Chapter 37
Chapter 37
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Translator: Vine
Chapter: 37
Chapter Title: Damage Control
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“What do you mean? Nokid Martin refused to renew the parts supply contract?”
The first thing I heard upon entering the main office was news of a crisis at Jaewoo Aerospace.
More precisely, it was the news that Nokid Martin would no longer recognize Aerospace as a parts supplier.
It was so sudden that I couldn't begin to piece together what had happened.
“You know Hyun-cheol returned from Ukraine the day before yesterday, right?”
“Yes, I heard about that. What does that have to do with this?”
“Then you also know they agreed to the merger?”
“…”
That was news to me.
Frankly, Jin Hyun-cheol wasn’t the type to report such things to me first.
And with how busy I’d been, I didn’t have the capacity to worry about Aerospace.
But what could a successful contract have to do with this incident with Nokid Martin?
“That’s good news. But why is that a problem…”
As I spoke, a thought struck me.
The ones who would be most on edge if we acquired Motor Sich would be the American aviation companies.
Perhaps, just as I’d anticipated, the pressure had begun.
“Don’t tell me it’s because of the merger.”
“As of now, there’s no other explanation. We’ve had no issues until now, and for them to suddenly notify us that they won’t extend the contract just six months before renewal makes no sense.”
Even I had to admit that was the only logical explanation for such an abrupt refusal.
After all, this was essentially the equivalent of Samjung Group encroaching on the American bread-and-butter of CPU design. They wouldn’t just stand by and watch.
“But to go this far when we haven’t even announced the merger… Where is my brother now?”
“Hyun-cheol is trying to negotiate with Nokid Martin. The problem is, they’re refusing to engage in any dialogue.”
It seemed they were seriously displeased.
Cutting off communication and refusing to provide a reason to a long-standing business partner with no prior issues was, by any standard, illogical.
The only way to get them to the table now was to bring in someone they couldn’t refuse.
“Just a moment.”
I excused myself and glanced at my watch.
Thankfully, it should be daytime in Washington D.C. by now.
I was about to call Michael when I stopped, remembering something, and looked back at Chairman Jin.
“By the way, are you feeling better now?”
“I’m much better, so don’t worry about it.”
Now that I looked, his complexion did seem much more relaxed than before.
So why did I still have this nagging feeling?
Something about the way he sat in his chair, completely still, felt suspicious.
“Don’t mind me. Just do what you need to do.”
“Ah! Then, just a moment.”
His words snapped me back to reality, and I called Michael.
The phone rang a few times.
Soon, a familiar voice came from the other end.
[Well, well, I never thought I’d see the day Mr. Jin called me first.]
[I’m sorry to call so suddenly, but I have a favor to ask.]
[A favor from Mr. Jin? This is nerve-wracking. Go on, I’ll help if it’s within my power.]
The call with Michael went on for some time.
The funny thing was, unlike at the start, the energy in his voice gradually faded.
The moment the name “Motor Sich” came up, he let out a sigh as if he’d been expecting it.
[Tsk, tsk. So it’s come to this. To be honest, I was quite concerned when I heard Jaewoo Aerospace was trying to acquire Motor Sich. I debated whether I should advise against it.]
[I understand what you’re trying to say. But is there any way to resolve this situation?]
[It’ll probably be difficult on my end. As you know, Mr. Jin, the American defense contractors are incredibly powerful. Why else do you think I had to ask you for that favor when I imported the armor-piercing rounds last time?]
[What if we were to give up on the merger?]
[I was hesitant to bring it up myself, but that’s probably the best course of action right now.]
For Michael, who had an inside track on the US defense industry, to speak so definitively, the answer was all but set in stone.
I was about to end the call to update Chairman Jin on the best course of action when he spoke again.
[Actually, I’d been hearing for a while that Nokid was concerned about Korea’s technological prowess.]
[Why is that?]
[It’s about the supersonic advanced trainer jet that Nokid and KAI are co-developing. They used to dismiss KAI, but now that KAI has already succeeded in producing the fuselage, they’re starting to get wary. And with Jaewoo stepping in to acquire Motor Sich on top of that, how could they be at ease? In any case, I’m just sorry there’s nothing I can do to help.]
Michael repeated his apologies before hanging up.
For him to say that meant the situation was more serious than I thought.
Deciding it was crucial to nip the problem in the bud, I immediately spoke to Chairman Jin.
“Let’s give up on the merger for now. If we had the power to stand up to them, it’d be a different story, but right now, that’s our only option.”
“We’ve already communicated our intent to abandon the merger. Just in case they doubted our sincerity, we also notified Motor Sich this morning that the deal was off.”
“And they still won’t budge?”
“That’s why this is so serious. Dammit, it’s like they’re determined to punish us for the audacity.”
If that was the case, this wasn’t just a warning.
It meant the matter wouldn’t end with simply not renewing the contract.
Suddenly, an ominous premonition began to creep up on me.
“Tsk, in the end, it’s my fault. To have provoked the US defense industry when we’re so fragile we tremble at a single cough…”
Chairman Jin blamed himself for not foreseeing this situation.
Or rather, he might have considered the possibility, but he likely never imagined the pressure would come so swiftly and decisively.
To be honest, I was just as flustered by their rapid response.
“Chairman!”
Just then, one of the secretarial staff knocked on the door, her voice urgent.
The female secretary who entered immediately turned on the TV on one side of the office. The news program currently airing was reporting on the termination of the parts supply contract between Nokid Martin and Jaewoo Aerospace.
“How did this get out so fast…”
Stunned, I looked at Chairman Jin.
As if he had expected it, he spoke without a change in expression.
“It must be Nokid’s doing. Tsk, so they’re determined to see this through to the end. I’m worried about what’s to come.”
“…”
******
The next day, Chairman Jin’s fears materialized, starting with the stock market.
Jaewoo Aerospace’s stock price began to plummet.
The impact naturally spread to its holding company, Jaewoo Thales, and the stock price, which had been holding steady thanks to recent positive developments, went into a nosedive.
“The short sellers have piled on, making the decline excessively steep.”
Most of those short sellers were likely American.
In other words, this was the work of factions connected to Nokid Martin.
It seemed they had decided to crush a potential future competitor before we could even get on our feet.
“If hot money starts riding the short-selling wave, then…”
At the emergency executive meeting that was hastily convened, the falling stock price was the sole topic of conversation.
As a result, Jin Hyun-cheol’s position was untenable.
Perhaps conscious of this, he skipped the key executive meeting altogether, focusing solely on trying to persuade Nokid Martin.
“For now, I believe we should attempt to buy back and cancel at least a portion of our shares.”
The finance director’s words cast a somber mood over the room.
The stark contrast to their situation just a short while ago seemed to fill them with a sense of self-reproach.
Just then, CEO Yoon of Thales, who had been listening quietly, raised his hand and voiced his opposition.
“A share buyback and cancellation would only be a temporary stopgap. Given the intensity of the pressure, the short sellers involved are clearly not small-time players. How many days of effect do you think that would really have?”
“Then do you have another solution, CEO Yoon?” the finance director asked, his expression one of frustration.
At that moment, CEO Yoon glanced at Chairman Jin, who gave a slight, almost imperceptible nod.
“First, the primary responsibility for this situation lies with the chief executive of Aerospace. While one could argue it’s not entirely CEO Jin Hyun-cheol’s fault, that’s how it has turned out. Therefore, to quell external discontent, we must also make a gesture that will reassure the market.”
“What kind of…”
“First, we need to make the decision to dismiss CEO Jin Hyun-cheol from Aerospace. Additionally, the Chairman should also temporarily step back from day-to-day management, and we must put forward a reliable face to stabilize the market.”
“…”
In that instant, everyone in the room turned to look at me as if on cue.
Flustered, I turned my gaze to Chairman Jin, but he simply kept his eyes closed.
“Are you suggesting we put Senior Managing Director Jin Hyun-seung forward as the face of the company?” one of the directors challenged.
“That’s right. As you all know, Senior Managing Director Jin Hyun-seung’s impact on Thales has been immense. The market is well aware of this. So, if we take this opportunity to publicly establish him as the clear successor to Thales, wouldn’t that be enough to turn the tide?”
“But it makes no sense for the Chairman to step down as well!”
Several directors voiced their objections to that.
CEO Yoon, as if expecting this, continued calmly.
“You seem to have misunderstood. I’m not suggesting the Chairman step away completely.”
“If the Chairman doesn’t step down, how can we claim it’s a management overhaul? We could be accused of putting on a mere show.”
“That’s a possibility. However, I believe a sudden change in the group’s leadership could create even greater side effects. That’s why I propose we dramatically increase Senior Managing Director Jin Hyun-seung’s stake as a signal to the market. As I said, we need to give them confidence that, at the very least, the succession plan is solidified.”
“That would mean transferring more of the Chairman’s shares to the Senior Managing Director. How much, exactly?”
“A minimum of ten percent. That would create a significant gap between him and the third-largest shareholder, which should be sufficient to establish him as the successor.”
CEO Yoon immediately looked to Chairman Jin as he spoke.
Could this have been pre-arranged?
Chairman Jin, who had kept his eyes closed the entire time, finally spoke, lending weight to CEO Yoon’s words.
“That’s not a bad idea.”
“…”
A flicker of bewilderment crossed the faces of those present.
But Chairman Jin paid them no mind and questioned CEO Yoon further.
“Then what would Hyun-seung’s total stake become?”
“Senior Managing Director Jin Hyun-seung currently holds a total of twelve percent of Thales stock. If you, Mr. Chairman, were to transfer ten percent, he would secure a total of twenty-two percent.”
If that happened, it would send a clear signal to the market.
There was no better news than the confirmation of a reliable successor.
The announcement could serve as a pretext for friendly forces to launch a counterattack.
“I’m in favor.”
Just then, one of the directors cast a vote of support for CEO Yoon’s proposal.
Following his lead, affirmative glances were exchanged around the room, and soon the atmosphere began to shift toward accepting the proposal.
“I have no objection to CEO Yoon’s proposal either. However, to stop the precipitous decline of our stock price, we must first attempt a turnaround with a share buyback.”
The finance director insisted on the share buyback to the very end.
He had a point; it was the most certain way to boost the stock price in the short term.
Just as I was about to nod in agreement, CEO Yoon intervened again.
“I understand your point. But if we’re just going to buy back shares and cancel them all, isn’t that the same as throwing money into the air? Do we even have the financial capacity for that?”
The finance director was at a loss for words.
The mood in the room grew solemn once more.
Sensing an opportunity, I pulled the microphone closer.
“A company share buyback might be out, but a major shareholder buy-in is possible.”
“…”
“Since I’m going to be the face of this anyway, I don’t think it would be a bad idea to increase my stake a little more. In that spirit, if the board members here approve, I will use my personal funds to purchase some of the shares. Wouldn’t that have the same effect as a company buyback?”
I hadn’t wanted to take advantage of a situation like this.
But to let a heaven-sent opportunity like this pass by would make me a fool.
“That’s an excellent idea. A major shareholder buy-in is practically good news in itself. And there are no legal issues in this case.”
The finance director’s face lit up as he spoke.
A quick glance at Chairman Jin revealed his expression wasn’t entirely dark either.
Finally, he looked at me and asked.
“Do you have the funds to buy them?”
“You know the answer to that better than anyone, Chairman.”
“Hmm, well, that is…”