The Magician’s Memorial - Chapter 293



Only Noblemtl

293. The power of unity (2)

The war of words continued for a while.

Opinions were bound to be divided because the Obama cabinet appointed many politicians from the previous administration.

There was only one person who could resolve this situation, except President Obama.

“I think we must accept change. Why did the automobile industry, the pride of America, collapse? Japanese and Korean automobile companies accepted changes such as introducing the latest equipment for price competitiveness, but the United States did not. Job Bank “We need to fix the system and union-related systems so that we don’t suffer this kind of humiliation in the future.”

The conference room became quiet.

The early days of inauguration, when the president’s power is strongest.

At a time like this, there were not many people who would disagree with the president’s remarks.

“I will convey the White House’s message to the National Auto Workers. Since the majority of the public agrees that the Big Three auto companies need to find ways to cut costs, the Auto Workers will also accept this.”

“Chairman Kim, how do you like it?”

I climbed a big mountain.

Job bank system that pays 95% of annual salary to laid-off workers.

However, the management difficulties of the Big 3 automobile companies were not solely due to the job bank system.

“I understand that there are approximately 1,600 people who benefit from the job bank system at GM. However, just because the job bank system is improved, it does not mean that the management difficulties of the Big 3 auto companies will be overcome.”

“The management of the Big 3 automobile companies decided to come up with their own cost reduction plan. A different management policy will be created from the current one.”

“If you promise restructuring, factory relocation, and debt relief, we will positively consider acquiring one of the Big Three auto companies.”

Were my remarks too strong?

Repulsive remarks erupted from everywhere.

[Would you like to consider it positively? Even if I ask you to sell it, it’s too much to say when it’s not enough.]

[Even if you don’t sell it to Taewoo Group, there will definitely be a way to survive!]

[Even considering public opinion, it should not be sold to Taewoo Group. This is an issue that could greatly affect the approval rating.]

These were people who had not yet fully grasped the seriousness of the situation.

There was no need for me to persuade them. Time will tell anyway.

“You’re saying you have no intention of selling. Then why did you call me here?”

“Everyone, please calm down. It’s not that we have no intention to sell. However, there are many problems, so we want to solve them one by one and find the optimal solution.”

[If the big three auto companies come up with cost-saving measures, they can survive again without the help of foreign companies!]

[I agree that change is needed, but it can be easily resolved within the United States.]

It comes out like this, right?

Then I have no choice but to move in earnest.

The meeting ended in a sluggish state.

I left the White House without looking back and returned to the hotel.

As soon as I got back to the hotel, I drank water first.

As the cool water flowed down my esophagus, I felt relieved.

“Mr. President, are things not going well at the White House?”

“The big three auto companies still think they can survive without outside help. We have to show them that’s not the case.”

“What do you mean?”

“How many bonds from the big three auto companies do we have?”

“The bonds held by SAVE Investment Company and fintech banks are about $10 billion.”

It was a larger amount than expected.

We certainly made real estate-related investments such as subprime mortgages, but there was a reason we held automobile company bonds.

“This is what happened when I entered the real estate market without selling a car.”

“These were the Big 3 auto companies that not only expanded into the auto loan market but also the real estate loan market.”

“Use creditors to put pressure on the big three auto companies. Play with the media as well.”

“Is that okay? If we push hard enough, one or more of the big three car companies might go bankrupt.”

“That’s what I’m saying. Wouldn’t the political world take it seriously if we go bankrupt?”

The plan was to end it with the third meeting.

And the timing of the third meeting would be right after one of the Big Three automobile companies filed for bankruptcy.

That way you won’t talk nonsense anymore.

* * *

Before, I was subjected to media play every day.

But now the turn has come to us, and on the contrary, we have started to play strongly in the press.

“The stock prices of the big three companies have fallen a lot.”

“The stock price rebounded due to the news that it might be sold to Taewoo Group, but the stock price is falling rapidly after the news that Taew Group canceled its intention to sell.”

“With creditors also moving, the stock price will fall even faster.”

Last year, GM’s stock price was only $13.

But now the stock price was falling below $5.

This was because no one wanted to buy GM stock because there was no good news and only bad news continued to emerge.

“There is a possibility that it will fall below $1. It could literally become a penny stock.”

“If the stock price falls by cents, there will be no answer other than filing for bankruptcy.”

“The securities industry is already predicting that GM will go bankrupt by more than 80%. Since public opinion is not favorable, it seems difficult for the government to actively support bailouts.”

Media play that took place for a month.

But it would have happened even if we hadn’t used the media and creditors.

We just advanced the time by a few months. Thanks to this, the White House began to move more quickly.

“Boss! Treasury Secretary Timothy has requested a meeting.”

“Alone with the Minister of Finance? I guess another minister will be attending this time.”

“It is said that full authority has been left to the Minister of Finance. Since GM is said to be filing for bankruptcy soon, the consensus seems to be that we should save it first.”

“It would be great if that happened a long time ago. When did the Minister of Finance ask to meet?”

“I’m asking you to meet me right away. I’m waiting for you near the hotel.”

I’m anxious.

He was the finance minister who moved quickly because if there was a delay, the Big 3 companies could go bankrupt.

“I’m in a hurry. So, where is the meeting place?”

“He said he would come up to the hotel.”

“You want to talk here? Well, it’s not that bad. Ask them to come up.”

David whispered to someone who appeared to be a bodyguard.

Within a few minutes, Minister Timothy came to the hotel suite where we were staying.

“I’m sorry for coming to you so suddenly. It was so urgent that I couldn’t delay.”

“I’m just grateful that you came first. But why did you ask to see me?”

“All discussions with the National Automobile Workers’ Union have been completed. Discussions have been made to allow not only the abolition of the job bank system, but also restructuring and factory relocation.”

How can something change so much in one month?

It was not for nothing that President Obama emphasized change in his inauguration speech.

“What were the terms of debt relief?”

“We reached an agreement to exchange debt for 10% of equity. With these terms, wouldn’t it be considered that the risk was minimized?”

“That’s true, but aren’t there still people in the government who oppose the Taewo Group’s acquisition of an American automobile company?”

“The president solved that problem. He said that it would be difficult to overcome the current crisis without international cooperation, and everyone agreed.”

It was something that could be easily solved like this.

It was just a waste of time because of ministers giving negative opinions for no reason.

“Hmm, under those conditions, I will positively consider it.”

“Can I take this to mean that you will acquire one of the big three automobile companies?”

“You can think so.”

“Then can you tell me where you plan to take over? Only then can we materialize the government’s plans in the future.”

“Where do you recommend, Mr. Finance Minister?”

“In my personal opinion, I would like you to take over GM.”

It was as expected.

They might want to hand over the company with the highest debt to us.

In the case of Ford, the debt ratio was not that high, and in the case of Chrysler, the debt was not so large that the U.S. government could easily handle it.

“Hmm, you’re recommending the most difficult place.”

“If the President helps with this issue, he promised to accommodate Chairman Kim Min-jae as much as possible in the future.”

GM’s share of the U.S. industry was by no means small.

Some even analyzed that if GM goes bankrupt, total U.S. production will drop by 4%.

So the White House had to somehow save GM.

“Hmm, it is possible for the Taewo Group to acquire GM. But wouldn’t the problem be after the acquisition? There will be many things that will require the support of the U.S. government and the help of the political world.”

“We can help as much as possible without affecting public opinion. However, since Taewo Group is a Korean group, public opinion may not be very positive.”

“Public opinion cannot be positive when a Korean company acquires an American company. But if we solve that problem, can you actively help?”

The Minister of Finance shook his head.

It was a gesture made because my words about resolving public opinion were difficult to accept.

“How are you trying to persuade public opinion?”

“It is difficult to reveal that right now, but the response will be better than the minister thinks.”

“If you do that, I can promise you that we will mobilize not only the Treasury Department but also the U.S. government and political circles to help you. But it will not be an easy task.”

Everything was relative.

What may be difficult for someone may be easy for me.

“You don’t have to worry about that. I think we need to discuss the GM acquisition process before that.”

“The White House will directly assist in the transition process. I can promise you that the moment the acquisition agreement is finalized, we will let the current executives go without receiving a single penny of severance pay.”

“Isn’t that natural? The public will not tolerate the person responsible for management difficulties receiving a large amount of severance pay. I would like to point out something else.”

“Which part are you talking about?”

“I think extreme measures are needed to justify the sale of GM.”

Extreme measures.

From the finance minister’s perspective, it may have been a word he didn’t want to hear.

And while what I was about to do may have been a process the White House hated, there was one step left that was absolutely necessary to make the transition process smooth.

“What action do you need?”

“We will first make GM bankrupt and then Taewoo Group will take over. I hope you will encourage GM to file for Chapter 11 within this month.”

Chapter 11.

In Korea, it was a similar concept to court receivership, and simply put, it meant revival after bankruptcy.

“Are you trying to reduce acquisition costs?”

“Aren’t we bound to file for bankruptcy if we don’t announce our intention to acquire it anyway? Of course, we will have to acquire it at the price just before bankruptcy.”

“······It is a condition that places quite a burden on the White House. However, if you really take over GM, you can bear that burden. However, if Taewoo Group does not take over GM even after filing for bankruptcy, the White House will take responsibility. I have no choice but to ask, both formally and informally.”

This is what the Finance Minister meant.

I will grant any conditions I ask for.

Instead, unconditionally take over GM. If you do not do so, retaliatory measures will be taken.

“I will take over GM. I promise you that.”

I finally made my intentions clear.

The moment this is said, GM must be acquired unconditionally.

But I spoke out without hesitation.

There was no need to hesitate because I had been planning the current situation for several years.