Chapter 522: Foundation: Wanshang's Downward Growth

September 1, 2011, 38th floor of the Wanxiang Dasha in Shenzhen.

The long table in the conference room was filled with people.

Chen Feng, Zhao Ming, Zhou Ye, Wang Bo, He Xiao, Liu Yang, Zhang Lei, Lin Jiawen, Fang Wenshan, Zhang Yuan… all heads of core departments were present.

Li Yaozong sat in the main seat, with a data report in front of him.

He opened to the first page.

"In the first half of the year, Wanxiang Group's total revenue was 140 billion, a year‑on‑year increase of 32%."

A slight stir arose in the conference room.

He continued to read.

"Fenghuang Phone sales reached 43 million units, the domestic market share ranked first. Fenghuang Smart Cars sold 180,000 units, a year‑on‑year increase of 147%. Fenghuang Chat had 350 million daily active users, and Fenghuang Broadcast had been online for two months, with registered users surpassing 100 million."

He closed the report.

"These are the results."

He looked at the people seated.

"But today's meeting is not for hearing these."

He stood up and walked to the window.

"Ten years ago, Nokia was at its peak. In the global mobile phone market, four out of ten people used Nokia. Five years ago, the iPhone was released, and everyone said it was a toy that could never replace feature phones."

He turned around.

"Now? Nokia's market value has dropped by 90%, and the feature‑phone market has shrunk by half."

He looked at the people present.

"Where are those who mocked smartphones back then now?"

The conference room fell silent.

Li Yaozong walked back to his seat.

"I called everyone here today to ask a question."

He looked around the room.

"Wanshang, where will it go? How can we ensure Wanshang's market competitiveness?"

Silence.

Chen Feng spoke first.

"General Manager Li, the semiconductor path still requires ten more years. Moore's Law still holds; performance doubles each year, power consumption halves each year. If we can't keep up, we'll be eliminated."

Zhao Ming continued.

"The system is the same. Pangu can run now, but compared with world‑class standards, there's still a gap. Ecosystem, developers, and number of applications all need to be caught up."

Zhou Ye thought for a moment.

"In the video sector, changes are even faster. H. 265 hasn't been widely adopted yet, H. 266 is already on the way. Our Fenghuang Broadcast just launched, and the technology must be ready to iterate."

He Xiao said in a low voice.

"On the automotive side, we can't afford to stop. Mercedes, BMW, Tesla are all burning money on autonomous driving. We run fast, but others run even faster."

Wang Bo raised his hand.

"General Manager Li, I think the scariest thing is not falling behind in technology."

Everyone looked at him.

"It's the users who have left," Wang Bo said, "Nokia's technology wasn't lacking back then, why was it eliminated? Because users thought it was outdated. Users want something new, they want something cool."

He paused.

"Just because we performed well today doesn't mean users will still like us tomorrow. We must keep changing, keep being new."

Li Yaozong listened and nodded.

"Everyone is right. Wanshang not only needs continuous innovation, but also needs to understand the needs of lower‑level workers."

He stood up.

"That's all for today's meeting. After we adjourn, I want to go downstairs for a look."

Fang Wenshan was momentarily stunned.

"Downstairs?"

"Workshop, dormitory, cafeteria," Li Yaozong said, "Just take a casual walk."

At two p. m., Li Yaozong appeared in Longgang Gongye Yuan.

There was no prior notice, no clearing of the area, and no accompanying reporters.

It was just him and He Xiao, wearing ordinary work clothes, blending among the shift‑changing workers.

The first stop was the garment factory.

In the workshop, hundreds of sewing machines ran simultaneously, the buzzing sounding like a swarm of bees holding a meeting. The workers kept their heads down, the fabric in their hands fluttered, their movements so fast they dazzled the eye.

Li Yaozong stood behind a workstation and watched for a while.

The worker was a woman in her thirties, her work both fast and precise. After finishing a garment, she looked up at Li Yaozong and was momentarily stunned.

"Are you…"

Li Yaozong waved his hand.

"Just looking around. Keep busy with your work."

The woman nodded and continued working.

A middle‑aged man nearby leaned over and gave Li Yaozong a few looks.

"You are a leader from up above, aren't you?"

Li Yaozong smiled.

I guess so.

The man nodded.

Welcome, leader, for the inspection!

Li Yaozong looked at him.

I just want to see how the frontline workers are doing and what they need.

Then I'll share a bit of my suggestion.

The man pointed at that woman.

She earned eight thousand yuan last month. Piecework—more labor, more pay.

He pointed at himself again.

I got nine thousand two hundred. Sixteen years on the job, quick hands.

Li Yaozong listened.

But, the man lowered his voice, last month the Workshop Director called us to a meeting, saying someone complained our wages are too high and they might cut them!

Li Yaozong's brows twitched.

Who complained?

The man shook his head.

Don't know. But we get the point—we take more, costs rise, the product gets expensive, and it's harder to sell.

He paused.

Leader, I want to tell you the truth.

Li Yaozong looked at him.

Speak.

Our wages come from overtime and extra shifts. When others rest, we work; when others are on holiday, we work. If anyone is jealous, they can do the work themselves.

The woman beside them lifted her head.

Exactly. We're earning hard‑earned money, not stealing or robbing.

Li Yaozong was silent for a few seconds.

Then he asked.

What do you want the company to do?

The man thought for a moment.

We hope the leader doesn't constantly focus on our wages. Pay what's due, don't always think about cutting.

Coming out of the clothing factory, He Xiao whispered beside them.

Director Li, that Workshop Director…

Li Yaozong waved his hand.

Don't blame him. He's just following the higher‑ups' orders.

He paused.

First go to the next inspection, we'll discuss when we get back.

The two continued walking forward.

Next stop, the assembly line of the electronics factory.

The Workshop was even livelier.

The several‑hundred‑meter‑long line had workers seated on both sides, holding soldering irons, screwdrivers, testing devices, moving as fast as machines.

Li Yaozong stood beside the line for a while.

A young worker looked up at him.

Leader?

Li Yaozong nodded.

The young worker set down his work.

Leader, I have a suggestion.

Speak.

Could we have a ten‑minute break every two hours?

He pointed at the coworker beside him.

Sitting too long hurts the back, eyes get tired. Ten minutes rest, then we work faster.

A few people nearby echoed.

Yeah, can't stand sitting forever.

Even going to the restroom you have to run.

Ten minutes is enough.

Li Yaozong listened after they finished.

Why not go to the Workshop Director to report?

The young worker scratched his head.

We reported it. The Director said, if we rest we work less, and work less means earn less.

Li Yaozong was silent for a few seconds.

Then he asked.

If the company mandates a ten‑minute break every two hours, keeps wages the same, would you be willing to have a half‑hour break at four o'clock on the night shift?

The young worker was stunned for a moment.

"Of course I'm willing."

A few people nearby also laughed.

"How could that be?"

"How could the company be so kind?"

Li Yaozong gave no answer.

He turned and kept walking forward.

At seven p. m., Li Yaozong returned to Wanxiang Dasha.

He didn't go straight to his office; instead, he had his secretary inform all core senior executives that a meeting would be held at eight.

At exactly eight, it was still that conference room.

And the same people were there.

Li Yaozong recounted, in full detail, everything he had seen and heard that afternoon.

"Clothing factory: workers say someone is envious of their high wages and wants to cut their pay."

"Electronics factory: workers want a ten‑minute break every two hours, but the Workshop director disagrees."

He looked at the people present.

"What do you think?"

The conference room fell silent for a few seconds.

He Xiao spoke first.

"Li, these two matters are of different nature."

He looked at Li Yaozong.

"The wage issue is a mindset problem of individual managers. When they feel costs are high, they want to squeeze costs. But the workers are paid piece‑rate, so more work means more pay; there's nothing wrong with that."

He paused briefly.

"The break issue is a systemic problem. Assembly‑line work is indeed tiring. A ten‑minute rest to recuperate could actually raise efficiency."

Wang Bo chimed in from beside.

"Let me add: the root of workers' complaints about high wages may lie in middle management. They will devise any scheme to meet targets. Cutting workers' wages is the simplest."

Zhao Ming nodded.

"Middle management indeed needs training. They can't just focus on KPI without looking at the real situation."

Li Yaozong listened and nodded.

"Everything you said is correct."

He stood up.

"But what I want to talk about today isn't those two problems themselves."

He walked to the window.

"Wanshang now has two trillion in revenue and over a million employees. Everyone sitting in this conference room is a senior executive. How many of the rank‑and‑file have you seen? How many have you heard of?"

He turned around.

"Today I went to the Workshop; when the workers saw me, their first reaction was 'the leader is here.' They rarely see us; if they have an issue they can only approach the Workshop director. The director, to meet targets, squeezes their wages and won't let them rest. What can they do?"

He looked at the people present.

"We discuss strategy, technology, and market every day, but fundamentally—how well those who do the work are living?"

The conference room fell silent.

Li Yaozong walked back to his seat.

"I have decided to do a few things."

He took out a sheet of paper and began writing.

"First, meals will be free."

Everyone was taken aback.

"All factory canteens, starting next month, will provide three free meals a day. The standard follows the current one; if it's insufficient we'll add more."

He continued writing.

"Second, each person gets one seasonal fruit per day."

"Apples, bananas, oranges, pears—rotating. Have logistics purchase them to ensure freshness."

"Third, every plant must have a recreation building."

He looked up at He Xiao.

"A library, ping‑pong room, board‑games room, and screening hall must all be present. When workers finish work, they'll have a place to go."

He Xiao nodded.

"Fourth, extra meals on holidays. On May Day, National Day, Mid‑Autumn, and Spring Festival, the canteen adds dishes. On Dragon Boat Festival we give zongzi, on Mid‑Autumn mooncakes, and for the New Year we distribute New‑Year goods."

"Fifth, a gala. Each plant must hold at least two each year. Workers produce the program, the company provides the prizes. Cash awards are given on the spot."

"Sixth, establish an employee feedback channel to receive and understand workers' opinions, including whether any employee has suffered oppression or other unfair treatment."

When he finished, he pushed the paper to the center of the table.

"These matters will be led by the Administrative Department and implemented starting next month."

Fang Wenshan raised his hand from beside.

"Li, all together this will cost a lot of money in a year."

Li Yaozong looked at him.

"Roughly how much?"

Fang Wenshan thought for a moment.

Meals are free; one person costs twenty yuan a day, a million people cost twenty million a day, over seventy billion a year.

He paused.

"All the rest together could be over a hundred billion."

The conference room fell silent for a few seconds.

One hundred billion.

A quarter of last year's profit.

Li Yaozong said nothing.

He stared at the paper for a long time.

Then he lifted his head.

"What I'm talking about is the frontline workers; this is their benefit, and this money is worth spending."

"Wanshang has made a lot of money these past two years," he said, "where did this money come from?"

He looked at the people present.

"It comes from those workers. They stand on the assembly line, sit at sewing machines, move things in the warehouse, and toil in the Workshop."

He paused.

"Without them, we are nothing."

He stood up.

"One hundred billion, not a small sum. But spending it on the workers is worthwhile."

He looked at the administrative staff.

"Carry it out. If there are difficulties, come find me."

After the meeting adjourned, Li Yaozong did not leave immediately.

He sat alone in the conference room, looking out the window.

Shenzhen's night is beautiful, ten thousand lights.

Among those lights, how many belong to his factory's workers?

He didn't know.

But he knew that starting tomorrow, their lives would be a little better.

At least they could have three free meals.

At least they could eat fresh fruit every day.

At least they'd have a place to go after work.