New Employees With an Annual Salary of 1 Trillion Won - Chapter 120

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This chapter was translated by Lunox Team. To support us and help keep this series going, visit our website: LunoxScans.com
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Chapter 120. Black Gold and White Gold (4)

General Manager Kang Dong-ju had no choice but to spend most of his time on airplanes.

Handling headquarters business in the United States and receiving reports on Korea Branch work in Korea.

Today he flew to Saudi Arabia to discuss the accounts receivable issue with Song Sang-yeon, Asia Headquarters Manager.

“Have you confirmed the oil field location?”

“We confirmed it with help from the U.S. military. And we also confirmed through various experts that the oil field’s value exceeds 10 billion dollars.”

“Now we just need to sell it.”

The value of an oil field was never the same as the value of drilling rights.

Even if there was a 10 billion dollar oil field, if no one wanted to drill it, the drilling rights would be worth zero.

“We’re making contact with Saudi Aramco, but they seem a bit hesitant since it’s an oil field within Iraq.”

“Drilling an oil field in a country that waged war against their own nation is indeed a high-risk endeavor.”

“Moreover, while the White House has guaranteed it, the UN sanctions haven’t been resolved yet.”

The UN was strongly sanctioning Iraqi oil fields.

Except for the ‘Oil-for-Food Program’ for purchasing food or medical supplies, they had blocked Iraq from earning even a single penny from selling oil.

Developing an oil field while breaking through such sanctions meant taking on enormous risk.

Even Aramco, Saudi Arabia’s state-owned company, found it burdensome to jump in independently.

“So do you have a solution?”

“There’s an indirect approach. We set up a paper company and develop it as a joint venture with a French oil company. On the surface, the French company takes the lead, which provides justification, and if Aramco buys part of those shares, we can avoid international sanctions.”

In fact, there would be no problem developing the Iraqi oil field.

Since the United States was handling most of the monitoring duties.

Even so, we couldn’t develop it openly, so we had to use indirect methods.

“If we do that, would Aramco buy the shares?”

“They’re showing interest, but they say they’ll start negotiations after the system is completed.”

“We’ll need a bit more time then.”

“Still, it seems we can start negotiations within this month. We’ve already finished discussions with the French oil company.”

Manager Song was a clever individual.

He was just overshadowed by the General Manager and Branch Manager Lee Jung-hoo, but he had sufficient ability to take responsibility for a region.

“Let’s try to somehow sell just the drilling rights and get out.”

“I’ll proceed that way. But I heard that Korea Branch acquired Daehyeon Electronics’ semiconductor division. Is that true?”

“They said they just need to finish the final paperwork with Daehyeon Electronics.”

“Will it be alright?”

Manager Song still had great interest in Korea Branch.

Having been Korea Branch Manager, he knew Korean affairs well, and especially understood Daehyeon Electronics’ internal situation thoroughly.

“The Branch Manager says he’s confident, so we should trust him.”

“I don’t doubt it since it’s a project the Branch Manager is pushing, but I’m worried the Korean government might cancel the contract over issues like technology leakage.”

Manager Song had directly experienced the IMF crisis situation.

Companies were split up according to government will, and unwanted big deals were made.

So he thought the semiconductor division could also be split up or taken away by the Korean government like that.

“Surely the Korean government wouldn’t do that? They’re desperate to attract foreign currency, so if they did such things, who would want to invest?”

“Couldn’t the semiconductor industry be different? It’s a national foundation industry, and even if they don’t steal it, if they apply pressure, it’s hard to endure.”

“It would indeed become difficult if the Blue House applied indirect pressure.”

The General Manager answered with a smile.

Seeing this, Manager Song spoke with an even more worried voice.

“Wouldn’t it be better to reorganize and sell the semiconductor business as quickly as possible?”

“We can’t arbitrarily liquidate a business the Branch Manager wants. And don’t worry about that. The Korean government absolutely won’t be able to come at us forcefully.”

“Why is that?”

In South Korea, the Korean government’s power was formidable.

No matter how large a corporation was, it couldn’t go against the Blue House’s will.

But Tiger Fund had backing even greater than the Korean government.

“Because the U.S. government will step in. If it won’t happen, but if the Korean government comes at us forcefully, the White House will step in for us.”

“Wouldn’t the justification be insufficient?”

“I don’t know about other industries, but the United States holds many core patents and equipment technologies in the semiconductor industry. The semiconductor industry cannot continue without U.S. permission. Just like what happened to Japan.”

“Are you referring to the Plaza Accord and the subsequent U.S. trade pressure?”

Japan was a semiconductor powerhouse.

But due to U.S. pressure including the Plaza Accord, their semiconductor industry declined.

This was because the United States held absolute authority when it came to semiconductors.

“That’s right. Just as the United States did to Japan, they can pull out the Section 301 card against Korea. If that happens, the Korean government will have no choice but to sit at the negotiation table.”

“Would the White House use even the Section 301 card for us?”

“Isn’t this the kind of card we supported President Bush to obtain? And from the White House’s perspective, there’s valid justification, so there’s no reason they can’t use it.”

The most powerful retaliatory measure in U.S. trade law was Section 301.

The moment unfair trade practices were deemed to exist, the U.S. President could directly order retaliatory tariffs, import restrictions, financial sanctions, etc.

Especially countries with high export dependence on the United States had no choice but to fear Section 301 the most.

“Even if the White House doesn’t actually use the Section 301 card, just showing a slight willingness to do so would create a solid defense barrier.”

“That’s also why we didn’t stop the Branch Manager from acquiring the semiconductor division. Because we’re confident we can protect it.”

The General Manager clearly understood his role.

To prepare a fair stage so that Branch Manager Lee Jung-hoo could run around freely on the playing field.

Just doing that much would bring great profits on its own, so he spared no support.

“Then there’s no need to worry.”

We just need to do our own work well. It doesn’t matter even if the semiconductor business fails. Then Branch Manager Lee will light a fire in his eyes and go out looking for new investment opportunities. Sometimes I even have the wrong thought that I’d rather it failed.”

Now Manager Song felt relieved.

What he should worry about now wasn’t Korea Branch but the Middle East.

He had to find a way to somehow recover the accounts receivable.

***

Daehyeon Group Headquarters.

Chairman Jang Dong-hyeon had invited me here, and I entered the conference room carrying the final acquisition contract for Daehyeon Electronics’ semiconductor division.

“Thank you for your hard work coming such a long way.”

“Not at all. It’s all within Seoul, so what hardship could there be? I’m just grateful that you called me here like this.”

“Thank you for thinking of it that way.”

A few warm words briefly lifted the atmosphere in the meeting hall.

However, the moment the contract was placed on the negotiation table, that warmth disappeared and the air instantly froze cold.

“I truly ask you one last time. If you do sell the semiconductor division, please negotiate with us first.”

“It’s specified in the contract as well. In any case, Daehyeon Group will have priority negotiation rights.”

Chairman Jang Dong-hyeon was still anxious.

To calm that anxiety and simultaneously obtain what I wanted, I threw out a new condition.

“Even though the semiconductor division has been acquired by Tiger Fund, we need to plant the image that it’s still closely connected to Daehyeon Group. That way outsiders won’t dare to covet it.”

“Is there such a method?”

“Tiger Fund signs a sponsorship contract with Daehyeon Unicorns. We’ll bear half the operating costs, and in return expose the uniform and Daehyeon Semiconductor logo. At the same time, if the semiconductor division secures some shares, we can maintain connectivity.”

The professional baseball team operated by Daehyeon Electronics.

Like most professional sports, it was operating at a loss.

And it was also the team my younger brother had joined.

“Are you saying we should jointly operate the baseball team?”

“If Daehyeon Electronics and the semiconductor division jointly operate the baseball team, couldn’t that give the perception that though separated, they’re still one?”

“But the team operating funds cost more than expected.”

“I understand the annual operating cost is roughly 18 billion won. Tiger Fund will support half of that, 9 billion won.”

Of course, it wasn’t free.

Supporting 50% also meant asking for 50% of the shares.

“Are you asking to transfer 50% of the baseball team’s shares to Daehyeon Semiconductor?”

“If Daehyeon Electronics re-acquires the semiconductor division, the baseball team’s shares would return to Daehyeon Electronics as well, so there shouldn’t be any problem, right?”

Chairman Jang Dong-hyeon fell into brief contemplation.

To move his heart, I threw out the decisive words.

“Wouldn’t it be better than receiving support from Daehyeon Automotive?”

“…How do you know about that news?”

“Aren’t funds originally sensitive to information? The rumor that Daehyeon Automotive Group is supporting the baseball team’s operating costs is already known by everyone who needs to know.”

Brothers who had fought fiercely, even staging a war of princes.

So naturally, their relationship couldn’t be good, and receiving operating funds from such brothers was a humiliating matter.

“I want to clarify this part before we proceed. We’re transferring the baseball team’s equity shares to the semiconductor division, not to Tiger Fund. And these shares must never be transferred elsewhere.”

“We’ll specify in the contract that the shares won’t be transferred without Daehyeon Electronics’ permission.”

I could easily accept such conditions.

Daehyeon Group didn’t have the power to protect not only the baseball team but even Daehyeon Electronics itself.

In just a little time, they would have no choice but to sell all the baseball team’s shares, and my purpose was to secure the baseball team’s equity in advance for that moment.

“Understood. Then we’ll transfer 50% of the baseball team’s shares to the semiconductor division.”

“You’ve made a wise decision. As long as the Daehyeon Electronics semiconductor logo is on the baseball team’s uniforms, the public will still think the semiconductor division remains with Daehyeon Electronics.”

“I will definitely come back to reclaim it soon.”

Chairman Jang Dong-hyeon signed the contract with difficulty.

He seemed to feel great guilt about handing over the company his father had left to someone else, but it was an unavoidable choice.

And it was time he got used to it.

The semiconductor division was just the beginning.

The time for selling Daehyeon Construction, which could be called the center of Daehyeon Group, wasn’t far away either.

***

The contract was finalized.

Now officially, Daehyeon Electronics’ semiconductor division and small device production line had been transferred to Tiger Fund.

That said, there weren’t any major changes right away.

Just as before, they continued producing existing semiconductors, and the factory was still churning out Daehyeon Electronics products.

But the time for change wasn’t far off.

Today, Steve Jobs was coming to Korea in person.

“Thank you for the trouble of coming all the way to Korea.”

“I’m here to see the factory that will produce the iPod, so naturally I should come myself. And there’s no reason to hesitate when I can meet Mister Lee too.”

I personally greeted Jobs at the airport.

We didn’t exchange any small talk at all, continuing to discuss only business matters from the car until we arrived at the conference room.

“Can Daehyeon Electronics’ small device production line properly produce the iPod?”

“It’s definitely possible. Tiger Fund plans to invest funds to fill any lacking areas. And I can confidently say that Daehyeon Electronics’ employees possess world-class technical skills.”

I had no intention of persuading Jobs with words alone.

I took out the products that Daehyeon Electronics’ small device factory had produced over the years, one by one.

“Starting with cassette players, portable CD players, mobile phone components, electronic dictionary PDAs – this factory has produced various small devices. While capabilities in design and planning might be lacking, I’m confident that production technology is world-class.”

“It’s certainly attractive conditions. I’ve contacted various factories, but none were satisfactory. Places with technology and facilities already belonged to electronics companies, and places that didn’t had terrible technology and facilities.”

The advantages of Daehyeon Electronics’ small device line were clear.

Being a large corporation’s subsidiary factory, it possessed excellent technology and facilities.

And now that it belonged to Tiger Fund, it could be free from technology leak concerns.

“And we’ve already conducted OEM production with global companies like Sony, Dell, and Panasonic.”

“If Mister Lee guarantees it, I can trust and entrust it to you. But you’re not planning to sign a contract manufacturing agreement and then sell the factory elsewhere, are you?”

“Absolutely not. Rather, we plan to expand the scale. We plan to invest so it can serve as Apple’s Asian regional production base.”

Currently, most of the iPod’s sales volume was concentrated in the North American region.

Sales outlets were limited to the United States and Canada, and in the Asian market, purchases were only possible through resellers.

Therefore, Jobs hadn’t yet properly recognized the potential of the Asian market.

Right now was the perfect opportunity to conclude a contract under more favorable conditions.

“An Asian production base isn’t needed right now.”

“I’m saying we should prepare in advance. And I believe the iPod is a product that will work not just in North America but throughout the entire world. That’s why I acquired Daehyeon Electronics’ semiconductor division and small device production line.”

“Mister Lee has more confidence in the iPod than I do.”

It wasn’t that I believed in the iPod.

The products Apple would create in the future.

I could make such decisions because I could see the countless gear structures that hadn’t yet been implemented.

“I would be grateful if you’d accept this as sincerity in wanting to become Apple’s true partner.”

“Making Korea an Asian hub is attractive. Nexpin, Rollbook, and even Mister Lee are all in Korea.”

“If Tiger Fund takes on the production base role as well, it will become a much closer relationship than now.”

“Tiger Fund is already a major shareholder of Apple. Even just a formal request would pass through the board of directors. But when you’ve prepared this thoroughly, how could I refuse?”

Contract manufacturing was merely bait.

The real battleground was semiconductors, and now it was time to bring up that topic.

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This chapter was translated by Lunox Team. To support us and help keep this series going, visit our website: LunoxScans.com
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