The Chaebol Who Flies From Space - Chapter 105



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The Tycoon Who Flies Into Space Episode 105

Episode 105. Toad NASDAQ listing

The number of incoming checks has also increased.

There was no room for restraint as Toad was a company that monopolized the Korean soju market, but the situation was different for WD Automobile.

Hyundai Motor Company was the leader in the Korean automobile market.

He began to control the parts companies under his control and began to keep a check on WD Automobiles.

“The most painful thing is that we can no longer do business with Hwadong Precision. They threatened to stop ordering parts if we did business with them.”

“Hwadong Precision is a company that manufactures important transmission parts. They are developing their own parts, so this is a huge blow.”

“I received a phone call explaining that they had no choice but to stop trading. There is no immediate problem with the factory operation, but they are short on parts and will not be able to continue for more than two months.”

So what?

“That doesn’t mean the fact that the deal has been cut off has disappeared. For now, we need to find a company that makes similar products and import them.”

“The unit price is going up tremendously.”

If you add distribution costs to the parts import price, the price will double.

“What can we do? And find a parts factory that makes similar products to those made by Hwadong Precision. It doesn’t matter if the production volume is small. We need to quickly build a parts factory and stabilize the supply chain. And contact WD Engine and tell them that we will stop supplying engines to Hyundai Heavy Industries.”

President Cho Young-soo’s eyes widened at my words.

“Modern Joseon and automobile companies have different major shareholders.”

“So? To my eyes, they all look equally modern.”

If you get hit once with a fist, you have to hit back twice or three times.

“We will strengthen financial support for remaining parts suppliers.”

If you had trusted me, I should have repaid your trust.

* * *

The factory, whose contract to supply parts to Hyundai Motors was cut off, lost its vitality. After refusing Hyundai Motors’ offer (written as such, but actually an order) to stop supplying parts to WD Motors, they made excuses for this and that, and then unilaterally ended the remaining contract period for supplying parts.

Although they were fed up with contracts being unilaterally dragged by large corporations, the volume going into WD automobiles was too small compared to that of modern automobiles.

Park Sang-young, the president of Il-Young Precision, looked around the factory with the lights out and work decreasing, feeling his heart burning.

In the past, it was difficult to meet supply even if we worked overtime.

I was so upset that I started smoking again after quitting for a while.

Ilyoung Precision, which produces brake-related parts, has been a parts supplier with deep ties to Hyundai Motor Company since the company was first established. In the beginning, the volume of parts increased and profits were good, so the factory was running with great enthusiasm.

But as time passed, the demand for cost reduction in modern cars became stronger.

After being squeezed several times, I got so discouraged that I thought about closing down the factory, but I forced myself to keep the business going for the sake of my employees.

“Eight, should I ask you to accept it again right now?”

“What are you asking for? I think they’ll accept it. Since the boss said he won’t do it, I heard he created a parts company with a connection to the owner.”

I was so startled by the words I heard in the darkness that I dropped the cigarette I was smoking.

“Who’s there!”

“I knew this would happen, so I came.”

The person who appeared under the bright lights was Manager Lee, the parts manager at WD Automobile.

“Who am I? Go around making some noise.”

President Park Sang-young grumbled, trying to calm his surprised heart.

“It’s been a while since you heard about it. I just didn’t hear it because I was thinking about it by myself.”

“Whew, I’m wondering if I did something wrong. Look, the lights are out here. This used to be a factory that was running smoothly.”

As the saying goes, the entire factory was dark except for the office.

“What are you doing, working overtime and extra shifts? When you have nothing left over.”

“That’s true, but there’s still money left over for the employees to take.”

“Oh my, you only talk like Buddha.”

“But what happened at this hour?”

“I thought you might be feeling depressed and worried, so I came running here.”

“Anything good?”

Although the two were in a superior-subordinate relationship as a parts company and an automobile company, during the Ssangyong Motors days, Manager Lee was also pushed into a corner. He became close to Manager Lee on a personal level by buying him drinks when he was worried about his future.

“This time, an order has been given to provide financial support to the remaining parts manufacturers.”

“Then what are you going to do? The order quantity is small.”

“We are going to order more than the quantity we were taking from Hyundai Motors.”

“Huh? What does that mean?”

“They said a new car model will be released in the second half of the year, so it looks like they’re stockpiling a ton of parts in preparation for that. The purchasing department is going crazy.”

“how much?”

“It’s a secret, but we’ve been given instructions to stockpile 1.2 million units.”

“Huh! Can you produce like that?”

“They’re building a factory in Mokpo, too. They’re also building a factory in the US, and it looks like the HR department is having a hard time finding people to send to work.”

“why?”

“It’s America. America! My wife also insisted that I go this time if I could. She kept nagging me to think about the kids. No, how can I get to the American branch? Anyway, it seems like there’s a flood of applicants for the American branch.”

“The company is doing well now that WD has acquired it.”

“They say it’s a lie. When I heard that WD was taking over the company, my wife and I hugged and cried.”

“Because you like it?”

“Of course, it’s the richest company in Korea. They say they only have money, but they acquired the company and raised our salaries. The employees who were dispatched said that the group had enough cash to buy dozens more companies the size of ours, so I thought it was a lie.”

“Oh, of course it’s a company that owns Seohae Oil, which makes money by digging the ground. I heard that they make a lot of money by selling soju too?

“I couldn’t believe it because I worked for so many beggar companies. But this time, they bought Bush beer in the US. The acquisition cost alone was 40 billion dollars. Can you imagine how much that was?”

“40 billion dollars is how much in Korean currency? Around 50 trillion? It’s really scary just hearing it.”

“I read in the newspaper that it’s the largest corporate takeover since Dangun. There’s so much noise about a Korean company taking over the top beer company in the United States.”

“Is there any Korean who doesn’t know that? Did he come all the way here at this hour to brag about his company?”

“Oh, right! I have to explain why I came here. The subsidy allocated to your company is 30 billion won. It’s a subsidy with an annual interest rate of 2%. It’s money that will be used to expand the factory and build a parts factory overseas.”

“Huh, you supported me before too. That’s why I finally made up my mind to cut off my Hyundai car deal, and now you’re giving me support money again?”

“If you’re thinking of building a parts factory in the US, don’t worry, our company will help you. Just apply, hyung. I’ll give you a lot of support.”

“Ha, easier said than done. How can I set up a parts factory in America? I don’t speak a word of English.”

“What does that matter? Our company created a separate department to support the parts factory.”

“Huh, support department?”

“Yes, so that people like you don’t have to worry, this is a department that will help with all administrative procedures, starting with land, when building a factory in the US.”

I heard it was really good support.

“Why are you doing this? What are you going to do with a parts company like Hakkobang?”

“The chairman said that both the general contractor and the subcontractor should become rich together.”

“What kind of tycoon would say something like that?”

“That’s why I looked into it because I thought it was strange, and all the original employees who worked under the chairman have become rich. The chairman believes that we should all eat well and live well together.”

“… … Even if you make up words, you’re still the best.”

“That’s why we’re raising the salaries of our employees. Do you know that WD employees have the highest salaries in Korea?”

“I know, because you bragged about it until your mouth was dry.”

“Don’t worry, the dark factory will be back to normal soon.”

“Will the new car really sell well? I can’t sleep at night.”

“I expected you to be this depressed, hyung. Should I give you some helpful information? I heard something from a staff member dispatched from Engine.”

“What is that?”

“Our chairman designs all the engines that are made in the engine room. I heard he designed an automobile engine this time. Do you know how well ship engines sell? Automobile engines should have similar performance.”

It was a sound that tickled my ears just by hearing it.

If the business partner does well, the company that supplies the parts also does well.

Manager Lee snickered as he watched President Park swallow his saliva.

“So, don’t worry about the factory not doing well right now, and think about how much you’ll earn in the future. Let’s go have a drink together instead of just smoking cigarettes.”

“Are you alive?”

“Oh my, the subcontractor’s president is buying alcohol for the general contractor’s employees.”

“You son of a bitch! Okay, I’ll buy the alcohol. I’ll buy it.”

* * *

I visited New York to coincide with the NASDAQ listing of Toad F&B.

As the public offering with a competition rate of 4 to 1 was successfully concluded, expectations for a rise in stock price after listing grew.

The simple event ended in a much more friendly market atmosphere as news broke that Bush Beer would be acquired with public funds.

As soon as the bell rang, trading of the toad stocks, which received the stock name DKB, began.

The stock price, which started at $42, quickly surpassed $50 as it ate up the orders that came in. The stock price, which had been moving around $55 all day, ended at $48 as profit-taking orders came in at the end.

The officials who had been watching the transaction with great tension finally relaxed.

Stanley O’Neill, the president of Merrill Lynch who handled the IPO, attended the Nasdaq listing event and watched the trading with me in the VIP room.

Stanley O’Neill, the first black CEO and financial expert at Merrill Lynch, has made great efforts to normalize the management of Merrill Lynch, which was in trouble since his inauguration. Last year alone, he declared emergency management, laid off 23,000 employees, 30% of the total workforce, and announced strengthening the IPO and asset management divisions.

As Merrill Lynch took charge of the IPO of a large company as big as a toad, the company’s internal status, which had been unstable due to large-scale layoffs, was also improving significantly. In addition, Merrill Lynch was able to build a solid foundation by taking charge of the M&A of Bush Beer.

WD Group has many profitable companies under its umbrella, making it very attractive to investment banks.

It was very unusual for a CEO to show up at a company’s IPO. It was a sign that he had something to say in a private meeting.

After the show, the two had a drink and chatted.

“Today was a really tough day. I was nervous, but I’m glad the stock went up.”

“It was a very successful IPO. The stock price of Toad will continue to rise in the future. I would appreciate it if you could give us another chance. Aren’t there many good companies in WD that haven’t been listed yet?”

There was no reason not to do business. There was a separate reason why I insisted on Merrill Lynch as my trading partner over other investment banks.

“I heard there have been a lot of complaints from employees within Merrill Lynch.”

O’Neill sighed at my words.

“We had a huge deficit and laid off 30% of our staff last year alone. There was a lot of internal resistance to reducing our traditionally strong brokerage business.”

“In the end, didn’t you succeed in turning a profit? I think it was a successful weight loss management.”

“The problem is the stock price. The stock price is stuck at the bottom, so there is a lot of pressure on the board.”

“Merrill Lynch’s stock price is $35 these days. Didn’t it go down to $20 and then go up a lot?”

“It’s still nowhere near the highs it reached in 2001. It went up to $100 a share and then came back down.”

“What is the stock price level that the board of directors is looking for?”

“They say it should double from what it is now.”

It’s a different feeling when you go to the bathroom and when you come out. After barely reviving a company that was on the verge of bankruptcy with a huge deficit, now there’s a fuss about raising the stock price.