72: Chapter 72: Cracks Beneath the Ice

At 8:00 PM on July 7, Su Chen was on a video call in his office.

On the other side of the screen was the Governor of Fengtian Province, a stern-faced regional official in his fifties. The background was a provincial government conference room; he had clearly just finished a meeting, his tie slightly loosened.

"Mr. Su, the province has studied your conditions," the Governor said, getting straight to the point. "Land, taxes, and supporting facilities are all negotiable. Fengtian Province can offer the most favorable policies: zero rent for land, a 'three-year tax exemption and two-year half-reduction' policy, and priority planning for supporting industrial parks."

He paused. "But the funds for employee resettlement... the province is truly in a difficult position. Last year, the province's fiscal revenue declined, and there is a gap in pension funds. According to national standards, relocating and resettling 15,000 people requires at least 3 billion. The province cannot come up with this money."

Su Chen was not surprised. "Governor, we can find a way to solve the money problem. I am more concerned about the institutional environment."

"Please, go ahead."

"First, approval efficiency," Su Chen listed. "If we take over, we will need to carry out equipment retrofitting, factory upgrades, and the introduction of new production lines. Can the approvals for these projects go through a 'green channel'? Can we avoid the back-and-forth buck-passing between various departments? In Shenzhen, an industrial project takes an average of 45 days from project initiation to commencement. In the Northeast, how long does it take?"

The Governor was silent for a few seconds. "I'll be honest, 180 days. And that's even with me personally supervising the process."

"Second, local protectionism," Su Chen continued. "Among the suppliers for Shenyang Machine Tool, there are many local enterprises whose product quality is subpar, but they have been supplying goods based on connections. If we replace these unqualified suppliers and switch to high-quality suppliers from elsewhere or even abroad, will there be resistance?"

"There will be," the Governor admitted. "Behind those enterprises are local jobs and local tax revenue. But if you can promise that the local procurement ratio for the new Shenyang Machine Tool will be no less than 30%, I can help you withstand the pressure."

"Third, personnel," Su Chen said, stating his final point. "The existing management must be completely replaced. But I know those people have ranks and tenured positions; moving them will involve many relationships. Can the province support this?"

This time, the Governor was silent for even longer. He picked up his teacup, took a sip, and said slowly, "Mr. Su, I have worked in the Northeast for thirty years. The situation here is different from the South. 'Connections,' 'favors,' and 'face'—these things seem intangible, but in reality, they are the rules."

He leaned forward. "But I can give you a promise: as long as you come, the province will establish a 'Shenyang Machine Tool Reform Leading Group,' and I will serve as the group leader. For the personnel adjustments involved, you propose the plan, and I will help you coordinate. There will definitely be resistance, but at my age, I am not afraid of offending people. I have only one request—"

The Governor looked into the camera. "Save the factory, keep those Old Master Craftsman, and polish the 'Shenyang Machine Tool' brand. This is not just an economic task; it is a political mission, and even more, it is our generation's answer to history."

The video call ended.

Half an hour later, Su Chen received an unexpected call. The caller ID showed a mobile number from Shenyang.

"Little Su, I am Old Guan from Shenyang Machine Tool, Guan Zhenshan. I've been retired for five years; I don't know if you've heard of me?" On the other end of the line was an aged but forceful voice.

Su Chen remembered. He had seen this name in the archives during his inspection: Guan Zhenshan, who served as the factory director of Shenyang Machine Tool from 1985 to 2000, and was the helmsman during the factory's most glorious period.

"Director Guan, hello."

"Don't call me Director, just call me Old Guan," the old man laughed. "I heard you're hesitating about whether to take over the factory? Director Xu came to see me and asked me to persuade you. But I won't persuade you; I'll just tell you a story."

Su Chen listened quietly.

"In 1995, I led a team to Germany for a study tour. In Stuttgart, we saw a machine tool factory called 'Schöller,' a family business that had been operating for nearly a hundred years. I asked their boss, how do you manage to thrive for a century? The boss said, it's very simple: every generation thinks about how to make the factory a little better than the previous generation."

Old Guan paused. "After I came back, I wanted to learn from that. But I discovered that here, it doesn't work. Why? Because my term was only five years, and I wanted results within my tenure. Long-term planning? That's the next person's business. Technological innovation? The risk is too high; it's better to import mature technology. Training young people? Too slow; it's better to use the ready-made Old Master Craftsman."

His voice lowered. "So you see, it's not that the people aren't capable; it's the environment that wears them down. Those Old Master Craftsman were also full of ideals and skills when they were young. But after thirty years, in an environment where 'it makes no difference whether you do a good job or a bad one,' even the sharpest blade will rust."

"Little Su," Old Guan said finally. "If you come, what you can bring is not just money and technology; more importantly, it's a 'way of life.' A way of life that respects technology, encourages innovation, and rewards diligence while punishing laziness. If you give those Old Master Craftsman a chance to prove they can still do it, they can fight for a second spring for you. I guarantee this with my thirty years of Party membership."

The call ended.

Su Chen stood by the window, motionless for a long time. "Way of life"—the word struck a chord with him.

At 10:00 PM, Xu Jianguo suddenly paid a visit.

Without an appointment and without any entourage, he came to Xinghuo Headquarters alone. When Su Chen received the call from the front desk, he still couldn't believe it.

Meeting Xu Jianguo in his office, Su Chen found that the Deputy Director looked much older than he had three days ago. His eye bags were deep, and his hair was whiter.

"Director Xu, this is..."

"I just flew in from the capital," Xu Jianguo said, taking the water Su Chen handed him and drinking half of it in one go. "Some things are not convenient to say over the phone."

He took a document out of his briefcase; the cover was stamped with the national emblem, and the title was: "National Special Plan for the Revitalization of High-End Equipment Manufacturing (Draft)."

"Regarding your three conditions, the ministries have reached a preliminary consensus," Xu Jianguo said, opening the document. "First, the debt issue. The Ministry of Finance will take the lead, in conjunction with the four major AMCs, to establish a 'Shenyang Machine Tool Debt Restructuring Special Fund' to assume 80% of the debt. The remaining 20% will be borne by Xingchen, but you can enjoy a ten-year interest-free loan."

"Second, employee resettlement. The Ministry of Human Resources and Social Security has designed three plans: those over 45 with thirty years of service can retire early, with the state covering the pension shortfall; for those aged 35-45, transfer training will be provided to connect them with local emerging enterprises; for those under 35, self-employment will be encouraged, with small loans and tax incentives provided. The state promises to divert 15,000 people, and Xingchen will receive 15,000 people."

"Third, qualifications and patents. The MIIT agrees that all military industrial qualifications, confidential processes, and national patents will be transferred to Xingchen free of charge. But there is one prerequisite: the relevant technology and products must not be used for export; national strategic security must be ensured."

The terms were better than Su Chen expected. But he knew there must be a "but."

"However," Xu Jianguo said, as expected, "the state has two additional conditions."

He flipped to the last page of the document. "First, the Shenyang Machine Tool brand must be retained. The name of the reorganized enterprise can be 'Xingchen-Shenyang Machine Tool,' but the two words 'Shenyang' must remain. This is a political requirement, related to the symbolic significance of the old industrial base in the Northeast."

"Second, within five years, the localization rate must be increased to over 90%. That is to say, key functional components—CNC systems, spindles, guide rails, and ball screws—must achieve independent controllability. This is a national strategic requirement."

Xu Jianguo closed the document and looked at Su Chen. "Mr. Su, I'll be honest. This is not a commercial transaction; this has already become a political mission. The state needs this case to succeed, needs to prove that mixed-ownership reform can work, and needs to give a shot in the arm to the revitalization of the Northeast."

He smiled bitterly. "So I came today not to negotiate, but to lay my cards on the table. The policies the state can provide are all here. But you have to bear more than half of the risk. If you succeed, you are a pioneer of reform; if you fail..."

He didn't finish, but the meaning was clear.

Su Chen was silent for a long time. There was only the slight hum of the air conditioner in the office.

"Director Xu," he finally spoke, "if I take it, I need two things."

"Please, tell me."

"First, an 'Imperial Sword' (absolute authority)," Su Chen said seriously. "Reform will inevitably touch upon interests and will inevitably face obstruction. I need explicit authorization from the national level: within the scope of Shenyang Machine Tool, I must have complete operational autonomy. No department or individual may interfere with the enterprise's normal operations for any reason."

"Second, 'room for trial and error,'" Su Chen continued. "A reorganization of this scale cannot be smooth sailing. There may be mistakes in the process, and we may have to pay tuition. I need a commitment from the state: as long as I am acting out of public interest and for the good of the enterprise, even if some decisions seem imperfect in hindsight, do not engage in 'settling scores after the fact.'"

Xu Jianguo looked deeply at Su Chen. After a long while, he stood up and reached out his hand. "Regarding these two points, I guarantee you with my personal Party spirit that I will fight for them with all my might. But Mr. Su, I also want to ask you one thing: have you really thought it through? This road may be ten times harder than you imagine right now."

Su Chen shook his hand. "I haven't thought it through yet. But I am thinking about it."

After Xu Jianguo left, Su Chen remained in the office alone.

The three documents on the table presented different shades under the light:

On the left, Lin Wan's risk report, with an eye-catching red warning sign on the cover.

On the right, Zhao Tiezhu's technical value analysis, with a hand-drawn sketch of a machine tool on the cover.

In the middle, the national plan brought by Xu Jianguo, the national emblem gleaming with a golden luster under the light.

Su Chen stood in front of the whiteboard and began to write.

Left column: Risks.

Financial risk: 12 billion in debt, huge cash flow pressure.

Personnel risk: Resettlement of 15,000 old employees, cultural conflict.

Operational risk: North-South differences, institutional inertia, reform resistance.

Strategic risk: Distraction of energy, potential to drag down Xingchen's main business.

Right column: Value.

Technical value: Military processes, experience of Old Master Craftsman, complete industrial chain.

Strategic value: Military qualifications, national endorsement, industry status.

Social value: Employment for 30,000 people, Northeast revitalization experiment, reform benchmark.

Historical value: Preserving the roots of the Huaxia machine tool industry.

Middle column: Conditions.

State support: Debt restructuring, personnel diversion, policy tilt.

Autonomous power: Personnel rights, operational rights, reform rights.

Time window: Probably only this one chance.

After writing, Su Chen stepped back a few paces and looked at these three columns of words. They were like three mountains, and he was standing in the valley, having to choose which one to climb—or, to try to cross them all.

At 1:30 AM, he called Lin Wan.

It rang five times before she answered, her voice clear, clearly not asleep either.

"If I say I want to take it," Su Chen asked directly without pleasantries, "would you resign?"

There was a long silence on the other end of the line. So long that Su Chen thought the signal had cut out.

"No," Lin Wan finally said, "but I will require the establishment of an independent 'Shenyang Project Business Unit' that is completely isolated from the risks of Xingchen's main body. I will serve as the general manager of this business unit, with all capital flows accounted for independently and all decision-making processes independent. If it really explodes, at least we can protect Xingchen's main body from a fatal impact."

Su Chen felt a lump in his throat. "Thank you."

"Don't thank me," Lin Wan said, her voice calm. "I am the CEO of Xingchen; this is my duty. And..."

She paused. "And although I oppose it, I understand why you are hesitating. Those Old Master Craftsman... I saw Master Liu's hands, full of calluses and scars. Those are hands that have worked for a lifetime. To let such hands eventually grow old in disappointment is indeed... a pity."

After chatting a few more sentences, he hung up the phone.

Su Chen walked to the window. Shenzhen in the dead of night was still brightly lit. In the genes of this city were written efficiency, innovation, and the courage to be the first.

And what he had to consider now was another city, another kind of gene.

He circled tomorrow's date on the calendar: July 8th. Next to it, he wrote:

Second management meeting. Decision day.

Finally, he wrote a line in his notebook, the handwriting very heavy:

"Saving an enterprise is easy; saving a spirit is difficult."

"But some things are worth doing precisely because they are difficult."

Outside the window, deep in the night sky, a meteor streaked across.

The dark night was about to pass, and dawn was about to arrive.

And the moment of decision had finally arrived.