Chapter 8: The Decline of the Military Factory

At the entrance of the Red Star Machinery Factory, Director Li Gang from the Industrial Development Office shook Wang Ye's hand vigorously and smiled, "Welcome, Comrade Wang Ye."

In Li Gang, Wang Ye sensed a completely different demeanor from Liang Jinsong. While Liang Jinsong exuded the fierce aura of a military man despite nearing fifty, Li Gang was different, appearing much more approachable.

"Hello, Director Li. I look forward to working with you in the future."

With a passing thought, Wang Ye greeted Li Gang warmly.

In response to Wang Ye's words, Li Gang nodded without hesitation, chuckling, "Of course, of course! Without mentioning the reform of the Red Star Machinery Factory from military to civilian use, which is an important reform project led by the Fifth Machinery Ministry and the Ministry of National Defense, just your initiative to volunteer for this reform requires my full support!"

"Liang Director, am I right?"

Hearing Li Gang's words, Liang Jinsong, who had been smiling at the sidelines, paused for a moment, then cleared his throat and nodded, saying, "That's the point."

"However..."

With a slight change in tone, Liang Jinsong continued, "According to the requirements of the Fifth Machinery Ministry, we can provide at most thirty percent of the subsidy from previous years."

"And the time frame is only one year. The rest depends on your industrial system."

"How to find a way for the factory to survive is your problem."

Upon hearing Liang Jinsong's words, Wang Ye realized that they had already begun "negotiating" with each other. The Red Star Machinery Factory was about to undergo a military-to-civilian reform. In theory, during this one-year buffer period, the factory had two superiors: the Provincial Defense Management Office and the Yunhai City Industrial Bureau.

However, a problem arose: with the factory struggling to make ends meet and even feed its workers, which superior should it turn to for financial support?

If both superiors were wealthy, the problem would be non-existent. But, as it stood, both were broke!

"Director Li, what about your department?"

Liang Jinsong's question made Li Gang slightly embarrassed. He glanced at Wang Ye and then said, "Theoretically, we don't even have a penny."

"Our local industrial system's state-owned factories receive production tasks every year. Regardless of the quantity, they receive subsidies based on the planned production tasks. However, the Red Star Machinery Factory currently has no production tasks at all, which means there are no subsidies from the financial side."

"So, not only do we not have enough money to give them, even if we did..."

"If we were to give direct subsidies, other factories would question it. Uneven treatment is a major taboo!"

"This issue, Director Liang, you understand better than I do."

In the planned economy era, there was fundamentally no "trading" as such; only "exchange." For example, if a state-owned pastry factory produced a ton of pastries, they would be distributed to nearby supply and marketing cooperatives according to the planned demand, exchanged for grain coupons and oil coupons used by the masses.

As a result, state-owned pastry factories had no income. Their income came from subsidies. If, for instance, a ton of pastry production tasks were assigned by the higher authorities, the necessary materials like flour, eggs, and vegetable oil would be allocated to the pastry factory to fulfill the tasks. Some of the "profits" would also be subsidized to the workers of the state-owned pastry factory.

Of course, money did circulate in this process, but it was not direct buyer-seller transactions.

This was why Li Gang had said what he did. The Red Star Machinery Factory, having just transitioned from military to local control, lacked the ability to produce civilian products. Consequently, it couldn't obtain production tasks or subsidies.

This was also why the military-to-civilian reform was so difficult. Military factories barely produced civilian goods, so they couldn't obtain production tasks or subsidies, and local industrial systems, burdened with debt and struggling to stay afloat, didn't want to take on these military factories.

"I say, Director Li, how can you say that?"

"Our Red Star Machinery Factory is at least a pilot project for the national military-to-civilian reform. You won't even contribute a penny? Isn't that inappropriate?"

"Furthermore, after the military-to-civilian reform begins, the Red Star Machinery Factory will belong to your local industrial system. In theory, you must allocate production tasks to them!"

Upon hearing Li Gang's words, Liang Jinsong, who had been standing there, became anxious. If things continued like this, the Red Star Machinery Factory would not only face reform challenges, but might also face starvation within the next month.

As Liang Jinsong spoke, Li Gang smiled awkwardly and was about to respond when a slightly elderly voice interrupted.

"Director Liang? Director Li?"

"Hurry! Open the door for the two directors!"

The voice came from inside the gate. Wang Ye turned to look into the factory, where he saw four or five people hurrying toward the gate, led by an elderly man in a yellow-green military uniform with gray hair. He was the one speaking.

Wang Ye's attention was drawn to the knot tied on the left sleeve of his clothes, indicating that he had only one arm!

"Forget it, let's go inside and talk!"

Seeing this scene, Liang Jinsong sighed and said, "Because the military-to-civilian contract has not been signed yet, the Red Star Machinery Factory still belongs to the military factory. So, Li Gang, belonging to the local industrial bureau, cannot enter without permission. As he parked his car at the gate, waiting for the guard to report, Wang Ye and Liang Jinsong arrived and had their conversation just now."

"Both leaders! Get on the car directly! To the office building!"

Accompanied by the voice of the one-armed old man, Liang Jinsong nodded and waved to signal them to get on the car.

Then everyone got in the car, and the jeep's engine roared into the factory. Looking out the window, Wang Ye could see workers strolling, lounging, or playing around, as well as ragged and thin children.

At the same time, the entire factory seemed to be filled with a sense of history, with a dilapidated and worn-out feeling. Almost all the open spaces had been cultivated into vegetable gardens and fields, with some chickens and ducks clucking and wandering around the factory roads.

The appearance of the car attracted their attention. Some people discussed among themselves, some stopped to watch, and some even followed them, heading towards the central office building of the factory.

Obviously, this was not the situation a normal factory should have.

Wang Ye sighed.