Chapter 418 |
When the path to commercialization of the Traveling Wave Reactor (TWR) was opened, not just the Russian media but media outlets worldwide reported on it extensively.
This once again proved the underlying strength of Russian nuclear physics.
Just because the TWR has been created doesn’t mean we can immediately replace the power plants currently in operation. However, TWRs will become the standard for nuclear power plants built in the future.
This is because they are superior to existing plants in every aspect.
There are concerns that, as a brand-new technology, we don't yet know what problems might arise during long-term operation, but these worries will likely disappear within the next year or two.
I spoke with Professor Petrov on the phone.
“So you’ve finally succeeded.”
He replied in a calm voice, rather than a joyous one.
[This is all thanks to you, CEO. This is just the beginning. The work isn't over just because the technology has been developed.]
The concept had been around for a while, and various companies were already experimenting with it. Professor Petrov’s team, with the overwhelming support of Rosatom, was simply the first to succeed.
Experiments are already in full swing in the United States, China, and France.
In three years at most, other countries will also commercialize the TWR. Therefore, in the meantime, we must widen the technological gap as much as possible and secure a large market share.
That’s why we had nuclear power companies from various countries participate in the project.
[My father made Russia a nuclear superpower. Now, I want to make Russia a nuclear power plant superpower.]
He had elevated Russia's lagging nuclear power technology to become the best in the world.
The success of the TWR guaranteed him immense wealth. And, being a nuclear physicist, he also became a top-priority target for protection by the Russian government.
“I will also do my best to help.”
Congratulatory calls from all walks of life flooded into OTK Company, while large-scale protests by environmental groups were held in Gwanghwamun.
The South Korean government was cautious, worried that the controversy over its nuclear phase-out policy would flare up again.
***
I headed to the Ceylon Hotel on Namsan to meet my mother.
For a change, she was alone today, without her friends.
“Where is CEO Im Soo-mi?”
“Don’t even ask. Soo-mi is losing her mind with how busy she is these days. I haven’t seen her face in days. And this is all your fault.”
“Why me?”
“Soo-mi got busy because you announced that Saemangeum development plan.”
“Isn’t it more because of Chairman Im Jin-yong’s arrest?”
Since Chairman Im Jin-yong's arrest, the CEOs of each affiliate have been managing their own affairs. On top of her already busy schedule investing in the theme park, integrated resort, and silver town in Saemangeum, CEO Im Soo-mi had also taken on the minor affairs of the entire group.
Juggling her existing duties, the Gangnam headquarters, the Saemangeum project, and overseas business trips, it felt like even ten of her wouldn’t be enough.
“So, what’s going to happen to Chairman Im Jin-yong?”
“How would I know?”
“It seemed like the other chairmen's wives were all worried, too.”
“Is that so?”
Anyone in the business world wouldn’t see this as someone else’s problem.
In a joint-stock company, management and ownership are separate.
No matter who runs it, a company is owned by the shareholders who hold its stock. However, in Korea especially, there is a strong tendency to equate the two.
This is because of the hereditary system where a group connected by blood, known as a chaebol, manages the company together and passes it down to their children.
That's why when a chairman commits a crime and is arrested, you hear talk of the company collapsing and the country going to ruin.
The interesting fact is that it’s not just the public, but the individuals themselves who are under this delusion. That’s why they thought it was natural to use the company car as their own or embezzle company funds as if it were their personal money.
Furthermore, if their child started a company, they would naturally pass on the company's wealth by funneling work to them through private contracts, without any competitive bidding.
In fact, quite a few companies grew into large corporations this way.
If a company buys a part from the son’s company for 10,000 won when it could be sourced elsewhere for 7,000 won, the company effectively incurs a 3,000 won loss. This is a breach of trust that harms the other shareholders.
The reason such practices became customary was that there were never any consequences. The media sided with the chaebols, and the government, while aware of it, tacitly condoned it.
But with Chairman Im Jin-yong's arrest, the chaebols have started damage control, destroying evidence of their past illegal activities and ensuring silence among their people.
“And you still don’t know when he’ll get out?”
“We won’t know until after the trial.”
One fortunate thing for Chairman Im Jin-yong was that even if he was found guilty in the first trial, there would be no problem with his management rights over the Seosung Group.
The company that really had to worry about its management rights was another one entirely.
Eunsung Motor Group was once the second-largest conglomerate in the country, competing with Seosung Group. However, while Seosung Group continued its ascent, Eunsung Motor Group plummeted, with no bottom in sight.
There were many reasons, but the fundamental one was management failure.
While Eunsung Motor was preoccupied with developing hydrogen cars, electric vehicles took over the future car market.
The era of autonomous and unmanned vehicles had begun, and a new service called ride-sharing emerged. Iver, a company that started without a single car, had long since surpassed Eunsung Motor’s market capitalization.
Not only did they fall behind in the future car competition, but they also failed to defend their existing market.
They missed the timing for new models by focusing only on sedans when an SUV boom swept the globe, and as they failed in their premium branding strategy, Chinese automakers like Zhou Cha grew rapidly.
Chinese cars, once known for their copycat designs and shoddy quality, had evolved into “decent cars to drive” and “cars with good value for money.”
The Chinese cars steadily ate away at Eunsung Motor’s market share. In contrast, German brands like Mercedes-Benz, BMW, and Audi, which had firmly established their premium image, were almost unaffected.
Unable to overwhelm with technology and having failed to build a premium image, Eunsung Motor ended up losing ground even to Chinese cars.
Currently, their presence in the Chinese market was as good as gone.
Sales, which once peaked at over 8 million units, had shrunk to around 5.5 million. This didn't just mean a 30 percent drop in revenue.
Even with fewer sales, fixed costs, R&D expenses, and labor costs remained the same. As the cost per unit increased, profitability plummeted.
Experts expressed concern that Eunsung Motor could collapse if things continued this way.
The turning point came when they formed an alliance with CarOS. This was tantamount to Eunsung Motor giving up on independent technology development and coming under CarOS’s umbrella.
Thanks to the supply of CarOS’s autonomous driving technology and OTK batteries, Eunsung Motor revived, and its stock price, which had been scraping the bottom, began to recover.
However, this was a double-edged sword for the management.
As the joint development of electric vehicles proceeded, experts from CarOS came over and began to interfere in management under the pretext of “improving management efficiency.”
The board and executives protested, but it was also true that no one had yet taken responsibility for the management failures.
Moreover, Eunsung Motor's core business was now focused on the alliance with CarOS, and large-scale investments, including the Gunsan EV industrial complex, were being led by CarOS and OTK Company. In reality, there was very little Eunsung Motor could decide on its own.
Incompetent executives who were just occupying their seats were quietly let go.
Eunsung Motor had a total of four representative directors.
With the CarOS alliance, one of those seats was given to someone from CarOS. He commissioned a foreign accounting firm to meticulously audit the company's finances. Several problems were uncovered in the process, and CEO Park Jong-ho was fired.
He had been Han Chan-young’s right-hand man. Although an insider was appointed to fill his spot, he was not one of Han Chan-young’s people. In fact, he could be seen as having pro-CarOS tendencies.
Han Chan-young felt a sense of crisis, but it was difficult to resist, as institutional and individual shareholders were giving CarOS their overwhelming support.
***
I met with Chairman Han Chan-young.
Although we had met occasionally for business, it had been a long time since the two of us met alone. He looked utterly exhausted.
He was taller than me, with a sturdy build. But as they say, your perspective changes depending on where you stand, and for some reason, he looked smaller today.
“What did you want to see me about?”
I spoke calmly.
“I’d like you to step down from your position as CEO of Eunsung Motor.”
As if he had been expecting it, he didn’t look particularly surprised. But the fingers holding his coffee cup trembled slightly.
“The BWs haven’t matured yet, have they?”
When Eunsung Motor’s stock price plummeted, OTK Company bought nearly 10 percent on the open market. We then acquired the 9 percent of treasury stock that Eunsung Motor held. With subsequent purchases, OTK Company’s stake grew to just over 20 percent.
However, to secure investment funds for the alliance with CarOS, Eunsung Motor had issued Bonds with Warrants (BWs), which OTK Company acquired.
The new shares from the BWs amounted to 20 percent of the total outstanding stock.
A BW (Bond with Warrant) is, as the name suggests, a bond with a call option. If the creditor asks for their money back, the company can simply repay the debt. But if they choose to convert it into stock, the company must issue new shares in lieu of cash.
Issuing new shares meant that the value of existing shares would be diluted.
If we were to convert all the BWs to stock right now, our current stake would drop to 16 percent. Of course, since we would receive more than that in new shares, our actual stake would increase.
To ensure management stability and protect shareholder value, the BWs were structured to mature sequentially over ten years.
“As you know, I’ve secured enough friendly shares. The foreign shareholders will follow our lead.”
Incorporating Eunsung Motor as a subsidiary of CarOS, rather than just maintaining an alliance, would be a positive development for the stock price. The shareholders would have no reason to object.
Foreign ownership in Eunsung Motor exceeded 30 percent, and that capital was on our side. Even if the National Pension Service sided with Han Chan-young, I was confident we could win at a shareholders' meeting.
And if by some chance we were to lose, we could simply stop investing in Eunsung Motor beyond our current collaborations.
He let out a sigh.
“You and I have had quite an ill-fated relationship.”
“We have.”
“Is this because of what happened in the past?”
My family was ruined and my father passed away because of Eunsung Motor. It was a classic case of a large corporation abusing its power, the kind of story you see in the news every so often.
I wondered how much responsibility he bore for it.
“Let’s just say it’s for the sake of management efficiency.”
Like Chairman Im Jin-yong, he had become chairman by succeeding his father.
But his management skills were poor. If his skills had been excellent in the first place, Eunsung Motor would never have needed to form an alliance with CarOS.
The only good thing he ever did was to reach out to me for help.
If he hadn't allied with CarOS, the company would likely be on life support by now. It probably wouldn't have gone bankrupt, thanks to the domestic market, but its foreign operations would have been sold off one by one.
He was a chaebol from birth. Like Chairman Im Jin-yong, his destiny was to inherit the Eunsung Group.
I, on the other hand, had risen to this position on my own merit.
Who could have imagined that the son of a subcontractor's president, who was ruined by Eunsung Motor's abuse of power, would end up acquiring Eunsung Motor? To make things even more ironic, CarOS, the parent company doing the acquiring, was originally a subsidiary of Eunsung Motor.
Han Chan-young gave a bitter smile.
“At this point, all I can do is laugh. Was this your plan from the beginning?”
I didn’t bother to deny it.
I helped Eunsung Motor because I had seen a premonition. And that premonition told me that I would one day own Eunsung Motor. So, you could say this was decided from the moment we joined hands.
“CarOS plans to incorporate Eunsung Motor as a subsidiary and continue to invest in it. The stock price will rise much higher than it is now.”
Even if he steps down and relinquishes control of Eunsung Motor, the fact that he is a major shareholder remains unchanged.
The harder the person who seized control works, the richer the person who lost it becomes. It may seem ironic, but that’s just the nature of the stock market.
As the group’s name implied, its core was Eunsung Motor. If that was stripped away, what would become of the Eunsung Group?
Perhaps its major affiliates would all be spun off, leaving it a mere shell, like the Eunsung Group of the past. Or maybe, it could foster a new core business.
“Will the name Eunsung Motor remain?”
I nodded.
“Of course. It’s just being incorporated as a subsidiary of CarOS. Eunsung Motor will still be a Korean company.”