Chapter 419 |
The automotive industry is both labor- and technology-intensive, and it is such a crucial industry that it holds the top spot in global trade volume.
That is why every country nurtures its automotive industry as a key national industry.
Eunsung Motors rose to become a global automaker thanks to this government support, its monopoly on the domestic market, and its endless technological development.
It is an undeniable fact that the late Chairman Han Min-goo was a great executive. However, in his later years, he pushed Eunsung Motors into a crisis due to several missteps.
While Eunsung Motors was clinging to hydrogen cars and embroiled in the chaos of the PAS airbag recall, self-driving cars were being commercialized, and platoons of logistics trucks were running on the highways. Following that, unmanned taxis appeared, and a driverless bus is now in test operation in the heart of New York City.
Ironically, the advancement of technology resulted in a decline in sales. As people could conveniently use a car whenever needed, the necessity of owning one simply vanished.
Until now, the growth of emerging markets like China and India had propped up demand, but that has now reached its limit. Global car sales have already begun to show negative growth.
And now, everyone is engaged in a battle for survival.
I looked at Han Chan-young.
That's why I only invest and do not interfere in management. Knowing when to stay quiet if you don't know something is also a skill.
What choice will Han Chan-young make?
If he doesn't step down on his own and holds out to the end, it will come to calling a general shareholders' meeting for a showdown of votes. Perhaps we might even have to start buying up shares to secure friendly stakes.
Either way, there's no way I can lose.
After a long moment, Han Chan-young spoke calmly.
"Please take good care of Eunsung Motors."
With those as his final words, he rose from his seat.
***
[(Breaking News) Chairman Han Chan-young Resigns as CEO of Eunsung Motors]
[Cites Only "Personal Reasons"]
[Is Eunsung Motors Being Handed Over to CarOS?]
[CarOS: We Will Further Strengthen Our Support for Eunsung Motors]
[Who Will Be the New CEO of Eunsung Motors?]
The news of Chairman Han Chan-young's resignation was quickly reported in the newsflashes. This did not simply mean the departure of one man. Soon, all those considered his loyal retainers would be forced to resign as well.
Until now, OTK Company had invested in numerous companies, but it had never once coveted management control. This time, however, they had replaced the entire management team for the first time.
Some voiced concerns about a merger and acquisition, but both CarOS and OTK Company strongly denied the possibility.
No matter how much Eunsung Motors was criticized for its quality and image, it was a national company that held a 70 percent monopoly over the domestic auto market.
With its many related industries and partner companies, the market took this as a major shock.
The public's reactions were mixed.
- Wow! Big Bro Kang really backstabbed him good~
- I knew it from the moment CarOS and Eunsung formed a partnership. They were aiming for management control from the start.
- How is this any different from the hedge funds that snatch away management control?
- No matter how much you praise him, Kang Jin-hoo was a speculator from the beginning.
- A typical corporate raider.
- Bro, I'm disappointed ㅜㅜ I used to think highly of you.
- The Han Chan-young family grew the Korean auto industry to this point, how could he do this?
- LOL, what's so wrong with changing the management? Is Eunsung Motors supposed to be run by Han Chan-young for a thousand years? And when he dies, his son takes over?
- Seeing the stock price jump nearly 5% after the management change proves the shareholders are happy. Why are you all, who don't even own a single share, making such a fuss?
- In any case, it's hard to survive on their own technology. Since even GM and Ford have joined hands with CarOS, this might actually be a good thing for Eunsung Motors.
The business world, too, was in a state of chaos.
Until now, the dynastic, family-run management of the chaebols had been taken for granted in Korea. Consequently, even legitimate stock market activities like stake acquisitions or management disputes were treated almost like sins.
But this incident served as a fresh reminder of the obvious fact that if you lose a battle for shares, you can be stripped of your management rights.
If Kang Jin-hoo were to set out to swallow domestic companies whole, how many could possibly withstand him?
The business world quickly began to check its available assets and friendly stakes, and even reviewed measures like having major shareholders buy up stock with their personal funds to increase their ownership percentages.
But the ones most shocked of all were the Eunsung Motors labor union. The union, which had been preparing for a strike like an annual ritual, was thrown into an uproar.
"Wait. What happens if Han Chan-young steps down?"
"Does this mean we have to deal with Kang Jin-hoo instead of Han Chan-young from now on?"
"Then what about this year's strike? We need to get the wage increase we couldn't get last time."
"We've already made all the banners with Han Chan-young's name on them. Do we have to change them to Kang Jin-hoo?"
For Eunsung Motors, domestic sales were absolute. Since cars produced in overseas factories could not be imported without the union's consent, a halt in domestic production meant a complete halt in sales.
Because of this, they had staged strikes every year demanding wage increases and improved benefits, and their demands were always met.
Thanks to this, the wages of Eunsung Motors' production line workers were the highest in the manufacturing sector—excluding IT or specialty products—and were high even when compared to the US or Germany.
The union had already clashed with Kang Jin-hoo during a previous strike. The result, as everyone knew, was a complete defeat for the union.
They had to withdraw from the strike with nothing to show for it but immense public criticism. It was a first in the history of the Eunsung Motors union's strikes.
While Korea may be the most important market for Eunsung Motors, to CarOS, it is just one market among many.
With an electric vehicle industrial park now set to be built in Saemangeum, following the one in Gunsan, the Eunsung union's influence was gradually weakening.
And in a situation like this, they might have to face Kang Jin-hoo every single time from now on?
Even among predators, there are opponents who can be reasoned with and opponents who cannot. If Han Chan-young was a fox, Kang Jin-hoo is a tiger.
Union Chairman Yang Soo-hyung shouted.
"We can't let this happen! We cannot stand by and watch our management be replaced by speculative capital! The union must step forward to protect Eunsung Motors!"
It was unclear since when the union had started worrying about the chairman's position, but all the union members agreed vehemently.
"Hear, hear!"
"Bring back Chairman Han Chan-young!"
"Let's protect our chairman!"
The Eunsung Motors union had long shouted for Han Chan-young to take responsibility for his management failures and step down. But now, they were demonstrating and crying out for his return.
***
The Eunsung Motors union resolved to launch a general strike if Han Chan-young was not reinstated.
In a way, the Eunsung management and the union had been in a hostile symbiotic relationship. But now that one side was being completely replaced, this symbiotic relationship was on the verge of collapsing.
On a call with Daryl, I said:
"If they want to strike, let them. A person should be able to do what they want in life."
As the global division of labor accelerates, the links between development, production, and sales are gradually weakening.
Right now, auto plants all over the world are competing for production volume based on productivity. The factories in Korea had been exempt from this competition until now, but not anymore.
A change in management does not invalidate existing labor-management agreements. Therefore, cutting base salaries or reducing headcount is impossible. However, it is possible to cut overtime pay by reducing the production volume and eliminating overtime work.
Even if Korean sales are halted for a while, from now on, production volume will be allocated strictly based on productivity.
The union may see it as unfair, but from a management perspective, there is no reason to allocate more volume to a factory with low productivity and frequent production disruptions due to strikes.
Daryl agreed with my assessment.
[Eunsung Motors has had problems with both its management and its union for a long time. For the Korean auto industry to recover, we must resolve these issues for good this time.]
***
The world changes faster than people think.
Uncertainty frightens people. That is why people have always wanted to know the future.
In the past, people consulted fortune-tellers, but these days, people perform "analysis." They predict the future by inputting various variables.
In the financial markets, where enormous amounts of capital are at stake, future economic trends are extremely important. That's why various institutions and experts release all sorts of forecasts using their own methods.
In the past, those in power monopolized information, but nowadays the world has improved so much that anyone can access information with just a few clicks.
There is a flood of data, from articles analyzing global economic trends to pieces on specific industries and sectors. The real problem is being able to pick out the quality material from the pile.
A few days ago, an economic forecast by NYU professor Nouriel Roubini, famous as "Dr. Doom," was published in the media.
Taek-gyu was shocked when he saw it.
"What? The global stock market is going to collapse within a year?"
"Look closely. It doesn't say it 'will collapse,' it says it 'could collapse.'"
"What's the difference?"
"The difference between being able to change your story later and not."
Basically, an economic forecast is one of two things: it goes up, or it goes down. So, no matter the prediction, you're bound to be right about half the time.
But extreme predictions, like a massive surge or a crash, are incredibly hard to get right.
It's like predicting the sum of three dice. The probability is highest for middle values like 9, 10, 11, and 12. In contrast, the probability of getting a 3 or an 18, which have only one combination each (1,1,1 and 6,6,6), is 1 in 216.
If you can call something like that, you can become incredibly famous.
Professor Nouriel Roubini became famous for accurately predicting the real estate collapse before the financial crisis. The same goes for Nassim Taleb, the author of 'The Black Swan.'
Since then, Roubini has consistently warned of bubbles and crashes, but his recent batting average hasn't been very good. Despite his warnings, the stock market and real estate have continued to rise.
"Aren't you the one who should be making these kinds of economic forecasts?"
In truth, I receive countless interview requests.
If I accepted all of them, my schedule for the year would probably be packed. That's why I've refused them all. Even from Time and Forbes.
The biggest reason, above all, is that I have nothing to say. For economists, analyzing the economy is their profession, but the only thing I can do is occasionally see the future.
If I said something that sounded plausible and it later turned out to be wrong, imagine how much criticism I'd get.
There are already more than enough people in the world who bad-mouth me; there's no need to add to their numbers.
As Taek-gyu and I were talking, Ellie came over to have lunch with us. It was hot, so instead of going out, we headed to the company cafeteria.
Ellie asked me.
"Do you happen to know someone named Kim Ju-gwang?"
"Kim Ju-gwang?"
"They said he's a singer."
"Ah, of course I know him."
"I've been listening to his music lately, the lyrics are so beautiful."
"Which song are you listening to?"
"Magic Castle."
It's music from a generation ago, but it's so famous and has been remade so many times that most people would recognize it if they heard it.
Taek-gyu quickly chimed in.
"Ah! Magic Castle is a true masterpiece. Did you know he was inspired to write it while playing a video game?"
"Really?"
"Yep. He wrote it after clearing a game called 'Prince of Persia.'"
Ellie was fascinated.
"So there's a story like that behind it."
I hadn't known that either. I always thought the lyrics were fairytale-like, but I never imagined it was inspired by a video game.
"I met him a few days ago for work. I even got a signed CD. He said he's having a concert at the end of the year, let's go see it together."
Taek-gyu asked, looking confused.
"For work? What kind of business does Golden Gate have with him?"
"He's currently the Head of the Real Estate Asset Management Division, and he frequently trades our firm's ETFs."
At Ellie's words, Taek-gyu looked even more confused.
"The Head of the Real Estate Asset Management Division? Who is?"
I told Taek-gyu.
"You didn't know? Kim Ju-gwang's main job is a fund manager."
Taek-gyu was aghast.
"What? Really?"
"He even launched a passive fund that he managed himself called the Magic Castle Fund. Its returns were pretty good, too."
"You're not pulling my leg, are you?"
"It's true. You can find it all online anyway."
It was common knowledge for people in the financial industry, but a fact that most people didn't know. To the general public, he was far more famous as a singer than a fund manager.
I only found out myself after I entered business school.
I asked Team Leader Jung Ki-hong, who was eating with his staff at the next table.
"Director Kim Ju-gwang from Real Estate Asset Management, didn't he used to visit our university?"
Team Leader Jung quickly replied.
"Ah! Yes, of course. He came to our recruitment fairs every year and would sing a few songs."
Only then did Taek-gyu seem to believe it.
"Besides Magic Castle, he has so many other masterpieces like 'Farewell Letter,' 'Oh Wolf,' and 'Seoul Girl.' But his main job isn't a singer?"
"Nope. Singing is a hobby or a side job for him."
"He produced those masterpieces as a side job?"
"Apparently so."
There are people in this world who possess great talent in two seemingly unrelated fields.
Most singers struggle their whole lives to produce a single hit song, yet someone else creates songs as a hobby that are still sung a generation later.
Seeing things like this, it really hits home how unfair the world is.
But such cases do exist. There are lawyers in the world with the beauty of a model, and...
"And you, for instance. Your main job is Vice President, but your side job is being an otaku."
Taek-gyu shouted as if he was angry.
"What are you talking about!?"
"Just kidding."
"My main job is being an otaku, and my side job is being the Vice President."
"..."
Ah, so that's how it was?