"In spirit, we are always second-class citizens in the industry."
Chen Qihong has defined the sewing machine parts business in a tragic manner. As the chairman of Chongqing Zero Precision Machinery Co., Ltd. and the real power group of the Chinese sewing machine parts industry, he feels that the Chinese sewing machinery industry has not treated the sewing machine parts companies in a fair manner. .
Unfair decades of history of the development of China's sewing machinery industry, the quarrel between the entire machine company and parts and components companies has never stopped. Sometimes they were intimate, but not long before they again put their differences on the table.
Especially in the several years before and after the outbreak of the international financial crisis, the cruel market reality and the subsequent sudden market recovery, the division of zero was amplified in panic. From the initial oversupply of spare parts to the extremely short supply of spare parts, the lack of stable performance of the Chinese sewing machine zero-setting system is threatening the healthy and benign development of China's sewing machinery industry.
"In the eyes of the sewing machine companies, we are their vassal, bank deposit machines that do not need interest."
Chen Qihong’s allegations of the zero-sum cooperation relationship have not been stigmatized. This is based on the interpretation of the cooperation situation between China's sewing machine manufacturers and parts and components companies before the outbreak of the international financial crisis.
At that time, the zero-setting system was hampered by the industry's triangular debt, and many parts and components companies had small scale and low profit levels. In cooperation with complete machine companies, the bargaining power was not strong, and they were often forced to sell parts and components through credits. The zero-setting system has a phenomenon of default on payment in a considerable range.
Chen Qihong therefore believes that this type of "fundamental" supply system based on credits has caused parts and components companies to be injured.
“Originally, the profitability of parts and components companies in the entire industrial chain of sewing machines was relatively low. The whole machine enterprises also occupied our cash flow. In addition, social attractiveness could not attract other sources of funds. This resulted in insufficient funds for our technological transformation. One of the reasons."
However, the lack of technology reform funds has resulted in low technical content of parts and components, low quality levels, and low added value, which have hindered the quality and technological upgrading of China's complete machine products.
To a certain extent, this eventually became the main reason why certain machine companies defaulted on payment and “say insultsâ€.
As a result, the development of the zero-setting system has formed a deadlock to a certain extent, and the overall upgrading of the industry lacks an upward driving force at the supply chain level.
The accidental arrival of the reversal of the financial crisis undoubtedly impacted the zero supply system of Chinese sewing machines. However, at present, the financial crisis has not directly “cultivated†and upgraded a more competitive and healthy mode of zero-sum cooperation. It does not seem to have solved the deadlock of zero-sum cooperation. However, the international financial crisis has also had a direct and profound impact on the comparison of forces between zeros.
Simply put, after the international financial crisis, due to the shortage of supply and the integration of the parts and components industry, the spare parts companies’ industry bargaining power has increased significantly, and the improvement of one side’s strength is considered to be a shake in the future. The basis of the cooperation model, although this is after the entire parts and components industry experiences pain and substantial losses.
Chen Qihong described the horror of the parts and components industry during the financial crisis and the changes in the relationship between the zeros after the crisis.
“As we all know, during the financial crisis, Chinese sewing machine spare parts companies died more and suffered more damage than whole machine companies. This is because the size of parts and components companies is generally small and the profitability is not high enough to prevent the risks.†Chen Qihong said, “The impact of the financial crisis is also huge among those spare parts companies that have survived, because underemployment has led to the serious loss of employees. These key employees have all spent a lot of time on the cultivation of their employees and their departure. It has greatly limited the capacity recovery of parts and components companies."
With the advent of a market recovery after the crisis, the remaining parts and components companies were unable to restore production capacity in a timely manner. The shortage of parts and components products completely overturned the credit model of the whole machine company.
According to Yang Yubin, the assistant to the chairman of Tongyu Holding Group, the whole machine company had taken cash to send personnel to specialize in spare parts enterprises in 2010. This is vividly interpreted as the "turnover" of parts and components companies.
In Chen Qihong's view, this reflects the past that parts and components companies have not been treated well. It partly led to the "unbalance" of the sewing machine's supply chain.
“Although the market is recovering, our production capacity has recovered very slowly. Because of our technological transformation, our sources of funding are very limited and we have accumulated only through the development of profit rolling. We cannot get local governments like whole companies. With the support of the whole machine companies, they can get local subsidies such as financial subsidies, bank loans, etc., with the introduction of high-tech projects.†Chen Qihong said, “At the same time, our production lacks enough technical staff, and the reduction in staff during the financial crisis is not possible after the crisis. It was smoothly added because our industry’s social attractiveness is not strong. We can only produce in batches and not on a large scale. Unlike the automobile and other industries, we can develop institutionalized production and enable all workers to work steadily. Therefore, we recover. The production capacity is basically based on overtime production."
To explore the surface of the sewing machine parts companies that have turned over, and now they hope to re-clear the relationship between the past zero, fundamentally protect their interests are not damaged, and the whole machine company also expects to establish a more stable, high-quality parts supply chain .
As a result, the industry seems to be eagerly anticipating the unraveling of relations in the past and upgrading to a more stable supply chain system with higher technological content and higher added value.
“Now, there is still a gap between the quality technology of the whole machine and the international top level, and it needs to be improved. It requires the joint efforts of the whole industrial chain of the sewing machine.†Chen Qihong said, “but this is not difficult for the complete machine company to pull. Because the initiative is in the whole machine enterprise, their economic strength is the strongest. If the whole machine company has no intention to improve the quality of the supply chain, then the parts and components companies will not have the relevant impulse."
From the point of view of the entire company, improving the quality of parts and components has become an urgent task for the development of the whole machine.
“At present, the industry has not yet entered a sound channel for development. On the one hand, we need to guarantee supply. On the one hand, we need a sewing machine that requires more parts than a car, and it is difficult for the whole machine company to complete it alone. Therefore, stable supply is needed. On the other hand, we also need to change the past that the value-added of parts and components is not high, the technology is not high, and parts companies can buy just a few sets of cutting beds.†Yang Xibin said, “So after the financial crisis, After so many twists and turns, we have some ideas in the future zero-cold cooperation model, such as the introduction of an upstream shareholding model. Although there is no clear timetable, we hope to change it.â€
In this regard, Chen Qihong expressed his approval. In his view, if the whole machine company actively develops strategic partnerships with parts and components companies, it is very visionary. Long-term development will surely create a huge competitive advantage.
"Their driving role will surely be the response of the parts and components companies."
Chen Qihong has defined the sewing machine parts business in a tragic manner. As the chairman of Chongqing Zero Precision Machinery Co., Ltd. and the real power group of the Chinese sewing machine parts industry, he feels that the Chinese sewing machinery industry has not treated the sewing machine parts companies in a fair manner. .
Unfair decades of history of the development of China's sewing machinery industry, the quarrel between the entire machine company and parts and components companies has never stopped. Sometimes they were intimate, but not long before they again put their differences on the table.
Especially in the several years before and after the outbreak of the international financial crisis, the cruel market reality and the subsequent sudden market recovery, the division of zero was amplified in panic. From the initial oversupply of spare parts to the extremely short supply of spare parts, the lack of stable performance of the Chinese sewing machine zero-setting system is threatening the healthy and benign development of China's sewing machinery industry.
"In the eyes of the sewing machine companies, we are their vassal, bank deposit machines that do not need interest."
Chen Qihong’s allegations of the zero-sum cooperation relationship have not been stigmatized. This is based on the interpretation of the cooperation situation between China's sewing machine manufacturers and parts and components companies before the outbreak of the international financial crisis.
At that time, the zero-setting system was hampered by the industry's triangular debt, and many parts and components companies had small scale and low profit levels. In cooperation with complete machine companies, the bargaining power was not strong, and they were often forced to sell parts and components through credits. The zero-setting system has a phenomenon of default on payment in a considerable range.
Chen Qihong therefore believes that this type of "fundamental" supply system based on credits has caused parts and components companies to be injured.
“Originally, the profitability of parts and components companies in the entire industrial chain of sewing machines was relatively low. The whole machine enterprises also occupied our cash flow. In addition, social attractiveness could not attract other sources of funds. This resulted in insufficient funds for our technological transformation. One of the reasons."
However, the lack of technology reform funds has resulted in low technical content of parts and components, low quality levels, and low added value, which have hindered the quality and technological upgrading of China's complete machine products.
To a certain extent, this eventually became the main reason why certain machine companies defaulted on payment and “say insultsâ€.
As a result, the development of the zero-setting system has formed a deadlock to a certain extent, and the overall upgrading of the industry lacks an upward driving force at the supply chain level.
The accidental arrival of the reversal of the financial crisis undoubtedly impacted the zero supply system of Chinese sewing machines. However, at present, the financial crisis has not directly “cultivated†and upgraded a more competitive and healthy mode of zero-sum cooperation. It does not seem to have solved the deadlock of zero-sum cooperation. However, the international financial crisis has also had a direct and profound impact on the comparison of forces between zeros.
Simply put, after the international financial crisis, due to the shortage of supply and the integration of the parts and components industry, the spare parts companies’ industry bargaining power has increased significantly, and the improvement of one side’s strength is considered to be a shake in the future. The basis of the cooperation model, although this is after the entire parts and components industry experiences pain and substantial losses.
Chen Qihong described the horror of the parts and components industry during the financial crisis and the changes in the relationship between the zeros after the crisis.
“As we all know, during the financial crisis, Chinese sewing machine spare parts companies died more and suffered more damage than whole machine companies. This is because the size of parts and components companies is generally small and the profitability is not high enough to prevent the risks.†Chen Qihong said, “The impact of the financial crisis is also huge among those spare parts companies that have survived, because underemployment has led to the serious loss of employees. These key employees have all spent a lot of time on the cultivation of their employees and their departure. It has greatly limited the capacity recovery of parts and components companies."
With the advent of a market recovery after the crisis, the remaining parts and components companies were unable to restore production capacity in a timely manner. The shortage of parts and components products completely overturned the credit model of the whole machine company.
According to Yang Yubin, the assistant to the chairman of Tongyu Holding Group, the whole machine company had taken cash to send personnel to specialize in spare parts enterprises in 2010. This is vividly interpreted as the "turnover" of parts and components companies.
In Chen Qihong's view, this reflects the past that parts and components companies have not been treated well. It partly led to the "unbalance" of the sewing machine's supply chain.
“Although the market is recovering, our production capacity has recovered very slowly. Because of our technological transformation, our sources of funding are very limited and we have accumulated only through the development of profit rolling. We cannot get local governments like whole companies. With the support of the whole machine companies, they can get local subsidies such as financial subsidies, bank loans, etc., with the introduction of high-tech projects.†Chen Qihong said, “At the same time, our production lacks enough technical staff, and the reduction in staff during the financial crisis is not possible after the crisis. It was smoothly added because our industry’s social attractiveness is not strong. We can only produce in batches and not on a large scale. Unlike the automobile and other industries, we can develop institutionalized production and enable all workers to work steadily. Therefore, we recover. The production capacity is basically based on overtime production."
To explore the surface of the sewing machine parts companies that have turned over, and now they hope to re-clear the relationship between the past zero, fundamentally protect their interests are not damaged, and the whole machine company also expects to establish a more stable, high-quality parts supply chain .
As a result, the industry seems to be eagerly anticipating the unraveling of relations in the past and upgrading to a more stable supply chain system with higher technological content and higher added value.
“Now, there is still a gap between the quality technology of the whole machine and the international top level, and it needs to be improved. It requires the joint efforts of the whole industrial chain of the sewing machine.†Chen Qihong said, “but this is not difficult for the complete machine company to pull. Because the initiative is in the whole machine enterprise, their economic strength is the strongest. If the whole machine company has no intention to improve the quality of the supply chain, then the parts and components companies will not have the relevant impulse."
From the point of view of the entire company, improving the quality of parts and components has become an urgent task for the development of the whole machine.
“At present, the industry has not yet entered a sound channel for development. On the one hand, we need to guarantee supply. On the one hand, we need a sewing machine that requires more parts than a car, and it is difficult for the whole machine company to complete it alone. Therefore, stable supply is needed. On the other hand, we also need to change the past that the value-added of parts and components is not high, the technology is not high, and parts companies can buy just a few sets of cutting beds.†Yang Xibin said, “So after the financial crisis, After so many twists and turns, we have some ideas in the future zero-cold cooperation model, such as the introduction of an upstream shareholding model. Although there is no clear timetable, we hope to change it.â€
In this regard, Chen Qihong expressed his approval. In his view, if the whole machine company actively develops strategic partnerships with parts and components companies, it is very visionary. Long-term development will surely create a huge competitive advantage.
"Their driving role will surely be the response of the parts and components companies."
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