Command & Conquer
Command & Conquer. The year 1991, filled with so many events, flew by like a bullet. When ID Group tallied its total revenue and net profit for the year at the end of December, the rapid growth was immediately apparent. The group's total revenue reached $1.9 billion. ID Investment accounted for over $1.4 billion, while ID Technology fell just short of $500 million. By scale, Investment was clearly the larger entity. Yet the picture changed when looking solely at net profit. ID Investment's net profit remained unconfirmed, whereas ID Technology's exceeded $300 million. The reason was simple. Investment's Japanese positions were still in progress, while ID Technology's revenue translated directly into confirmed profit the moment sales occurred. As a result, corporate taxes arising only from net profit stayed remarkably low. A quick calculation put them under $100 million. To Yoo Jae-won, the figures highlighted ID Technology's remarkable growth. Those who knew only fragments of the story were stunned. After all, the company had paid over $2.2 billion in taxes the previous year, yet this year's liability would not even reach $100 million. The United States showed little reaction, but Korea erupted. Newspapers and broadcasts were plastered with articles claiming ID Group was on the verge of collapse. Naturally, the group felt the impact. Investors who had placed money in ID Investment's products flooded branch offices demanding early redemptions. It was a truly regrettable situation born of the media's regressive habits. The first newspaper to publish claims that ID Group was riddled with bad debt was, predictably, Daehan Ilbo. Almost every daily reprinted the story, and even public broadcasters mentioned it. Throughout the frenzy, very few reporters contacted the Korean subsidiary or the U.S. headquarters for direct confirmation.
The biggest reason 1991 net profit differed so sharply from 1990 was that ID Investment's positions were still open. In 1990 the oil futures trade had closed cleanly within the year, allowing the firm to book an $8.8 billion gain. Now, however, the bet on the Japanese Nikkei index remained active. While the oil futures had resolved quickly, the Nikkei position was scheduled to run until the summer of 1992. In contrast, ID Technology's revenue alone had grown five- to sixfold. Starting in 1991 the company had secured an unassailable position in PC operating systems and office software, and that dominance translated straight into sales.
Choi Kang-wook in Korea released a press statement detailing these facts the moment newspapers began blanketing their pages with ID Group stories. Yet the tone of coverage barely shifted over the following days. Someone was clearly pulling strings behind the scenes. The reversal began from below. Investors who had requested redemptions discovered the truth. It was common sense that early termination of an investment product drastically reduced the amount received. If the product's return was negative, principal losses could be severe. Those filing for early redemption had therefore resigned themselves to accepting such losses. ID Investment, however, was different. Its Nikkei position was generating unprecedented profits. With the index at 21,000, the firm maintained a position that earned $620 million for every 500-point decline below the 24,500 entry level. At the current index, that translated into $4.34 billion in unrealized gains on a $3 billion principal—an astonishing 143 percent return. Early termination carried penalties, so investors did not receive the full return. Even so, they recovered their principal plus more than 50 percent profit. Those who had panicked after reading the newspapers and assumed they had lost everything were left speechless upon receiving their statements. The reaction was especially intense among those who had invested hundreds of millions of won. Accustomed to moving large sums, they understood investments well enough to calculate exactly how much they had forfeited through their hasty decision. They immediately tried to cancel the redemptions, but no investment firm would entertain such requests. ID Investment was no exception. The only option was to open a new account.
Human psychology proved remarkably shallow. Even those who redeemed midway had still profited handsomely. Someone who invested one billion won and withdrew after believing the articles would still walk away with 1.5 billion. In 1991, when interest rates were punishing, no other product delivered such rapid gains. Yet people fixated on the hundreds of percent they might have earned had they held to maturity rather than the 50 percent already secured. They had already mentally claimed that future money as their own. Receiving 1.5 billion therefore felt like a loss, and their anger naturally turned toward the newspapers that had printed the nonsense. Daehan Ilbo and Dongha Shinmun remained unmoved, but the episode delivered the first serious blow to their once-unassailable credibility. Ideology and politics never felt personal to ordinary citizens no matter how the papers framed them. Money, however, changed everything. Thousands of investors had followed the articles and filed redemptions, suffering losses totaling hundreds of billions of won.
“See? Why did you believe the newspaper articles?”
Yoo Jae-won, speaking from his Old Palo Alto residence, reacted to the report of the minor commotion at the Korean ID Investment office. The most regrettable cases involved his maternal relatives. His mother's younger brother—his uncle—had withdrawn his funds after reading the articles. Jae-won had wondered who could possibly trust such shoddy reporting, only to discover the victim lived nearby.
—Can't the redemption be canceled?
“Canceled? No, that isn't possible. Just open a new account.”
Even for his uncle, special treatment was out of the question. Once exceptions began, everyone would demand them. ID Investment's systems had been deliberately built without rollback capability. At least the Nikkei position would continue until summer. The current stance was already established, yet additional exposure could still be added depending on market conditions. Keeping money in the fund therefore offered the best chance of further gains.
—Ah, I understand. By the way, are you doing all right in America?
“Of course. Besides, plenty of people are looking after me.”
—And make sure you eat properly at mealtimes. Lay off the hamburgers and eat rice. Koreans draw their strength from rice.
“I will.”
—All right. I'll hang up now.
“Yes, take care.”
It had been a call with his mother. They spoke once or twice a week, usually just exchanging pleasantries. Today's conversation had included his uncle's gullibility as an extra topic. The redemption rush at Korean ID Investment had also become a subject of discussion among the American executives. They could not understand why anyone would redeem when the Nikkei position was delivering such extraordinary returns. The confusion stemmed from their unfamiliarity with Korea's unique media landscape, where controlling just a handful of newspapers and three broadcast networks effectively controlled the flow of information. Yoo Jae-won felt no urgency; the internet would eventually solve the problem.
Ring ring!
Today seemed to be a day for calls. Another call from Korea. Even without caller ID, he knew instantly because the ringing phone was one of several on his desk, each reserved for different purposes. The line that now rang was the one he had given only to his parents and Korean acquaintances. He used to manage with a single phone, but as his affairs grew more complex he had separated the lines. The added communication cost was negligible.
“Hello? This is Yoo Jae-won.”
—Oh, it connects right away.
It was Lee Yong-kwon, president of Sambo Computer. Communication with him had increased sharply since December of the previous year. Sambo Computer was ID Group's first true partner. Its flagship Egg series was approaching the point where the next generation needed planning. Other topics included Sambo's various current issues: entry into Korea's emerging second mobile telecommunications business and the question of changing the group's corporate identity. As always, Yoo Jae-won offered his advice without reservation. The outcome of the second mobile license was obvious; the president intended to push his son-in-law's company, Seongkyung, from the start. Sambo's leadership had been skeptical, yet Jae-won urged them to participate anyway. Only by joining now could they secure a foothold for the third or fourth licenses when they eventually opened. Moreover, Sambo's scale had grown dozens of times compared with a few years earlier. The company that once produced ten thousand units a month now manufactured at least 150,000 computers. Its customer base had expanded from the United States to advanced nations worldwide. Local subsidiaries covered all of Europe, supported by dense distribution networks. Once Android 1.0 eliminated the language barrier that had been the greatest obstacle to computer adoption, sales that were already surging climbed even higher. The combination of a graphical interface and localized language packs made computers far more accessible to beginners. With the Egg series becoming the reference design and object of desire, Sambo's revenue rose once more.
—By the way, the board has approved the CI change. Once the shareholders' meeting confirms it, Sambo Computer will become TG.
“Oh, you've finally decided.”
The name change had been Jae-won's suggestion the previous autumn. Now the decision had been reached. Because Lee Yong-kwon and the other partners held more than 50 percent, board approval effectively meant confirmation. TG stood for TriGem. “Sambo” meant three jewels, and the partners had wanted to keep the meaning by using the English “TriGem.” Jae-won had argued the name was still too long and recommended the abbreviation TG. The debate between TriGem and TG had been intense, but TG prevailed. He would never regret it. In time, many Korean companies would adopt two-letter names. The practice would spread like wildfire, not because a few firms chose it, but because abbreviations were easier to remember and corporate identities simpler to unify. While an overabundance of such names might eventually create confusion, being first to adopt the style and build recognition carried no downside.
—When the CI drafts are ready I'll send them over. Could you give me some feedback?
“Of course. I suggested the change, so I should see it through to the end.”
—Thank you! I only trust you, Jae-won!
Yoo Jae-won answered readily. He already knew which design directions would remain timeless even into the twenty-first century. After a brief discussion of the next-generation Egg PC, the call ended. The key feature of the new model would be the introduction of a notebook version. LCD technology had been poor through 1991, but acceptable panels had finally appeared. Sharp, which had received dozens of pointed criticisms from Jae-won, had sent samples of an improved LCD after much effort. The new panel offered 256 colors at 800×600 SVGA resolution—a dramatic improvement over the previous year's models. Ghosting and viewing angles remained issues, yet the display was no longer unusable. This made it feasible to begin developing an Egg notebook with an LCD screen. Battery life was still problematic, and neither Intel nor AMD had released mobile-specific chips, but attempting the project seemed worthwhile. Jae-won himself wanted a notebook computer. He would begin university in the fall, and the difference in efficiency with or without one would be enormous. If TG could produce a notebook of appropriate size and weight, Jae-won was more than willing to serve as a walking advertisement. The standards he had set, however, were high, so TG's engineers faced a demanding road ahead.
Ring ring!
Today really was a day for calls. After finishing with Lee Yong-kwon, Jae-won had been heading toward his computer when another phone rang—the Korean line again.
—It's me.
The moment he picked up, the voice announced itself with “It's me.” Only one person spoke to him that way: Jeon Myeong-heon, honorary chairman of Mirae Group. Jae-won's mind raced. Unlike Lee Yong-kwon, the reason for Jeon Myeong-heon's call was not immediately clear. Six days earlier, on January 1, the chairman had called to exchange New Year's greetings and said nothing of consequence. In the meantime, events had unfolded exactly as they had in the original timeline. On January 3, Daehan Ilbo broke the story that Jeon Myeong-heon was preparing to form a new party ahead of the March general election. It was an event that had occurred in the previous history as well. Tired of being treated as a political piggy bank, he had formed the Tongil National Party in a fit of anger, achieved unexpected success, and entered the National Assembly in Yeouido. Yet when he made the New Year's call on January 1, he had not mentioned any of this to Jae-won. Although he had permitted the “grandfather” address, they were not blood relatives, so he had apparently decided to keep political matters at a distance. Consequently, once politics—the chairman's most pressing issue—was set aside, no other obvious reason for the call came to mind.
“Ah, Grandfather. What brings you to call?”
—What do you mean, what brings me? Do I need a reason to call you?
“Haha, of course not.”
—Then let's talk more often from now on.
“Yes, I'm sorry. I'll call you more frequently.”
—Good. By the way, how is your university preparation going?
“It's going well! As you advised, I've applied to as many places as possible. My TOEFL score came out nicely too.”
The TOEFL was required only for foreign applicants. American universities needed to confirm that foreign students could handle coursework in English. For Yoo Jae-won the test had never been a serious obstacle. As he answered, he felt strongly that Chairman Jeon was uncharacteristically circling around the point. Jeon Myeong-heon's usual style was blunt and direct. After greetings, he normally came straight to the matter at hand. Today was different. Jae-won's university applications had already been completed the previous year. Once March arrived, acceptance letters would begin arriving on schedule. A man who had sent many of his own children and grandchildren to America's top universities would certainly know this, so asking about it suggested he was stalling before raising a difficult subject.
—Well, the truth is I have something to ask you.
“What is it? If it's a question from you, Grandfather, I'll answer with all my heart.”
Fortunately, Jeon Myeong-heon was not the type to hesitate for long. One round of small talk was enough. He went straight to the point.
—You know I'm preparing to form a new party, don't you?
Instead of the political issue Jae-won had set aside, the direct question landed squarely.
“Of course. You gave me a similar hint last year.”
Jeon Myeong-heon had not openly declared his intention to form a party even to his closest aides and family. He had only occasionally expressed dissatisfaction with politicians. Jae-won had been no exception. The chairman had clearly wrestled with the decision for a long time, and the massive tax assessment that arrived at the end of last year had finally triggered action.
—Yes. I wanted to hear your thoughts. Are you against it as well?
As expected, family members and close associates were all trying to talk him out of it. After all, an industrialist entering politics directly was unprecedented in Korea. Naturally, many people were concerned, especially within Jeon Myeong-heon's inner circle. They feared that failure would bring not only financial losses but also retaliation from offended politicians that could damage both the company and the chairman's entire family. Above all, they judged the probability of success to be extremely low.
“Hmm, do I have to answer right away? Let me think for a moment.”
—Take all the time you need.
With a brief reprieve, Yoo Jae-won's mind moved quickly. In truth, neither Chairman Jeon nor Mirae Group occupied a large place in his master plan. When he had originally formulated that plan in his previous life, he had never imagined becoming this close to Jeon Myeong-heon. As a result, his contingency planning for Mirae Group had treated it much like any other chaebol. Likewise, the chairman's political move had been regarded as little more than background noise. Jeon Myeong-heon's Tongil National Party would achieve significant success in the general election, but the presidential candidacy that followed would end in total failure. The chairman would retire, the party's center would vanish, and Tongil National Party would collapse. Since the organization was destined to disintegrate on its own, it had merited no special attention in the master plan. Reality, however, was different. Because the chairman was now seeking advice, Jae-won could influence his political path. This matter required him to produce the best possible outcome using only his own judgment, without relying on the master plan. Countless scenarios and assumptions flashed through his mind and disappeared. Three minutes passed.
“Hello? Grandfather? Are you still there?”
—Yes. Go ahead and tell me.
Chairman Jeon had apparently kept the receiver to his ear the entire time.
“Do it! I think you should go ahead with it.”
Yoo Jae-won declared.
—What? Say that again. You want me to do it?!
Jeon Myeong-heon sounded delighted. He had expected Jae-won to object like everyone else. The fact that he had called anyway suggested he had harbored a small hope that Jae-won might offer a different perspective. That hope had been as slim as winning the lottery.
“Yes! If you're going to do it, you should do it big and spectacular enough to shock the entire political world. And if you ever need my help, just say the word.”
He had not merely spoken; he had shouted it with conviction.