Chapter 47
Chapter 47
At the time of his death, his father’s title was President of DHK Engineering.
It sounds plausible when you say this, but it was actually a small business with about 10 employees. The industry is metal parts manufacturing.
Because it has been operating diligently for a long time, it has many business partners and is a reliable SME.
However, as Chinese companies pushed in at low prices, management began to become difficult. In the long run, price competition alone was not a win-win.
His father decided to get through his crisis through the development of his skills.
After years of research, he succeeded in developing an all-in-one suspension with excellent durability and performance. About that time, I got a call from Eunsung Motors.
He said he wanted to use a product made by DHK Engineering for the new model. In addition, he added some requirements.
It was to improve some things to meet their specifications and to expand facilities to meet the delivery date.
A supply contract with a large company was a huge opportunity. As well as earning a lot of money, it is possible to greatly expand the business area as long as the quality is recognized.
My father signed a supply contract and started improving the product according to his request.
As I was fulfilling the terms of the contract step by step, suddenly lightning struck. Eunsung Motors unilaterally notified the cancellation of the supply contract.
The reason was that defects were found in the quality test results conducted by the company itself.
The more absurd thing happened next.
Eunsung Motors filed an invalidation lawsuit against the patent. It turns out that just before that, Eunsung had applied for a separate patent saying that it had been developed on its own. In fact, it was only a slight design change to the product his father had developed.
He was even already producing through a subcontractor run by his relatives. At the time of production, it was even before quality testing that defects were found.
From the beginning, Eunsung had no intention of receiving a supply from DHK Engineering. He simply wanted to receive various samples under the pretext of a supply contract and to check the manufacturing process and equipment from time to time.
It may be common for large corporations to be abused, but for small and medium-sized enterprises that are suffering, it is a matter of life at stake.
When the supply contract was canceled, the company was in trouble. The expanded facilities remained in debt, and patents developed with hundreds of millions of won became invalid.
My father went to the business directly to try to save the company somehow. However, no one wanted to do business with the company in dispute with Eunsung Motors.
Eunsung Tea Group is a huge manufacturing kingdom. Small and medium-sized enterprises (SMEs), which are no different than subcontractors of large corporations, have no choice but to take notice.
Even a healthy small and medium-sized enterprise cannot survive even if the funds do not return for a few months.
Eventually, DHK Engineering went bankrupt, and his father collapsed.
* * *
I said quietly.
“That’s how my father died, and our house was ruined.”
Unlike Taek-gyu and Hyun-joo, who know her situation, Ellie will be the first to hear about her.
She had a sad expression on her face.
“When did it happen?”
“About two years ago.”
For some reason, it felt like a long time ago. Is it because there’s too much going on in the meantime?
If someone asks me if I resent Eun Sung Cha, I will say yes. However, resentment against large corporations is counterproductive.
I hate to see the silver car, but when I turn on the TV, an advertisement for the silver car appears, and the car is all over the street.
No matter how much you dislike Eunsung tea, you can’t avoid using Eunsung tea products. Taxis are made by Eunseong Motors, buses are made by Eunseong Commercial Vehicles, and subways and KTX are made by Eunseong RT.
Can’t you just walk around? (I didn’t even have money to buy a car back then)
Ellie asked as if she didn’t understand.
“If you have suffered damage due to unilateral contract cancellation and technology theft, can’t you get compensation through litigation?”
Hyunjoo noona said with a bitter smile.
“Looking at you saying this, you are a foreign lawyer.”
“Yes? What does it mean?”
“It means that you know the law well like a lawyer, but you don’t know much about Korea like a foreigner.”
When it comes to court battles, how likely are small and medium-sized enterprises to beat large companies? Even if you win through the first trial, second trial, and the Supreme Court, how much compensation can you get? No, I wonder if SMEs will survive until then?
It is not a thing of the past for large corporations to copy or take away the technology that SMEs have worked hard to develop. However, it is extremely rare for SMEs to beat large companies in patent disputes.
“In Korea, where large corporations have become commonplace, the difference between silver and silver is particularly severe.”
The reason is that Eunsung Motors occupies 70% of the domestic automobile market. Even if all the sales of other domestic companies and imported cars are combined, the market share of Eunsung is less than half.
If you look at the entire domestic manufacturing industry, where is the market in which a single company occupies 70% of the market?
In fact, Eunseong Motors, which had established a domestic monopoly system, used all kinds of power against its subcontractors. Stealing technology, slashing unit prices, prohibiting delivery to competitors, unilaterally changing or canceling contracts, etc. Still, the partners didn’t say anything. Because there is no other alternative.
The government, which should play the role of a fair judge, watched or made a biased judgment.
Automobiles are an important sector of domestic manufacturing. It is not comparable to other industries in terms of job creation and export. The government took the side of the silver car with the mindset that if it goes wrong, it will damage the country.
Taegyu said.
“Where is that? They are famous for not only discriminating against domestic demand, but also treating consumers as hoguchi.”
It is obviously a car made by a Korean company, but strangely, it is cheap in foreign countries and expensive in Korea. Safety devices are standard for cars sold abroad, while cars sold in Korea are optional. In foreign countries, the warranty is 10 years, but in Korea it is 5 years. In foreign countries, if there is a problem, it is immediately recalled, but in Korea, it is not repaired properly.
The reason for doing this is simple.
Because that’s how it sells abroad, and still sells in Korea.
Hyunjoo noona asked us.
“Can I smoke a cigarette?”
It’s his room, but since we’re the only smokers, we’re asking for forgiveness from us, who are non-smokers. We nodded, and my sister smoked a cigarette.
Since it was a non-smoking room, an ashtray was prepared on the table. Taek-gyu, who doesn’t like cigarette smoke, slightly opened the window to ventilate.
And I refreshed the atmosphere.
“Apart from talking about our family, for now we are only talking about business. What do you think, sister?”
Hyunjoo’s older sister smoked a cigarette and said.
“Apart from emotional issues, I am the opposite. AMZ, the largest commercial commerce company in the United States, has given up, and Eunsung Motors, the largest automaker in Korea, is also trying to give up. There has been no performance so far, and I can’t launch a product right now. You don’t have to pay 100 million dollars to buy such a company.”
“Is $100 million right?”
“It’s cheap compared to the money that Eunseong Cha spent.”
Through several equity purchases, Eunsung Motors has poured 250 million dollars on Karos so far.
It was offered at less than half the price.
“But it’s expensive compared to the money that Eunsung car can receive.”
The amount that can be saved by selling patents and core technology is less than 50 million dollars. However, Eunseong is asking for twice that amount.
“How much money do you have left?”
“120 million dollars.”
Taek-gyu asked as if surprised.
“Is that the only thing left?”
In the meantime, I spent a lot of time shopping for startups (?). The amount is intermittent.
I am not a shareholder, but I also asked Ellie for her opinion.
Then she shared her thoughts.
“To be honest, I don’t know why Jinhoo chose that company. In my opinion, the amount of investment is too large and the risk is high. Right now, there is no vision. As Jessica said, following Itachi, AMZ and Eunsung Motors must have good reasons to give up and sell.”
I have selected companies with foresight, and Karos is one of them. It is natural for Hyunjoo noona and Ellie to think this way, unaware of that fact.
But Taek-gyu, who knew that fact, had the same opinion.
“I am absolutely against it. If you invest there, you will only do good things for Eunseong. Besides, it will be difficult to invest in other companies anymore.”
“I will.”
Let’s tidy up.
If we don’t invest, Eunsung will sell out its patents and technology to recover the investment, and Karos will effectively disintegrate.
If we invest, the silver car will withdraw the investment and withdraw.
What should I do?
In a common sense, investing in such companies should be avoided. But Yeji said the opposite.
What do you do when reality and foresight collide?
It would be less of a concern if the amount of investment was overflowing, but now the amount of investment is also in short supply. As Taek-gyu said, there are many other good alternatives besides Carlos.
I asked Hyunjoo noona.
“Isn’t it supposed to be not done this time?”
Then the sister said calmly.
“If you are asking for my position, yes. But it’s my job to weigh the possibilities and give advice, and it’s Jinhoo’s job to listen to that advice and make a decision. You are the CEO of OTK Company. No one can make decisions for you.”
That’s right.
It is up to the CEO to make the decision.(Read more @ wuxiax.com)
Is it right for me to push for an investment that everyone opposes? Is it really worth it?
I said after thinking.
“I’d like to meet the CEO over there.”
* * *
Ryan and Sergei expressed their displeasure at the idea of meeting the CEO in person.
Hyunjoo noona said firmly.
“It’s a $100 million business. I don’t think it’s an unreasonable request to meet the CEO.”
On the spot, Ryan called the CEO, and Hyun-joo’s sister talked to him briefly.
In the end, the CEO decided to fly right away, and Ryan and Sergei decided to go back first.
* * *
next day.
We were able to meet the CEO of Karos in the meeting room.
It was a white male in his late thirties with his hair half bald and wearing glasses. He was casually dressed in jeans and a T-shirt.
Normally, Hyunjoo noona would come first, but this time I went first.
“Welcome to Korea. This is Jinhoo Kang.”
I reached out to him.
He grabbed my hand tightly.
“Nice to meet you, Daryl Sagan.”
That was the moment.
A hologram appeared in front of my eyes after a long time.
A unicorn is a one-horned unicorn, a privately held company valued at $1 billion.
Decacorn is a mythical animal with ten horns. As it has ten times as many horns as a unicorn, it means a privately held company worth more than $10 billion, ten times that of a billion.
10 billion dollars…
I smiled inside.
I picked this up right.
