Editorial note: the Chinese administrative officers were faced with over one hundred Germany SCHIESS employees of personalities when the huge light loop that Shenyang Machine Tool solely purchased SCHIESS AG gradually fell apart. In the “Chinese spirit”Shenyang Machine Tool raised SCHIESS at last.

　　 Shenyang Machine Tool was successful. Each step of the purchase will become a precious text in the historical course of transnational operations of the enterprises in Shenyang even in China.

　　 From now on three profound news reports will be made in the newspaper to set forth the successful experience of Shenyang Machine Tool in purchasing an overseas enterprise in such three aspects as “walking out”, “stepping in”, and “walking out”.

　　 The 2nd day in the New Year on lunar calendar of Bingxu in Ascherleben in the east of Germany, which is far away, the local government awarded a special prize, An Economic Prize to Shenyang Machine Tool Group to commend the Group that made the production and operation of SCHIESS walk up to the right path quickly and ensured the working positions of local employees after its purchasing SCHIESS. The German media reported the news one after another and it was favorably commended in all circles in Germany.

　　 It affords for thought that Shenyang Machine Tool Group was not anxious to receive the prize.

　　 Speaking of the reason, CHEN Huiren, President of the Group said on Feb. 28, “It's only one year after Shenyang Machine Tool purchased SCHIESS. It is just like a sea spray in the long river of development of SCHIESS with a history of 140 years. It is important that Shenyang Machine Tool is good at ‘night march’and bending down to do skilled work. The purpose of our enterprise is to vigorously develop the national brand and bear the heavy burden for the industry of machine tools in China to develop independently.”

　　 It has come to light that SCHIESS Shenyang Machine Tool Group has had 17 set and 37 million Eurodollar (RMB three hundred and seven million) order forms and realized sales income over 20 million Eurodollars. Its production operations have come back to the highest historical level of SCHIESS; the cultural blending between both parties is successful; technical exchange between both parties has obtained preliminary results.

　　 Purchase: a rational choice to walk up to the world

　　 On Oct. 29, 2004 in 莱比锡 City, Germany that is 8,000 kilometers away from Shenyang, CHEN Huiren and Bob, a liquidator of German 马格德堡 Court signed a legal document to solely purchase the whole assets of previous SCHIESS AG, and the whole assets were handed over.

　　 Thus Shenyang Machine Tool purchased 80,000 square meter plant location, 28,000 square meter workshops, 44 large and middle sized processing equipment and a complete set of product technology in addition to SCHIESS, the top-ranking brand in the industry of machine tools in the world with a history of over 100 years from previous SCHIESS in Ascherleben市, 萨克森.安哈特州, Germany.

　　 Hence it is indicated that Shenyang Machine Tool began its multinational operations. All equipment of SCHIESS, a trump brand of German machine tools began to turn for Shenyang Machine Tool Group from Nov. 1, 2004.

　　 “It was an active, rational, and strategic choice in the whole frame of development for Shenyang Machine Tool to purchase SCHIESS.”revealed by CHEN Huiren. Redundant personnel, debts, and enterprises undertaking the society have been generally regarded as “three mountains” laying heavy on the state-owned enterprises over a long period of time, however the group of leaders of Shenyang Machine Tool Group believes that there is also “the 4th mountain” laying heavy on the state-owned enterprises. It is old concept that has come into being in the long and old system. It is the root cause of illness that restricts development of the state-owned enterprises.

　　 During recent years Shenyang Machine Tool constantly explored internal potentials, taking reform, breakthrough, and innovation as its theme. From 1999 to 2004 its economic scale rapidly increased to RMB 4 billion from less than RMB seven hundred million, and labor capacity per person increased by 20 times.

　　 As a leading enterprise in the industry of mahine tools throughout the country Shenyang Machine Tool Group put forward its strategic developmental objective, “creating globally well-known brand and establishing globally famous company”after the Central Committee made a strategic decision to vigorously develop the old industrial base in Northeast China. For the moment the leaders of the enterprise realized that to increase by previous intension was not enough to “sprint at RMB 15 billion and ascend to the top three of machine tools in the world”by 2010. They had to implement an expanding strategy for extension. For the moment SCHIESS declared bankruptcy during the middle ten days of June 2004 as a result of diversified reasons such as overall economic situation letting down in Europe.

　　 “To purchase SCHIESS has set up a platform that leads us to international competition. We have had the ‘qualification’for access to international market. In our opinion, SCHIESS is worthy the name of ‘Xishi’” introduced by CHEN Huiren. SCHIESS gives priority to manufacturing heavy duty and large machine tools. Its products are mainly applied to such fields of heavy industries as shipping, heavy-duty machinery, and electric equipment. It is one of the well-known brands in the industry of machine tools in the world, which are engaged in manufacturing in the fields. Shenyang Machine Tool just went without the technology and market scopes of SCHIESS, which are also needed for them to walk up to the world.

　　 Undertaking: The employees of SCHIESS would be employed

　　“The reason that we could get victory among numerous domestic and overseas competitive rivals depended on our good faith”revealed by CHEN Huiren.

　　 At the beginning after the purchase the decision-makers of Shenyang Machine Tool realized that multinational purchase was not simple extend of domestic purchase.

　　 SCHIESS did not quite understand the intention of Chinese operators although Shenyang Machine Tool clearly implemented their own internationalized strategy. Thus it is necessary for cooperation to understand each other. Shenyang Machine Tool took active measures and its strategy was to “keep a promise to be trusted by the German employees with good faith.”Shenyang Machine Tool promised to employ 135 employees of previous SCHIESS in the negotiation of the purchase, and actually 140 persons were employed. The staff members are gradually developing into over 200; it was promised to input circulating funds in new SCHIESS, and the funds reached the designated position one day ahead of schedule; it was promised not to be behind in payment for employee's wages, and as a result the wages were fully paid on time. The situation of the time was that previous SCHIESS did not pay wages as a result of bankruptcy. The employees could only collect unemployment insurance according to the Protective Measures for Business Failures in Germany.

　　 Investment: changed SCHIESS

　　 In the negotiation CHEN Huiren once put forward three fundamental principles: it is to make new SCHIESS obtain new development instead of dispose of after purchase to obtain easy gains; it is to be established in local development of the enterprise instead of moving the enterprise to China; it is to operate the enterprise well, depending on the administrators and employees of previous SCHIESS.

　　 How could they let the German employees be trusted? GENG Hongchen, Chinese General Manager of new SCHIESS discovered that people were of different minds in bad working environment as a result of negligence of management before bankruptcy. Therefore he decided to unify the will of the people as a breakthrough. He made a lanternslide of the scenes that were in a complete mess in the workshops, and convened a site meeting among the German managers. They realized that there was a shortage in the factory and decided to stop production to reorganize and solve the problem.

　　 At completion of consolidation on site Shenyang Machine Tool Group decided to add investment to reform the whole company and build previous enterprise into a modern factory.

　　 Then a series of changes took place so that the German employees fully felt that Shenyang Machine Tool Group was determined to strengthen the enterprise there. There was no cafeteria in previous SCHIESS. Some of the German employees brought food and heated it by themselves, and some of them went hungry simply. At present a clean and beautiful dinning hall has been set up so that they can have a meal comfortably; the previous office conditions of designers were poor. They worked in “a small dark room”. The design office is spacious and bright after redecoration and reconstruction. In addition the assembly shop has been fully overhauled, the unit assembly shop is being rebuilt, and the two processing workshops will be rebuilt. An overseas product exhibition center of Shenyang Machine Tool Group with an area of over 4,000 square meters is being built on the plant side.

　　 Honor: The national flag of China appeared in the newspaper of Germany

　　 Market and order are the foundation for an enterprise to exist. Corporate full load operation is a guarantee of employee's firm confidence. The marketing personnel of Shenyang Machine Tool Group and SCHIESS did their best and got possession of order forms within the most short time respectively from the markets of China and Russia.

　　 “Keep good faith.” The German employees deeply realized the power of a Chinese old saying. They began to have a preliminary understanding of Chinese operators, of Shenyang Machine Tool, and its business concept. From then on the German employees who were impervious originally greet to Chinese managers when they meet on the way.

　　 At the beginning of last year over 10 German employees carried a national flag of China when local German media gathered news from SCHIESS. Holding the national flag, they highly praised the Chinese enterprise, “Chinese people are very good. They give great support to our operation in all its aspects!”when the reporter took a picture. The next day the national flag of China and the smiling German employees that occupied a large space of the whole page were seen in the local newspaper.