Government owned 'Entity'

I visited a government owned 'entity', for lack of a better word, last week. Entity is the only word I can come up with for a company of well over 50,000 (see the layout above), that houses all its people on site, has stores, hospitals, schools up through MBA programs, no need to ever leave the site. While I am sure working conditions vary widely over the multitude of these industries that exist in China, this location was nice to see. Clearly, planned economies have their efficiency issues, as did this one. However, there was clearly a value placed on the human being here. Work conditions were primitive with regard to buildings and infrastructure, layout, etc., but reasonably well lit inside. Tools were extremely old and locally designed and fabricated, but quite well maintained. Product designs of the assembly components I was reviewing were generations old, but the manual operations used to put them together currently were as efficient as I could imagine.

The product I was reviewing had been assembled in this manner for THIRTY years. If you read Alan Greenspan's book, he discusses at length the differences between planned economies and open markets. One of the big differences is 'creative destruction', where competition in open markets forces reinvestment and increases in efficiencies that just don't happen in planned economies. What an example I was seeing before my eyes. The only reason I had an opportunity to see this was the same reason this company is actually considering changing their process: the markets here are opening up, and even these leviathans of government owned companies are being exposed now to competition.

Is this a good thing? I suppose the increase in efficiency and reduction of waste is good. On the other hand, the absence (in planned economies) of stress and worry over obsolescence or job insecurity can be a great thing. I could see the beginnings of stress in their eyes, and the awareness that they have no idea how to approach this free market thing, though I am sure it won't take long. The requests made of Lanco were largely to patch problems with their process upstream and product design, primarily. Perhaps they can't fix the machining problems upstream, and don't know how to upgrade the part design, but how do you allow them to save face and still be honest with them? They were clearly proud of their operation, as well they should be. Outsourcing is such a foreign concept to them; they had no idea how to greet potential suppliers, how to write spec sheets for what they are looking for, etc. Amazing.

Also amazing to see:
1. Russian influence in the architecture of some of the older buildings. Don't know the whole story there, but I know they were close during the time of this plant build.
2. Come to find out, back 30-50 years ago, this plant was moved (with all its people) from Shanghai as a way to reduce infrastructure problems if a city was destroyed. It was really surprising to my Shanghainese colleagues when we saw some old Shanghai folk (and their offspring!) in the plant, and they found out the story. We were approx 1,000 miles away from Shanghai, and finding a LOT of locals was not expected!
3. The workers work 8-12, go home for 2 hours to have lunch with their families (school gets out then, as well, and remember spouses are all working here), then return from 2-6 to work. I think this changed when the government mandated 8 hr days vs. 12 hrs, but I still asked if I could have a job there. Another perk of a planned economy. :)
4. Look out, world, when lunch comes. The mass of bicycles and motor scooters is not given justice by this picture. People are as eager to get to get to lunch everywhere in the world, it would seem.