Chapter 1718 Thomson's Trouble

The economic crisis in the United States has caused serious losses to many companies, including Thomson Corporation.

Thomson Corporation, as one of the giants in the consumer electronics field, ranks first in the world in terms of terminal equipment such as set-top boxes and rear projections. It also ranks among the top in the world in post-production of film and television, and sales channels for DVD discs. On an important project, I went the wrong way.

This project is a flat-screen TV.

Feng Yu reminded Thomson at the beginning that plasma TVs are not worth investing so much. In the future, flat-panel TVs will definitely have an advantage in LCD, because companies investing in this camp are hundreds of times more invested in plasma companies.

It's a pity that Thomson didn't pay attention to this at the beginning. They invested a lot in research and development of plasma, but the sales were very poor.

Although it was later announced that the focus would turn to LCD, plasma TVs did not give up. In the end, they also went two ways, but they were completely different from the four-star group in South Korea.

Originally a TV business with high profitability, it later caused an annual loss of several hundred million euros.

At the beginning, Thomson could bear the loss of several hundred million euros. As a world-class consumer electronics giant with huge assets, a few hundred million euros is nothing.

But they have also adopted a credit model in terms of electrical appliances sales in Europe and America. That is, consumers can pay a down payment, and then mortgage to pay for electrical appliances.

Before this, it didn't affect anything at all. The default rate is extremely low, but it can greatly increase their market share, making them the number one in North America and second only to Ximenzi in Europe.

Based on these market share data alone, their brand value is extremely high, and the company's stock price performance is also very good.

However, they have made the same mistake as Tongyong and other companies, that is, they should not allow their credit companies to dabble in financial projects such as real estate.

In the past two years, when the subprime mortgage business was popular in the United States, the credit company under Thomson Corporation also participated in the real estate credit business.

Although they didn't do real estate credit business directly, they bought a lot of subprime mortgage bonds, thinking that they could make money by appreciating their value. At that time, their credit company could make a lot of money every year.

But now, subprime mortgage bonds are about to become junk bonds, and the default rate has risen sharply, causing Thomson, a credit company, to lose a lot of money.

Moreover, the default rate of their electrical appliances credit is getting higher and higher. More and more bad debts appeared, causing major problems in the operation of their company's funds.

Even some of their joint ventures around the world have begun to suffer large losses due to the deteriorating economic situation. For example, China's joint venture company, India's joint venture company and so on.

Losses are mounting, and the profitability of profitable businesses is also declining, which makes their funds more and more tight. Moreover, the original production cost of Thomson was higher than that of other competing enterprises.

Isn't France implementing a four-day work system, which is different from the four-day work system in other countries. Although other countries have a four-day working system, the working time is ten hours a day, that is, the same is forty hours a week, but this way you can save one day of commuting to work.

Some companies have a four-day working system, and the working hours are also eight hours. Such companies have cut wages for their employees.

However, Thomson not only has a four-day and eight-hour working system, but also does not cut salaries for employees, which reduces their production efficiency and increases their costs.

When an economic crisis occurs, it is usually accompanied by the bankruptcy of factories and the unemployment of workers. Why is this? Because this aspect of expenditure is actually the largest part of the company's expenditure.

Thomson's expenditure in this area is also the world's top.

When product sales are declining, profits are falling, and some businesses are even experiencing large losses, they still have to pay such high salaries and benefits. How can companies avoid problems?

Feng Yu has long reminded Thomson that there are great hidden dangers in their business operations. But he and Thomson are just a cooperative relationship,

Not too close either.

Talking too much will make people think that he wants to intervene in the management of Thomson's company.

Thomson's crisis at this time was entirely their own fault, and Feng Yu had fulfilled his duty as an ally.

In fact, Feng Yu still likes Thomson's brand, the sales channels are also very good, and many of them are world-leading in technology. But in terms of business management, Feng Yu is very disdainful.

Although the production cost in Huaxia has been increasing, have people's wages started 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, which is a way to reduce labor costs.

Of course, finding some of the world's top OEMs is also one of the ways to reduce costs.

Thomson's high cost is also self-inflicted.

Doesn't Thomson know that his cost is high? Of course they knew, but they never cared about it before.

They have a big brand, strong technology, high added value of products, good sales, and naturally good profits.

But those disadvantages came to the fore when sales slumped and other brands started competing with them.

Thomson never thought that an economic crisis would break out in the United States, and it would be so serious. And this economic crisis has had such a great 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 the income drops, the consumption power will naturally drop, and fewer people will buy their products. Their factories will cut production, and their profits will drop.

These associated effects have dealt a great blow to Thomson. They are now also considering whether to sell some businesses to ensure that the company can survive this difficulty smoothly.

At the last time, they will also sell some shares in the joint venture company. After getting rid of those burdens, they should be able to survive this cold winter. As soon as the economy recovers well, they can return to profitability.

They don't worry at all if they have more debts. Isn't it normal for large companies to have debts? As long as the debt ratio does not exceed the safety line, it will be fine.

As for the shares of Huaxia and other joint venture companies that they plan to sell, they need to find some powerful people to take over, and at the same time, they must not strengthen their competitors.

Therefore, they excluded companies from Europe, island countries, and South Korea, and aimed at their allies, Fengyu Electronics. So Thomson took the initiative to contact Liu Chuanzhi and expressed his intention to sell the shares of the joint venture company.

Liu Chuanzhi asked Feng Yu whether to acquire the shares of this joint venture company. 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 directly refused. It sounds good to increase the share, but it is a burden. The joint venture company does not include Thomson's brand. If it does, then this offer is worth considering.

Thomson was very angry when he learned of the rejection. They threatened that if this was the case, they would go to other camps!

... (To be continued.)

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