Defa's annual salary! Moreover, as the factory develops, the net profit will only increase, and the shares will become more and more valuable."
Below the stage, Master Wang and Master Li exchanged glances, their bedding rolls growing heavier. Master Wang stood up, his voice hoarse, "Director Lin, if we stay now, can we still enjoy this policy?"
Lin Chen smiled and nodded: "Master Wang, Master Li, as long as everyone is willing to stay, past grievances will be forgiven. You are veterans of the factory, and according to regulations, each of you can purchase 5% of the shares. Moreover, I promise that you will lead the establishment of a core technology team to be responsible for the research and development of the fully automated production line. After the project is successful, you will receive an additional 10% of the project's profits!"
Master Wang's eyes reddened as he unloaded his bedding from his bicycle: "Director Lin, we were wrong! Boss Zhao of Xinyuan only promised high salaries, but he didn't mention shares. We feel at ease working for you!" Master Li quickly chimed in: "Yes, we've watched the factory grow from a small, dilapidated building to what it is now, we've developed a strong attachment to it."
After the conference, the atmosphere in the workshop completely changed. Young technicians who used to need constant prompting now actively sought out Master Wang for technical advice; warehouse manager Master Zhang worked through the night to compile a material consumption list and offered more than ten cost-saving suggestions. Liu Guangtian's technical innovation team instantly expanded to ten people, and everyone voluntarily worked overtime. The fully automated production line design, originally expected to take three months to complete, was finished in less than a month.
However, the matter didn't end so easily. Three days later, at dawn, Lin Chen arrived at the factory to find a crowd gathered at the entrance. Zhao Defa, the owner of Xinyuan Hardware, along with two burly men, were causing trouble, holding signs that read "Chenqing Hardware Owes Wages." Upon seeing Lin Chen, Zhao Defa immediately rushed over, shouting, "Lin Chen, you lured my factory workers to quit and are now withholding their wages! You must give us an explanation today!"
Lin Chen recognized the two men beside Zhao Defa as the Xinyuan employees who had secretly come to the factory to poach workers a couple of days ago. Without showing any emotion, he instructed the security guards to evacuate the workers to the workshop, then said to Zhao Defa, "Boss Zhao, you can't just say whatever you want. My workers are all working normally in the workshop. Do you have any evidence that I owe you wages?"
"Evidence?" Zhao Defa pulled out several photos from his pocket. "This is the evidence! Look, Master Wang and Master Li had agreed to come to my place, but you tricked them back with fake shares! You're breaking market rules!" The photos showed Master Wang and Master Li packing their bedding, clearly taken secretly.
Lin Chen took the photo and sneered, "Boss Zhao, it's their freedom to choose where they work. Besides, my stock incentive plan is already registered with the business administration department and has a formal equity agreement. How can you say it's fake? But you, you're poaching people with salaries above your means and then fabricating evidence to cause trouble. Do you believe I'll call the police?"
Zhao Defa's expression changed; he hadn't expected Lin Chen to be so resolute. Just then, Su Qing walked over with several workers holding equity agreements. Master Wang, holding up the agreement, loudly proclaimed, "Boss Zhao, we're staying with Chen Qing voluntarily! This equity agreement is legal and valid; it has our signatures and fingerprints on it! You promised us high salaries, but you wouldn't even sign a labor contract. Who knows if you're lying to us?"
The onlookers pointed and whispered, and Zhao Defa's face turned a deep purplish-red. Knowing that further commotion would only make him look foolish, he threatened, "Lin Chen, you just wait!" and slunk away with his men. Watching their retreating figures, Su Qing said worriedly, "Zhao Defa definitely won't let this go. We need to be careful he doesn't cause trouble."
Lin Chen nodded; he had anticipated Zhao De's move. That afternoon, he arranged for security guards to increase patrols in the factory area and installed surveillance equipment in the workshops and warehouses. Sure enough, two nights later, the surveillance footage captured Zhao De leading a group of men to sneak into the factory area, attempting to sabotage the prototype of the fully automated production line that was being tested.
This time, Lin Chen gave Zhao Defa no chance and immediately called the police. When the police arrived, Zhao Defa and his accomplices were dismantling core components of the production line, and were caught red-handed. Further investigation revealed serious quality problems with the parts produced by Xinyuan Hardware, resulting in many farmers experiencing broken farm tools after purchasing them. Ultimately, Zhao Defa was sentenced to one year in prison for disrupting production and selling counterfeit products, and Xinyuan Hardware was shut down according to law.
After the storm passed, Chenqing Hardware's reputation actually grew stronger. Many technical backbones from state-owned factories took the initiative to apply for jobs, and even a precision manufacturing expert from Shanghai traveled a long distance to Zhangcheng to join the team after seeing Chenqing's equity incentive plan.
On the eve of the Spring Festival in 1984, the fully automated production line was officially put into operation, and Chenqing Hardware's production capacity increased by two times. The original monthly export orders of 3000 sets could be easily completed, and new markets in Southeast Asia were also opened up.
At the pre-New Year's Eve employee gathering, the factory was brightly decorated, and the tables were laden with chicken, duck, fish, and meat. Lin Chen raised his glass and addressed his fellow workers, "Brothers, our achievements this year are all thanks to your hard work. I promise that next year we will expand our factory again, so that everyone can live in the factory-provided dormitories, and our children can attend the best schools!"
"Bravo!" The workers raised their glasses, their applause and cheers drowning out the firecrackers outside the window. Master Wang, holding his glass, walked up to Lin Chen and said excitedly, "Director Lin, I've lived fifty years and never felt so hopeful. Next year, when my son gets into university, I'll have him study mechanical engineering so he can work at our factory someday!"
Brothers Liu Guangtian and Liu Guangfu also came over. Liu Guangfu was holding a brand-new ledger: "Brother Lin, Sister Su, this is this year's cost accounting sheet. Our scrap rate has dropped below 1%, fuel costs are 20% lower than last year, and net profit has exceeded 8 yuan! According to the equity agreement, this year's dividends will be quite substantial!"
Su Qing added with a smile, "I've already negotiated with the bank. We'll take out a loan to build employee dormitories next spring, and we can also apply for tax breaks. In addition, Mr. Chen, a foreign trade businessman from Guangzhou, just called to say that he wants to increase his orders to 1 sets per month next year and also introduce European clients to us!"
Looking at the scene before him, Lin Chen was filled with emotion. He recalled the winter solstice morning of the year he was reborn, shivering in the side room of the courtyard house with only half a bag of stale rice in his hand; he remembered being harassed by Liu Haizhong when he first arrived at the steel rolling mill, searching for alloy scraps in the waste pile; he remembered the days in the early days of starting his business, working late into the night with Su Qing in the dilapidated factory building, drawing blueprints. Those difficult times had now become his most precious memories.
Fireworks burst across the night sky outside the window, illuminating the smiles on everyone's faces. Lin Chen knew that the equity incentive plan had not only stabilized the team but also united its members. In this wave of reform and opening up, Chenqing Hardware was like a sturdy ship, and everyone on board was a captain. With their hands and wisdom, they not only changed their own destinies but also wrote a legend belonging to Chenqing Hardware on the canvas of the times.
After the dinner, Lin Chen stayed alone in his office, looking at the factory development plan on the wall. The plan outlined the goals for the next five years: to build a research and development center, expand into international markets, and create the leading precision manufacturing brand in China. He picked up a pen and wrote in the corner of the drawing: "Technology is the foundation, integrity is the cornerstone; many hands make light work."
Night deepened, and the fires in the factory gradually died down, but the future of Chenqing Hardware shone as brightly as the starry sky outside the window. Lin Chen knew that new challenges lay ahead, but as long as these like-minded partners stood together, no difficulty was insurmountable. The past grudges and entanglements, the backstabbing and intrigue in the courtyard, had long since transformed into a driving force propelling him forward—only by treating others with sincerity and upholding his original aspirations could he navigate the tides of time steadily and achieve long-term success.