Capitalists were all driven by profit!—Das Kapital
Karl the butler was highly capable, and the results were encouraging. The owners of eight factories were willing to sell.
No one wanted to run a business that didn't make money! In highly industrialized Austria, flour mills had become a sunset industry. Brutal competition left no hope of making a profit!
Ferdinand still left the negotiations to Karl. The old butler's talent for this sort of thing put him to shame. The earlier supermarket purchasing had already proved the point: Ferdinand simply wasn't suited to haggling.
In the end, Ferdinand bought a flour mill called Katwe Porto for eighteen thousand Pound Sterling.
The machinery had all been replaced a year earlier. The mill had more than 180 skilled technicians and over 50 other employees, and at full capacity could produce 2,000 metric tons of flour a day.
Since the machinery had been purchased, Katwe Porto had never operated at full capacity. Its workforce had also been cut from more than 500 at its peak to its current size.
Even so, Katwe Porto was barely holding on, teetering between losses and profits.
Ferdinand was quite pleased with the acquisition. A new owner called for a new look, so he changed Katwe Porto's name.
"Shineway Food Development Group" was the flour mill's new, highfalutin name, heralding a fresh start. Well, actually, Ferdinand had just made it up for a laugh. He planned to rip off every brand he knew in the future.
Ferdinand kept the former factory manager, Welian Schubert. In fiercely competitive Vienna, the fact that the flour mill had managed to break even was proof enough of his ability.
In fact, the former Katwe Porto had been running quite well. It was well managed from top to bottom, and costs had been cut to a minimum.
But when it came to sales, things were a complete mess. The mill had no brand and no major wholesalers, and its products were sold mainly across the vast countryside.
There was no helping it. As a latecomer, the city market had already been carved up. The fact that the mill had managed to break into the rural market showed that its owner had strategic vision, but he was far ahead of his time. The countryside in this era was dirt poor. Trying to surround the cities from the countryside was truly a pipe dream!
But now that Ferdinand was in charge, none of that was a problem. Of course, supermarket sales would be limited in the short term, so the rural market couldn't be abandoned just yet!
As the owner, Ferdinand went to the factory in person to reassure the employees. He publicly promised that wages would never be paid late, then took a look around the factory.
When he finally saw the blackened bread, pity stirred in him. He announced that the existing meal allowance would be raised by twenty percent, and immediately won the workers' support.
He sent in managers, and with the workers' cooperation, the factory got back to work after a short adjustment period.
To improve production efficiency and spur the workers on, Ferdinand proposed an incentive plan to Welian.
Welian quickly drew up a bonus scheme suited to the factory's actual circumstances and submitted it to him.
Ferdinand was very pleased with Welian's approach. As the boss, he could afford to be generous to the workers, but he expected exactly the opposite from his managers.
Like many bosses, only he could play the good guy and win people over. His managers, on the other hand, had to play the bad guys and cut costs for him.
Under Welian's plan, if a worker's average monthly output increased from its current level, or the overall quality improved, their work team would receive a sack of flour for every one percent increase in output or quality.
The measure brought plenty of benefits without much cost. The flour was made in the factory, so it cost little, and the workers could take it home to eat. It had the same effect as handing out cash bonuses.
Ferdinand also realized that Welian had a basic conscience. Without compromising his own interests, he had done what he could to improve things for the workers, which pleased Ferdinand even more.
"Mr. Welian, you've put together a fine plan. The workers need incentives. Here's what I'd like you to do: find out how many family members each factory employee has. From now on, they can buy the corresponding amount of staple food from the factory at cost." Ferdinand threw out another scheme to win people over.
"Of course, Your Highness! I'll take care of it right away!" Welian replied excitedly.
By the time flour reached retail, its price had risen by at least thirty percent. And since flour was a staple food in Europe, this would greatly reduce the workers' living expenses—equivalent to a twenty or thirty percent raise.
Ferdinand had come up with what he considered the best way to improve the workers' living conditions under the circumstances, without harming his own interests.
Ferdinand's strategy proved highly effective. As his businesses continued to expand, the workers under him received more and more benefits.
Later, when the labor movement was flourishing, his factories were always among the most stable. The unions had almost no influence there!
Time flew by, and the flour mill soon got back on track. Production steadily rose, and quality continued to improve. Once things finally leveled off, total output had increased by nearly thirty percent, and top-grade flour had risen by eleven percent.
All he had paid for it was a few hundred extra sacks of flour a month. On average, each worker received two or three sacks.
Welian was quite generous when calculating the bonuses and gave the workers pretty much the full amount. But when it came time to hand out the rewards, he shamelessly switched them to smaller bags. Since they hadn't specified the bag size, the workers had no grounds to complain!
These sizes had been developed specifically for supermarket sales. There were large 50 kg bags, medium 20 kg bags, small 10 kg bags, and even tiny 5 kg bags, as well as miniature 1 kg packages. Naturally, the smaller the package, the higher the price per unit.
Welian did at least have a bit of a heart. He didn't switch to the smallest packages, or the workers would truly have been left in tears. The flour they received now came in 10 kg bags. Two or three bags were enough to feed one person, so the workers happily carried them away.
Ferdinand feared that the books might get muddled later, so he separated the finances of the factory and the supermarket early on. Even the supermarket had to pay for its purchases, settled at market rates.
With the supermarket as an additional sales channel, the flour mill soon turned a profit. It made three hundred Pound Sterling in its first month—not as much as a single supermarket, but still.
Ferdinand was quite satisfied. It was a good start. The factory was only running at one-third capacity, and many products were being sold in the countryside for almost no profit. If everything could be sold directly by the factory, there was still plenty of room for its profits to grow.
Ferdinand came up with one of the most common tricks used by merchants in later generations. With absolutely no scruples, he switched to different bags and came up with seven or eight brands for customers to choose from. Just like the unscrupulous merchants of the future, he sold the same flour at different prices—and made quite a handsome profit.
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