This Is How I Became a Chaebol - Chapter 588



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588: The Age of Expansion of the Side Story (3)

Two weeks later, Czechoslovakia.

Sambok and I flew to the Czech Republic in a hurry ahead of the state visit.

The first impression I got at the airport was an inexplicable sense of Busan. Everyone was excited, but the atmosphere was not entirely hopeful. Not only was the collapse of the Eastern Bloc inevitable, but Czechoslovakia is also expected to split into the Czech Republic and Slovakia next year, so this level of anxiety may be natural.

“Whew, Chansu, are you really going to invest here in the Czech Republic?”

“Why do you think you shouldn’t invest in a communist country?”

The domestic opposition party launched a political offensive every day, claiming that the president was making a lot of investment promises while visiting communist countries.

Politically it’s a tricky situation, but diplomatically it’s a very good situation.

Whenever differences of opinion arise between the two countries, the Korean president can make a sarcastic remark, saying, “We are investing in this despite domestic opposition, so the other side should make concessions!”

“What kind of Czech Republic is a communist country? If you look at the trade that Skoda Heavy Industries has been doing, it’s just capitalism! It’s just that the economic situation here is so bad. It’s a landlocked country, so the location conditions are bad.”

“If the situation was good, would we have had any chance to advance? Germany and England are right next door, and they have already advanced.”

The reason we were able to conquer the Southeast Asian market using Vietnam and Indonesia as a springboard was because we took advantage of opportunities when times were tough.

Rather than making a good octopus out of a bad one, it would be a real hit to develop a bad land into an octopus.

“Wouldn’t Poland be better? It has a population of 40 million, a decent domestic market, and you can go anywhere in Europe by sea or land.”

“No, there are no Skoda cars there. You want me to give up my production facilities with an annual capacity of 300,000 units and 200 sales outlets? I can’t do that.”

“What? You have 200 sales outlets?”

“Not yet, but it will happen soon.”

“What are you talking about? That’s what’s going to happen.”

“Stop worrying and come in. Time’s up.”

“Ugh! It hurts, you punk.”

I hit Sambok’s side, but I felt relieved inside.

If even Sambok is this conservative, the acquisition of Skoda Motors will be a huge hit.

There’s a reason why Volkswagen of the 21st century acquired Skoda.

Moreover, if we confirm this investment, we will be able to obtain the Soviet Union’s advanced fighter jet engines through a backdoor.

***

Czech government building,

“It’s nice to finally meet you, Chairman Woo and President Lee.”

As we entered the building, the Czech Minister of Finance personally came out to greet us.

“Nice to meet you, Minister Lukas.”

“Nice to meet you. I only contacted you by telex, so it’s nice to see you here.”

“Haha, I was wondering who the hell was that guy who was harassing me, but you look like a handsome guy.”

“That’s the first compliment I’ve ever heard. Haha.”

Minister Lukas and Sambok shook hands but kept a close eye on each other. It seemed as if they were trying to gain some sort of upper hand in the negotiations.

Since President Roh’s state visit was just around the corner, most of the negotiations had to be concluded before then, so even such trivial conversations were being said with careful calculation at the working level.

“It seems that the Czech government has decided on a general framework for the scope of investment.”

“First of all, we have agreed to boldly lower our trade barriers. We have agreed to open a KOTRA trade office in Prague and to exchange trade delegations every year. All that remains is the decision of Daesae Group, that is, Chairman Woo.”

At the Korea-China summit, provisional negotiations were completed to sign nine MOUs focusing on cooperation between the two countries in the fields of energy, infrastructure, heavy industry, and R&D.

“It’s not like there are only big business groups in South Korea.”

Even though I knew Minister Lukas’s true intentions, I pretended not to notice.

The goods for which the Czech Republic granted us temporary tariff preferential treatment were automobile parts, computers, engines and pumps, synthetic resins, and other iron and metal products.

Excluding computers, it is like picking on the major groups and saying, please, please enter the Czech Republic!

“Wow, honestly, in Korea, isn’t Daesae Group the best company? I heard that Susung and Kumyang Groups are also competitive in the home appliance sector, but for us, automobiles are our priority. Just build a factory in the Czech Republic. We’ll give you as many benefits as possible.”

Minister Lukas made no secret of the fact that the Czech automotive industry is currently one of the most critical and important.

Not only me and Sambok, but also the major automobile executives know very well how precarious the Czech automobile industry is.

Skoda, a historic Czech automobile company celebrating its 100th anniversary, is on the verge of collapse.

In the automobile industry, where competition is fierce in all areas including technological innovation, design, and cost, it is even more surprising that Skoda has survived so long in the communist bloc.

Skoda Heavy Industries, which was once part of the same group, has rapidly normalized its business while working with our Daesae Heavy Industries, so the Czech government will want to attract us even more.

“Minister Lukas, isn’t it a bit hypocritical to say that and then refuse to allow us to build a finished car factory?”

Sambok-i showed an excited reaction next to him.

“Mr. Lee, please change your perspective. If cheap, top-of-the-line cars come into the Czech Republic, the Czech automobile industry will be destroyed in an instant. Just build a parts factory.”

“Doesn’t that mean they’re going to save Skoda cars by supplying us with cutting-edge parts, and even steal our parts technology?”

Minister Lukas was quite flustered when Sambok, who had been giving strange compliments, suddenly started to speak out.

It was a hit to the core, as the Czech Republic was probably trying to fit our parts into Skoda cars and sell them in the European market as Czech-made cars.

“This, um… didn’t Daesae Automobile already build a parts factory in Indonesia like that?”

“Isn’t that Southeast Asia? It’s a completely different level from the Czech Republic, which was once famous for its automobile industry. How can you compare a newcomer to a veteran?”

Southeast Asia has no choice but to keep up with the technological mainstream of automobiles, but the Czech Republic’s position will change immediately once the factory is normalized.

At some point, Skoda will start producing the parts it receives from us domestically.

Then we’ll be like dogs chasing chickens.

“Ah, you two, stop it. We came here to be partners, not to fight like this.”

I left Sambok and Minister Lukas aside for a moment.

Dude, since you became the CEO, your fighting power has increased a lot!

“… Partner! Then, the Chairman makes the decision!”

Lukasi immediately looked at me with a bright smile.

“Let’s try to find a compromise between the two. I think the best option would be to import Korean parts and assemble them in the Czech Republic using the semi-knockdown (SKD) method.”

Semi-knockdown is a method of manufacturing finished vehicles by importing semi-finished products and assembling them, so it can minimize technology leaks.

“If it is a semi-knockdown method, the general public will enjoy tax exemption benefits, but what benefits will there be for us, the Czech Republic?”

When I suggested a semi-knockdown method, Lukasi did not hide his true colors.

The point was that our technology couldn’t be copied that way.

“The Czech car industry will be normalized. Of course, assuming that we acquire Skoda.”

“Huh? You’re taking over Skoda?”

“Didn’t the Czech government officially announce that privatization is possible if the conditions are met?”

“That’s one way to normalize the factory…”

This would mean that it is nothing more than political candy to appease factory workers.

Skoda Motors is currently a state-owned enterprise.

“Skoda Motors’ management has been adrift for several years. If Daesae takes over, it will be back to normal immediately. There is no need to divert Daesae’s parts to Skoda Motors.”

“That was not my intention… Anyway, if you want to acquire Skoda Motors, I will announce an international tender.”

Minister Lukas immediately smiled, and this time Sambok started poking my side.

That’s crazy, you know.

“The bid is declined.”

Of course, the bid was rejected.

Why are you playing the puppet game of the Czech government?

If there were an international bidding war, time would be broken into time zones, and all sorts of regulations would be put in place, only to end up with money being offered.

“Huh? You’re going to take over a state-owned enterprise, but you’re rejecting the bid? What do you mean?”

“They say it’s an international bid, but if you get involved in politics, it’s obvious that you’ll lose years. It’s better to just give up.”

“Give up? This is the official agenda of the Czech-Korean summit!”

“So, we need a political decision from the Czech government. If you allow us to take over the company through a contract, we will guarantee 100% employment for three years after the takeover.”

“… 100% employment succession!”

It was an innovative proposal that was unimaginable in Europe at that time. Even Sambok, who was standing next to me, couldn’t close his mouth.

‘Chansu, are you crazy!!!’

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Sambok-i was tearing out his own hair as if he would have pulled out my hair if I hadn’t been the chairman.

“I respect the Czech skilled workers. But I would like to see Skoda’s asset valuation reduced by about $40 million. I would like to see the acquisition price reduced.”

“A $40 million cut? Does that make sense?”

“Why doesn’t it make sense? If you cut factory workers, shouldn’t the Czech government pay unemployment benefits? In the end, the burden of the Czech government will be borne by the masses, so wouldn’t it be fair to cut that amount?”

If you buy a company that is on the verge of bankruptcy at a fair price, you are a sucker. Besides, the other party will see that you are in no hurry.

“Whew… That makes sense… Please give me some time. I will discuss it with the relevant departments and then let you know.”

“We don’t have much time, you know?”

“Of course. It shouldn’t go beyond this week.”

In the end, the Czech government will hand over Skoda to me. They are desperate for foreign capital and industrial normalization ahead of independence.

My acquisition of Skoda cars will be the first signal.

‘Chansu! Chansu!!!’

‘Okay, let’s see how they come out.’

The Czech Republic is a country that is expected to become one of the four largest automobile producing countries in Europe.

Now is the only chance to grab the Skoda car with its unrivaled competitiveness.

Even Sambok, who is well-informed of the automobile industry trends, is struggling with this situation.

“Oh! Minister, I have one more suggestion.”

“Oh, what is that?”

“There is no doubt about the production capacity of the existing Skoda car plants, but sales capacity is a different matter.”

“Honestly, yes.”

“So, I would like to create a separate sales corporation. Of course, I would like to create the manpower by borrowing from existing Skoda employees.”

“So you’re saying that the trend is to ask for legal assistance in registering a separate sales corporation?”

“That’s right. We may also increase employment in the future. Our initial goal is to open 200 sales outlets across Europe.”

“2… 200 places! I will actively cooperate!”

“Our SB (Sambok) will take charge of that work, so please communicate actively.”

“Okay, I will do that.”

‘Me… Me?’

‘Yeah, you!’

The atmosphere in the conference room immediately heated up, and minutes were written and signed by all.

Although it was a simple meeting minutes, it was no less than an MOU since it had my and Sambok’s signatures on it.

“Chan-soo, can you help me understand this situation? If Skoda Motors were to be 100% hired, the acquisition price would easily exceed tens of billions of dollars. Didn’t you see the report I submitted?”

As soon as Minister Lukas left the conference room, Sambok folded his arms with a dumbfounded expression and asked.

“I saw it, so I did it this way. Let’s take over the biggest factory first and see how it goes. With that, we should be able to take over about 30% of the total shares. We should reduce the initial burden a bit.”

“First burden? Are you really going to take over Skoda sequentially? A collapsed car factory? The engineers here probably don’t even know what a hybrid car is.”

“You go through the trouble. Those who are technically behind should be reassigned to sales outlets. Naturally, the technical positions should be filled by our people. Isn’t that a win-win situation for both parties?”

“So what did you do with the sales agency?”

“If we fill the key personnel with our own people, we won’t have to worry about technology leaks. Let’s use this as a forward base and attack the European market. The prices are low, and we can import our parts duty-free. You can write it as Made in Czech, but read it as Made in Korea.”

“Is that so? You had it all planned out!”

You punk, the advice to work hard went in one ear and out the other.

“If you want to retrain the employees who were in the communist bloc, and in state-owned enterprises at that, you’ll have to do it yourself. Call our people and take them on a tour of the factories. You should pick the ones that are the most feasible.”

“Okay. I’ll try.”

“Oh my, I thought you were going to take it out, but you’re taking it in right away. It might be harder than when you took over Asia Motors.”

“Heh, what do you think I am? A legend of the popular car! From morning exercise to cleaning up after work! I’ll show you what a living textbook is.”

“Oh my, do you still have that passion?”

“What are you talking about? Without passion, I’m a corpse! Don’t you know?”

“ha ha ha.”

Honestly, the guy’s reaction was unexpected.

Eventually you’ll do what I want, but I thought it would take a long time.

I’m sure I made a good friend.

I asked Sambok to take care of the rest and headed to the Czech Institute of Scientific Equipment.

You’ve paid enough to buy a fancy car, so you’ve got to go get what you want.

The Czechs would never have imagined that Skoda cars, which transformed into a trendsetting automobile in the 21st century, would sweep across Europe.

***

Prague, Czech Institute of Scientific Equipment.

“Welcome, Mr. Chairman!”

“Who would see this? Let’s go in.”

As soon as I entered the lab, Vice President Joo Young-gil ran over and hugged me.

A gentleman who doesn’t change much even as he gets older.

The fact that the vice president took such action meant that the engine acquired by the Czech Republic was indeed the most advanced engine for the Su-27.

“Mr. Chairman, this is a total hit. Awesome!”

“… It is truly magnificent.”

As I entered the research lab, I saw a fighter jet engine that was overwhelmingly complex and large at first glance. Our Daesae Aviation defense industry engineers came in in large numbers and were looking around.

Everyone’s expressions were bright.

“If we bring this back to Korea and analyze it, domestic production of the engine is not a dream.”

“How much engine thrust was there?”

“It’s around 28,000 pounds. It’s comparable to the F16 and even the F15.”

It appears that engine thrust tests have already been conducted.

Well, there’s no way it wasn’t done during the inspection stage.

“That’s great. But, do you think it’s okay for us to take it?”

“That’s why it’s even more of a jackpot. This isn’t an asset of the Sukhoi Design Bureau, it’s an asset of the Ryuka Design Bureau. And it’s an early model, so they don’t even know it’s gone.”

“Rulka Design Bureau?”

In the Soviet Union, each factory was classified into a design bureau, and model names for fighter planes and tanks were named after the design bureau.

In other words, the Su-27 is a product of the Sukhoi Design Bureau, and the model name “Ryukka” has never been heard anywhere else.

“It is said that the Ryuka Design Bureau manufactured the engine at the request of the Sukhoi Design Bureau. Ultimately, the AL-31F engine was delivered, but everyone has forgotten about the AL-21F engine that was used in the prototype.”

Vice President Joo Young-gil couldn’t hold back a laugh as he pointed to the AL-21F stamp embedded in one corner of the engine.

“If it’s in production mode, it’s probably not much different from a mass-produced product.”

“Yes, the fuel consumption rate is only slightly different. At that level, it’s like they just changed the model name. Wow, I want to take this and take it apart.”

“Just load it on the ship and wait a week. President Isambok will bring you good news.”

“Hey!!! You gave me permission.”

It’s almost as if the Czech government has already approved it.

We plan to allow export, so our engineers can freely look into it.

This is a prerequisite for a summit between the two countries.

“Chairman… I apologize for interrupting your speech.”

One of the employees approached me and hesitated.

“Um, what’s going on?”

“An urgent telex came in from the head office. It was sent by your wife.”

Peggy?

I quickly snatched up the telex the employee handed me.

“General Van Fleet in critical condition”

My heart sank at the first verse.

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