Tech Giants: Starting from Bankrupt Companies

74: Chapter 74: Integration BlueprintJuly 8th, 2:00 PM, Xingchen Heavy Industry R&D Center Conference Room.

The whiteboard in the conference room was already densely covered with formulas, charts, and technical roadmaps.

Zhao Tiezhu stood at the front, sleeves rolled up to his elbows, still gesturing with a whiteboard marker that had run out of ink.

This manufacturing expert, usually taciturn, seemed like a different person once he started talking about technical issues.

Su Chen and Lin Wan sat in the first row, with the merger proposal approved in the morning spread out before them.

Sitting next to them were seven technical backbones drawn from various departments—they would form the first ”Shenyang Integration Vanguard Team” in three days.

”Alright, let’s begin the detailed report on the technical integration plan.”

Zhao Tiezhu took a deep breath and switched to the projector.

”I call this plan the ’Wedding of North and South Technologies.’ It’s not about who swallows whom, but about the fusion and regeneration of two technical genes.”

The screen lit up, showing a three-layer pyramid structure diagram.

”The first layer is the R&D system.”

Zhao Tiezhu zoomed in on the top of the pyramid.

”Shenyang Machine Tool has a ’Heavy Machine Tool Research Institute,’ established in 1978, which was once one of the top three research institutes in the domestic machine tool industry.”

”Although there has been a serious brain drain, the framework remains—experimental equipment, testing instruments, and forty years of technical archives.”

He brought up a photo of the institute: a five-story Soviet Union-style building.

Many of the windows were broken, but the copper plaque hanging at the entrance was still shiny.

”Our plan is to retain this institute but inject new blood,” Zhao Tiezhu said.

”Xingchen will build a new ’Digital Design and Simulation Center’ within the institute, equipped with twenty high-performance workstations, and introduce our self-developed machine tool design software and dynamic simulation platform.”

He looked at Su Chen.

”There is a key decision here—the choice of the institute’s director.”

”I suggest implementing a ’Dual-Director System’.”

”The Shenyang side will be led by the former deputy director, 62-year-old Senior Engineer Zhang Jianguo, who was among the first in the country to participate in CNC system R&D; the Xingchen side will be led by Dr. Li Xiang, our 35-year-old director of the Digital Design Department.”

Lin Wan frowned.

”Dual directors? Won’t that lead to low decision-making efficiency?”

”On the contrary,” Zhao Tiezhu explained.

”Senior Engineer Zhang is familiar with traditional experience in heavy machine tool design and knows which structures have been time-tested; Dr. Li is skilled in digital design and can use simulation to optimize traditional structures.”

”They need to cooperate—for example, when designing a new heavy-duty gantry milling machine, Senior Engineer Zhang proposes the initial plan, and Dr. Li’s team performs finite element analysis and topology optimization to find out where weight can be reduced without losing rigidity, and which structures need strengthening.”

He brought up a comparison chart: on the left was a machine tool column using traditional design methods, thick and bulky; on the right was the structure after topology optimization, with weight reduced by 30% while rigidity actually increased by 15%.

”But the most critical part is this.”

Zhao Tiezhu clicked on a new module.

”**’Specially Appointed Practical Professor’ System**. We will invite Master Liu and other Grade 8 technicians and veteran engineers to serve as practical professors at the institute.”

”Every Tuesday afternoon, they will give lectures to young engineers—not on theory, but on ’practical combat’.”

He gave an example: ”For instance, Master Liu will talk about ’The Top Ten Signs of Machine Tool Guide Rail Wear and How to Deal with Them.’ These experiences are not in textbooks.”

”After class, the Old Master Craftsman will take the young engineers to the workshop to demonstrate on real machine tools.”

Su Chen nodded.

”This is good. But how do we ensure the Old Master Craftsman is willing to teach? After all, the concept of ’teaching the apprentice and starving the master’ is very strong among the older generation.”

”Two-pronged incentives.”

Zhao Tiezhu was prepared.

”First, material: Specially appointed professors get an extra 8,000 yuan per month, and for every apprentice they train who can operate independently, they get a 20,000 yuan bonus.”

”Second, honor: Establish a ’Lifetime Technical Achievement Award’ and name technical improvement projects after the Old Master Craftsman—such as the ’Liu Weiguo Guide Rail Repair Method’.”

He continued, ”We also need to establish a ’Difficult Problems Task Force’.”

”When production encounters problems that cannot be solved by conventional methods—such as a certain old machine tool that just can’t be calibrated for precision—a temporary team will be formed consisting of one Old Master Craftsman and two young engineers.”

”The Old Master Craftsman uses experience to judge the possible cause, and the young engineers use sensors and data modeling to verify it, working together to overcome it.”

Lin Wan recorded in her notebook: ”This model makes tacit knowledge explicit.”

”Exactly.”

Zhao Tiezhu’s eyes lit up.

”This is the core of integration—**’Data-fication of Experience’**.”

”We want to turn the knowledge hidden in the Old Master Craftsman’s ’feel’ and intuition into quantifiable, inheritable process parameters.”

The second layer of the pyramid lit up.

”The middle layer is the production system.”

Zhao Tiezhu’s tone became serious.

”This is the most painful, but necessary part—a major overhaul of equipment.”

The screen displayed three lists.

**Red List (Eliminate):** Equipment manufactured before 1990 will be scrapped, including those old machine tools from the Soviet Union era and first-generation domestic imitation equipment.

”I know there’s sentiment involved, but the precision can no longer meet modern manufacturing requirements, and the maintenance cost is higher than new equipment.”

**Yellow List (Evaluation/Retrofit):** Equipment introduced or produced between 2000-2010.

”Organize experts to evaluate: If the precision can reach 80% or more of current standards after retrofitting, and the retrofitting cost does not exceed 40% of new equipment, then retrofit.”

”For example, that German five-axis gantry milling machine; although rusty, the basic structure is intact.”

”We estimated that spending 30 million on retrofitting can restore performance to 85% of a new machine, while a new machine would cost 80 million.”

**Green List (Retain/Upgrade):** Large casting workshop (with overhead cranes, casting pits, capable of casting hundred-ton workpieces), heat treatment workshop (with deep well quenching furnaces, large carburizing furnaces), heavy assembly workshop (floor load capacity 30 tons per square meter, crane maximum lifting capacity 500 tons).

”The value of these workshops is not in the equipment, but in the qualifications and capabilities.”

”To build a heavy-duty workshop of the same scale, the investment would be at least 2 billion, and the approval cycle would be over three years.”

Zhao Tiezhu brought up the new production line plan: ”On top of what is retained, we need to build four new intelligent production lines.”

”The core is to introduce Xingchen’s three major systems: First, the self-developed CNC system ’Xingkong 3.0’; second, the online detection and compensation system; third, the intelligent logistics and MES production management system.”

He showed a simulation video: In the reconstructed workshop, AGV carts automatically transport materials, robotic arms load and unload, each machine tool uploads machining data in real-time, and the central control screen displays the operating status of the entire workshop.

”But this will encounter the greatest resistance—**’Human Habits’**.”

Zhao Tiezhu admitted frankly.

”Shenyang workers are accustomed to paper drawings, manual records, and experience-based judgment.”

”Getting them to accept full digital management requires patience and strategy.”

He proposed a transition plan: ”In the first phase, dual-track operation.”

”The Old Master Craftsman can use traditional methods, but young workers must use the new system.”

”Compare them before getting off work every day: for products processed by the Old Master Craftsman based on experience versus those guided by the digital system, what are the precision, efficiency, and cost? Let the data speak.”

The base of the pyramid lit up; this was the largest layer.

”The base is the integration of people.”

Zhao Tiezhu displayed an organizational structure chart.

”I designed ’Apprenticeship 2.0’.”

”Each Grade 8 technician will be equipped with 2 young engineers from Xingchen + 1 young technician from Shenyang to form a four-person team.”

There was some whispering in the conference room; this structure was very novel.

”The task of the four-person team is not simply ’teaching and learning’.”

Zhao Tiezhu zoomed in on the duty description.

”They have three major tasks: First, technical inheritance—the Old Master Craftsman teaches the young people tooling and fixture design, cutting parameter optimization, and fault diagnosis; second, experience transformation—jointly completing the ’Data-fication of Unique Skills’ project; third, process innovation—proposing improvement plans for specific production problems.”

He gave a concrete example: ”For instance, Master Liu, his greatest skill is ’identifying location by sound’—he can judge the degree of tool wear and whether the cutting is stable just by listening to the cutting sound.”

”How do we ’data-fy’ this unique skill?”

Zhao Tiezhu brought up a research plan: ”The four-person team will do this: install high-precision acoustic sensors on the machine tool to collect cutting sounds under different working conditions; at the same time, use force gauges and vibration sensors to record cutting force and vibration data; then use machine learning algorithms to establish a ’sound feature-processing state’ correspondence model.”

”The ultimate goal is: to develop an ’intelligent diagnostic system’ that can automatically judge the processing state and issue warnings.”

”During this process, the Old Master Craftsman provides experience samples—’this sound is normal’, ’this sound means the tool is about to break’; the young engineers are responsible for data collection and algorithm development; the young technician is responsible for actual operation verification.”

Lin Wan asked: ”What about incentives? Why would the Old Master Craftsman share his trade secrets?”

”Triple incentives,” Zhao Tiezhu was well-prepared. ”First, every time a unique skill is successfully digitized, when applying for a patent, the Old Master Craftsman will be the first inventor, and the young engineer will be the second and third inventors. Second, the master-apprentice team will enjoy a 20% share of the profits generated by the patent conversion. Third, establish a ’Technical Heritage Medal’, selected annually, with winners enjoying a special lifetime allowance.”

He added: ”More importantly, there is the **career path**. Old Master Craftsmen can be promoted to ’Senior Technical Experts’ with salaries benchmarked at the director level; young engineers can grow rapidly through this project; outstanding young technicians from Shenyang can be transferred to Xingchen Headquarters for further training.”

Su Chen pondered: ”This model turns personal experience into organizational assets.”

”Yes,” Zhao Tiezhu nodded. ”And this process itself is the best way for the cultural integration of the North and South—breaking down barriers naturally while solving technical problems together.”

Zhao Tiezhu switched to the next section: ”Now, let’s talk about product line planning. We are adopting a ’Four Arrows’ strategy.”

**First Arrow: Capacity Transfer (0-6 months)**

”Authorize Shenyang to produce four of Xingchen’s existing mature products.” The screen listed the product list: 3-axis machining centers, Jingwei series CNC lathes, Luban series CNC milling machines, and Gongshu series drilling and boring machines.

”Goal: Within half a year, the Shenyang base’s monthly production capacity will reach 100 units for 3-axis machines, 30 units for Jingwei, 20 units for Luban, and 15 units for Gongshu. This will utilize Shenyang’s facilities and personnel to increase Xingchen’s total production capacity by **80%**.”

**Second Arrow: Division and Collaboration (6-12 months)**

”Form a North-South division of labor. Shenyang will focus on **heavy-duty, special, and batch** products—such as large wind power machining centers, marine diesel engine block special machines, and batch automotive parts production lines. These products require heavy-duty workshops and large-scale production organizational capabilities, which is exactly Shenyang’s strength.”

”Xingchen’s Guancheng base will focus on **high-end, precision, and customized** products—5-axis machining centers, aerospace-specific machine tools, and flexible manufacturing units. These products require rapid response and high precision, which is Guancheng’s strength.”

”The two locations will collaborate through an industrial internet platform for intelligent order allocation—the system automatically assigns production tasks based on product characteristics, capacity load, and logistics costs.”

Zhao Tiezhu showed a simulated order allocation scenario: An automotive group orders five engine production lines, and the system automatically splits them—the heavy-duty beds are manufactured in Shenyang, the precision spindle boxes are manufactured in Guancheng, and finally, they are integrated at the customer’s site.

The meeting entered its most critical part.

Zhao Tiezhu’s expression became extremely serious: ”Next is the ’trump card’ of this acquisition—military technology conversion.”

He pulled up the directory of 37 classified military processes, several of which were specially marked in red.

”In the past, these technologies were locked in the archives due to confidentiality requirements. But now, provided we comply with national regulations, we can carry out **limited civil conversion**.”

He clicked on the first item: ”For example, this ’large-size complex surface precision milling process’ was originally used for submarine propeller machining. Our assessment is: it can be improved and used for wind power blade mold machining.”

Gasps were heard in the meeting room.

Zhao Tiezhu explained: ”Currently, domestic wind power blade mold machining for large surfaces mainly relies on manual trimming, which has long cycles and low precision. This process can achieve 5-axis linkage precision milling, shortening the machining cycle by 40% and improving precision by two levels. This single conversion alone will allow Xingchen to enter the high-end market of wind power equipment manufacturing, with an estimated annual output value of over 2 billion.”

”Second item,” he clicked on another file, ”’High-hardness alloy deep carburizing process’, originally used for armor plate heat treatment. We can use it for high-end mold steel treatment to solve the contradiction between surface hardness and core toughness in large injection molds. This technology can triple the mold lifespan, and three automotive mold factories have already expressed their willingness to pay a high price for the processing service.”

Su Chen asked: ”What are the conditions for conversion?”

”Three steps.” Zhao Tiezhu pulled up the roadmap. ”Step one, apply for conversion permission from the State Administration of Science, Technology and Industry for National Defense, proving that civil use will not endanger national security; step two, establish a ’**Military Technology Conversion Special Zone**’ at the Shenyang base, with physical isolation, independent networks, and full monitoring; step three, restrict the export of all converted products, limiting them to use by domestic high-end manufacturing enterprises only.”

He added: ”Conservatively estimated, at least 15 of the 37 processes can be converted for civil use, and it is expected to generate direct benefits of over 10 billion within three years.”

The final highlight came.

”Based on these military assets, I suggest establishing a wholly-owned subsidiary—**Xingchen Military Industry Co., Ltd.**” Zhao Tiezhu released the equity structure chart: Xingchen Heavy Industry holds 100% of the shares, with a registered capital of 1 billion.

”This company will take over all the military qualifications of Shenyang Machine Tool: Weaponry and Equipment Research and Production License, Equipment Contractor Qualification, Level 3 Confidentiality Qualification, and GJB Quality Management System Certification. These qualifications normally take three years to apply for, and it’s not even guaranteed to pass.”

He elaborated on the business plan:

**Tier 1: Military Components (1-2 years)**

”Start with relatively simple precision gearboxes, missile steering gear housings, and radar antenna bases. These products have high technical requirements but belong to the ’components within components’ category, have low political risk, and are easy to enter.”

**Tier 2: Subsystems (2-3 years)**

”Such as tank turret rotation mechanisms, self-propelled artillery elevation systems, and ship-borne radar stabilization platforms. These are already core subsystems and require deep cooperation with military industrial groups.”

**Tier 3: Complete Machine Cooperation (3-5 years)**

”Jointly develop special machine tools with military industrial groups—such as aero-engine blade grinding centers, submarine propeller 5-axis milling machines, and missile shell integrated processing equipment. At this level, we become the **equipment manufacturers for national defense equipment**.”

The profit analysis table showed: The gross profit margin for military business can reach 45%-60%, far higher than the 25%-30% for civil machine tools.

”I have calculated,” Zhao Tiezhu said, ”if development goes smoothly, the military subsidiary can contribute more than 30% of the profits to Xingchen Heavy Industry within three years. More importantly—it will become Xingchen’s ’strategic moat’. With a military background, we will gain huge advantages in technological R&D, policy support, and high-end talent attraction.”

Regarding the general manager candidate, Zhao Tiezhu recommended Chen Zhiyuan—Senior Technical Director of Xingchen Heavy Industry, fifty-two years old, who has participated in several military pre-research projects, understands technology, and is familiar with the operating rules of the military industrial system.

The report ended. The meeting room was quiet for a long time.

Su Chen applauded first, and then the applause merged into one. This was not just recognition of the plan, but also a tribute to the seventy-two hours of sleepless work by Zhao Tiezhu’s team.

”Tiezhu,” Su Chen stood up, ”This plan has clarified everything I wanted to say but couldn’t articulate. Especially the metaphor of the ’wedding of Northern and Southern technologies’—it’s not about who annexes whom, but about mutual nourishment, giving birth to stronger offspring.”

He looked at everyone: ”But I must remind you: no matter how beautiful the blueprint is, implementation is key. Over in Shenyang, there are suspicious eyes, feelings of distrust, and a wait-and-see attitude of ’let’s see what you can come up with.’ Our advance team must not only have technology, but also patience, broad-mindedness, and the determination to warm up a cold bench.”

Lin Wan added: ”I have a requirement: all colleagues going to Shenyang must undergo one week of cross-cultural communication training. Learn how to deal with the masters from the Northeast—when to be direct, when to be tactful, how to toast at the dinner table, and how to address people in the workshop.”

Zhao Tiezhu nodded: ”It has already been arranged. The training instructors are German HR experts invited from FAW-Volkswagen—they have experienced Sino-German cultural integration and have mature experience.”

The meeting ended at five in the afternoon.

As the sun set, the glass curtain wall of the R&D center reflected golden light.

When Zhao Tiezhu was packing up his materials, Su Chen walked up to him: ”Tiezhu, do you know what the hardest part of this plan is?”

”Technical integration? Equipment modification?”

Su Chen shook his head: ”It is the **integration of hearts**. We need to make the Old Master Craftsmen in Shenyang believe that we are not there to eliminate their methods, but to let those methods revitalize in the new era; we need to make our young people understand that those old experiences are not backward, but another form of wisdom.”

He looked out the window: ”Whether this ’wedding’ can succeed doesn’t depend on how perfect the plan is, but on whether we have the broad-mindedness to respect history and look towards the future.”

Zhao Tiezhu said solemnly: ”General Manager Su, give me one year. A year later, please go to Shenyang, listen to the Old Master Craftsman use Xingchen’s system to machine the first part, and watch the young people and the Old Master Craftsmen walk to the cafeteria with their arms around each other’s shoulders—that is true integration.”

”Okay, I’ll wait for you to invite me to the wedding banquet.”

The two looked at each other and smiled.

The wedding of Northern and Southern technologies was thus scheduled. And the most daring integration experiment in the history of China’s manufacturing entered the countdown.