Make sure you know these words before reading the dialogues
1) limited liability company - a type of company where, if the company fails, the shareholders can’t lose more than the amount of money they have invested; 2) security - property promised to a lender in case the borrower can’t repay borrowed; 3) share capital - money to start or run a company put up by the owners of the company, also called ‘equity capital’ (compare with ‘loan capital’ = borrowed capital); 4) to find your feet - to become used to a new situation.
Episode 5
PROBLEMS OF EXPANSION
S c e n e o n e
Paul came back from Industria three weeks ago. Eve Sorrel, the import agent’s representative, arrived in Zana with good news. Bill Cornell has placed an order for 100 bikes, delivery in two months with the possibility of regular orders after that. Paul and Jack have shown Eve around Jayal Motors. At the moment they are introducing her to Tom Jayal.
Tom: Well, Ms. Sorrel, what do you think of our little company?
Eve: I am very impressed. I congratulate you. For a small firm, it has achieved a lot.
Tom: Yes, thank you.
Eve:... however, you’ll have to expand the assembly plant and increase your labour force to meet the export and domestic demand.
Tom: Expand the assembly plant?
Eve: Definitely. And you must have a telex facility.
Tom: What?
Eve: Look, Mr. Jayal. Speedy communications are absolutely essential between you, your agents, your suppliers and your buyers, like Bill Cornell, for instance.
Tom: But all this costs money, a lot of money. We have to borrow from the bank. My family have already put all they have into Jayal Motors. If anything goes wrong, we’ll lose all we have.
Paul: Tom, listen. I know it’s a risk. Our ratio of borrowing to share capital is going to rise quite sharply. But if we don’t expand we shall be bought out sooner or later. We have to keep up with the times, Tom.
Jack:You know,Paul is right. I design the bikes. I know the problems. On our present system we can’t meet a significant increase in demand from the domestic market, never mind the export market. We are not fast enough... and we haven’t got the equipment. On the other hand, the big companies have. So, if we can’t meet orders, our clients will turn to them.
Tom: Yes, Jack, I see that makes sense.
Eve: Mr. Jayal, there is a risk in moving into exports, but to minimize that risk, why don’t you make Jayal Motors a limited company? Instead of a private one.
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Tom:(laughs) What’s the difference?
Paul: Well, you see, Tom, if the company went bust, the family and Jack of course, we own 90 per cent of the firm, would lose only what we have invested in the company, not our houses and personal savings and property.
Tom: Yes, I see now. A very sensible precaution.
Eve: Paul, who owns the remaining 10 percent?
Paul: Oh, that’s the bank. Though I suspect Kamal will want to increase the bank’s stake in the firm as a security for the loans they are prepared to grant.
Tom: Well, we can discuss all this at the board meeting this afternoon.
Ex. 1. Answer the question: «What internal changes in the company are suggested in this episode?» Begin your answer with the words: Jayal Motorsshould ... (must, are to, have to).
1. ...установить телефакс для улучшения связи с агентами, поставщиками, оптовиками и транспортными компаниями. 2. ...расширить завод для того, чтобы удовлетворить возросший спрос внутреннего и внешнего рынка. 3. ... закупить более сложное оборудования для того, чтобы ускорить (to speed up) производство мопедов. 4. ... обучить персонал работать на новом оборудовании. 5. ... нанять больше рабочих. 6. ... увеличить оплату труда рабочих. 7. ... взять ссуду, чтобы покрыть (to cover) расходы, связанные с расширением компании. 8. ... превратить ( to turn) Jayal Motors в компанию с ограниченной ответственностью, чтобы защитить инвесторов.
Ex. 2. Complete the following sentences.
1. Bill Cornell has placed an order ... . 2. Eve Sorrel is very impressed because ... . 3. To meet export and domestic demand Jayal Motors ... ..4. Telex facility is necessary because ... . 5. Tom Jayal has already put all he has ... . 6. If the company have bust, the family and Jack ... . 7. It is necessary to turn Jayal Motors into a limited liability company because ... . 8. The bank will lend Jayal Motors the money they need to expand but ... .
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S c e n e t w o
Tom and Jack are talking in Paul’s office before going to speak to the workers who are worried about the prospective expansion of the assembly plant.
Paul:Well, Jack, the board meeting was a great success.
Jack: Yes, Paul, even Tom seemed enthusiastic to get started.
Paul:And Bill Cornell’s order arrived today in writing, so that’s definite.
Jack: But, Paul, the workers are a bit unsettled about suddenly having this order placed on them without being warned first. They want to know what this expansion will mean.
Paul:They are right, Jack. How stupid of us not to inform them of developments. You know, without their cooperation, we won’t make it. We can arrange a meeting with them tonight.
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Paul:Ladies and gentlemen! I shan’t take much of your time, thank you. As you know, Jayal Motors had decided to move into the export business. I didn’t tell you anything before that because we had to investigate the market first. Then, I went to Industria to see if I could get us an export market. Two days ago we obtained our first export order: 100 bikes, delivery in two months, with the strong possibility of regular supply. You all know the situation on the home market. We are a small company. The big companies of Dabu are moving into the provinces and putting small firms like us out of business. We have to expand and we can’t afford to lose this chance. We can’t afford to make any mistakes.
1st worker: That’s all very well, but we haven’t got the men or the machines to produce that number of bikes on a regular basis.
Paul:Yes, gentlemen, I agree entirely with what you are talking about. Now, Jack will start immediately to recruit more workers. We are bringing in new machines to speed up the production. A number of the more experienced of you will be selected to take training in operating this new equipment which is a bit more sophisticated than our present machinery. These men in turn will train the others.
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2nd worker: Yes, but what’s in it for us? What do we get out of it?
3rd worker: The firm get the profit while we work harder and for the same pay.
Paul:If you have listened carefully, you’ll see that you won’t be working harder for the same pay. With new recruitment you will work the same number of hours as you do now. The only change is that we’ll need to institute a shift system... but there’ll be a 15% rise in basic wage rates. And a bonus for meeting production targets, plus overtime at double the basic rate. The details of this proposals are on the sheets that Jack is passing around... Well, Jack, I have got to go now and discuss loan arrangements with Kamal. Now, can I leave you to handle things here?
Jack: Sure, don’t worry.
Paul:Well, I’ll try and delay any detailed discussion on the matter with Kamal until we’ve had time to find our feet.
Ex. 1. Agree or disagree with the following statements and add something to develop the situation. Use the introductory phrases:
It goes without saying . You are partly right. In fact... Far from that. In fact ...
1. Tom is still opposed to exporting. 2. Bill Cornell has placed a firm order for bikes. 3. Jayal Motors need cooperation of their workers. 4. Jack is going to start hiring more workers immediately. 5. Jayal Motors are going to install more sophisticated equipment. 6. Some of the workers are already trained to operate the new equipment. 7. The men are worried that they will have to work harder for the same pay. 8. Under the new system the men will work the same number of hours but the factory will be in operation all the time. 9. All the workers will get a pay rise and overtime will be paid at double the basic rate. 10. Only skilled men will get bonuses every day.
Ex. 2. Match two halves of the sentence in order to answer the following question: What changes in pay and working conditions will there be for the workers at Jayal Motors?
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1. The men will work the same number a) ... a shift system.
of hours because ...
2. There will be ... b) ... will train the other men.
3. The more experienced workers will c) ... if they meet production targets.
be trained ...
4. Then these qualified workers ... d) ... for double the basic rate of pay.
5. Everyone will receive ... e) ... to use the new sophisticated
6. Workers will receive bonuses... equipment.
7. The men can work overtime... f) ... more workers will be recruited.
g) ... a 15% pay rise.
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