Chapter 250

Chapter 250

After World War II, the world was divided into two camps. And with the collapse of the Soviet Union, the United States took over the world hegemony.

The world economy revolved around the United States and its currency, the dollar, and the United States was in an unwavering position that no other country could match, both militarily and economically.

Japan is the only country that has even pursued it to the knees. But they caught up so closely that they forced the Plaza Agreement to be signed, which was later crushed by the collapse of the real estate bubble.

In the 1990s, China, which started reform and opening up, began to rise rapidly. Politically, it still maintained the socialist system, but economically, it abandoned communism and embraced capitalism.

With a vast continent, resources, and a domestic market of over 1.5 billion, China has grown at a tremendous pace. A few years ago, it overtook Japan to become the second largest GDP in the world, and proudly rose to the G2 status.

China, a latecomer, has adopted a typical fast-follower strategy to catch up with advanced countries.

To this end, foreign companies were forced to establish joint ventures with their own companies when entering China.

The first purpose is to allow foreign companies to share the profits they earn with their own companies. I’m not going to let you just come in and get your money.

And the second purpose (actually, this is the most important) is to acquire technology through collaboration.

Technology is not just a few patents, but the totality of the culture that a company has built up over a long period of time. For local companies, they can operate factories together, distribute products, and directly learn the know-how of global companies.

Taek-gyu asked after hearing the explanation.

“You’re not learning, you’re copying, aren’t you?”

“Well, it is not.”

“Why are you going to China even though you know that?”

“That’s why the domestic market is so big.”

It is difficult for any company to give up on a market worth 1.5 billion won.

That is why global companies set up joint ventures even though they know there is a risk. It’s nice to be able to make money right now, but the problem comes later.

For example, Danone, a French food company famous for Evian bottled water, entered China and established a joint venture with Wahoo Who, a local food company. However, Wahoohoo, which acquired Danone’s technology, created another corporation and sold its own products, which resulted in a dispute, which led to a lawsuit.

Chinese courts are, of course, on the side of their own companies. Danone decided that there was no chance of winning by fighting, and eventually sold all of its stake in Wahoohoo and withdrew.

In a good way, he left after realizing a profit, but in a bad way, he was expelled quickly.

It’s not the only thing that’s similar. Local Chinese companies that have grown in size are taking over foreign companies’ shares or driving them out of the Chinese market.

Until just 10 years ago, Chinese products were the subject of ridicule. Was there ever a joke that everything but bombs exploded?

But that’s all a thing of the past. Chinese companies that have grown into conglomerates are now challenging the high-tech sector dominated by the United States.

One of them is the future garage represented by autonomous driving and electric vehicles.

Chairman Im Jin-yong said.

“There is constant pressure to build a battery factory in China. He said that he would pay a huge subsidy as long as the OTK battery was produced in China.”

“Are you talking about setting up a joint venture with a Chinese company?”

“of course.”

If they create a joint venture in China, they will try to steal technology at any cost. This would be a more certain way than taking out one or two people.

From self-driving cars to batteries. I don’t know why they are so interested in us.

“What if you don’t?”

“China has excluded NCM batteries produced by Korean companies from the domestic market by not providing subsidies. If we do not establish a joint venture in China, it is highly likely that it will be difficult to even obtain certification for OTK batteries.”

This means that OTK batteries cannot be installed in other electronic devices as well as electric vehicles in China.

OTK batteries have already started commercialization from small batteries. It is said that a module is being manufactured and tested, and battery packs for automobiles will be made soon.

The price is currently more expensive than conventional batteries, but the capacity is doubled and the total charge speed is quadrupled. If only the production line is maintained and mass production begins, the price will be lower.

“Then what should I do?”

“It is one of the two. We need to either enter the Chinese market quickly by negotiating on the best possible terms, or dominate markets other than China and widen the technology gap.”

Of course, whichever one you choose, China will not stand still.

The story that started with fake Lego gets complicated. It’s hard to deal with a country that ignores patents.

“I need to think about that.”

Chairman Im Jin-yong nodded his head.

“I think it would be better to rush the launch and production of electric vehicles. Battery production is slowly being prepared.”

“I think the same, but… … .”

The problem is that development is slow. This is how the year came to pass.

Chairman Im Jin-yong said in a passing tone.

“How about working with Eunsung Cha? Things are looking bad these days.”

“Eunseong tea?”

“It will be difficult to wait for the North American and European markets with Karos alone. Wouldn’t it be worth considering as a partner in the Asian market?”

The Seoseong Group predicted future cars as next-generation food. For this reason, he continued to pour the money he earned from semiconductors into battlefields and batteries.

Regardless of who makes it, the more self-driving cars and electric vehicles, the more profit it will make. In addition, demand for semiconductors is also increasing, so from the Seosung Group’s point of view, they eat pheasants and eat eggs.

Taehyung shook his head resolutely.

“What do you mean? He hates silver tea. Is not it?”

“What… … .”

At that moment, something flashed before my eyes.

* * *

Chan-Young Han held a meeting at the headquarters of Eunsung Motor Group. The presidents and executives of each affiliate sat down in the conference room.

Everyone had dark faces.

First, the management report began.

“Sales continue to decline in North America and Europe. The deficit is also growing.”

After the Big One, the world economy suffered a great shock, and car sales hit a trough, but now they are gradually recovering.

Come to think of it, only a few parts of California have been hit by the earthquake. In the case of the United States, the confidence that it had successfully overcame the catastrophe and expectations for a future boom were flowing.

However, unlike other automakers whose sales volume is increasing, the sales volume of Eunsung Motors continued to decrease.

The reason is, of course, the airbag recall incident.

Now, the problem has been resolved to some extent, but the brand image has been severely damaged.

A decline in sales is also a problem, but a bigger problem is the continued decline in operating profit margin. When Eunsung Motors was at its peak, the operating profit margin was over 10 percent. Until last year, it barely maintained 7 percent, but last year it fell to 3 percent due to an airbag recall. And in the first quarter, airbag recall and shipment backlog overlapped, resulting in a massive loss.

For Chan-Young Han, it means that he inherited the group in the worst crisis situation. Although Han Min-koo’s retirement was earlier than expected, fortunately, he had been preparing for the succession of management. Chan-Young Han quickly took control of the group and carried out personnel innovation.

Some of the presidents and executives who followed the previous president resigned, and the positions were filled with new ones.

Toyota succeeded in surviving the sudden acceleration and taking another leap forward. In hindsight, a defective airbag is nothing compared to a sudden start.

Eunsung Motors is still one of the world’s five largest automobile groups, and has enough potential to overcome the crisis.

Chan-Young Han advanced the new car launch plan and introduced two compact cars and one mid-size car.

Although the cost increased significantly as it was equipped with various new technologies and safety devices, it was released at the same price even at the risk of a decrease in the profit margin.

Rather than making a profit right away, the plan is to build up consumer trust again from small to mid-size cars.

Fortunately, the market response has been good. It was a car with good value for money, and it was well received overseas. As the issue of airbag recall was overcome, sales were gradually increasing. Some models are out of stock and have to wait several months.

By the way… … .

Vice Chairman Kwon Hwan-yong opened his mouth.

“Currently, the union is holding a partial strike at the Pyeongtaek Plant, Jeonju Plant, and Ulsan Plants 1 and 2.”

Chanyoung Han muttered as if in pain.

“Another strike? … .”

It’s something that happens every year anyway, so it’s nothing new.

The Eunseong-cha union has an unprecedented record of strikes for 12 consecutive years. And, except for a one-year break in the middle, the strike is going on for another seven years in a row.

But this year the situation was serious. Consumers will not be convinced if the contracted quantity is not delivered on time when trust in the company has already run out.

Even though GM closed one of its domestic factories last year, the Eunsung Motors union did not seem to feel any sense of crisis. Unsurprisingly, unlike GM, Eunsung Motor has a structure that makes it difficult to shut down its Korean plant.

You may think that it is not necessary to insist on domestic production and import it from overseas factories, but according to the labor-management agreement, in order to import overseas production into Korea, you must obtain the union’s consent.

Of course, unions cannot agree. In the end, if an all-out strike occurs, domestic sales will naturally all stop.

Chan-Young Han asked Vice Chairman Hwan-Yong Kwon.

“How is the collective bargaining agreement going?”

“I think we can somehow find a compromise on the wage increase, but other conditions are a problem. The company is offering unacceptable conditions. We are still talking with union members, but this year our attitude is stronger than last year. All factories will go on strike if all demands are not met by the next negotiation.”

Strike is a natural right of workers. However, this is a last resort when negotiations break down, not the best.(Read more @ wuxiax.com)

However, the Eunseong-cha union wields the strike as if it were a report of imputation. If they don’t meet the requirements, they go on strike first, and then the negotiations begin.

CEO Yoon Soo-hwan asked.

“Have you ever talked about how difficult the company is?”

“I’ve talked about it, but the union side is protesting why they are shifting the responsibility for management failure to the workers.”

Everyone present was at a loss for words.

When business performance is good, they insisted that workers share it, but when business performance is not good, what is the case where the words suddenly change?

The Eunseong-cha union argued that all of this was due to the wrong management of the owner family, and insisted on the resignation of Chan-young Han and the introduction of a professional CEO.

Now, even the CEO seems to be changing because he doesn’t like it.

At this point, it may be a union or a shareholder.

We cannot close our domestic factories, nor can we import goods from abroad. However, we cannot allow domestic demand to become a problem even in an already difficult situation.

It’s really a setback.

Vice Chairman Bae Min-seong said.

“But do you really want to go on strike? Are you saying that the union is well aware that the company is in crisis right now?”

Vice-Chairman Kwon Hwan-yong said clearly.

“It is the opposite.”

“Are you against it?”

“Rather, as the company is in crisis, we will go on strike and pressure them to comply with the demands.”

He joined the company as a salesperson, worked as a labor management support officer and a Pyeongtaek plant manager, and is currently in charge of labor management and domestic production of Eunsung Motor Group.

As such, he had a high understanding of the union and knew exactly his physiology. The current situation is that the union is holding the collar of the company. I will never let you go easily.

There are a number of reasons why Eun Sung Cha is in this situation. And the cause is ultimately linked to one person.

‘Is this and that all because of the earthquake?’

Currently, the number of units sold by Karos is not even in the top 20, let alone top 10. Nevertheless, the corporate value has already far surpassed the silver star.

This is because we are at the forefront of the future car competition.

Chanyoung Han thought carefully.

‘Should we find a solution where the cause is?’