Second Restructuring
Unlike the first presidents’ meeting Kim Seong-ho had attended, many seats stood empty today.
Most of those vacancies belonged to companies that had vanished through sales, mergers, or liquidations—more than twenty of them in all.
The presidents who still occupied their chairs could not help staring at the empty places and wondering whether their own futures were just as precarious. They held their seats for the moment, yet none of them felt certain they would still be present at the next meeting. The atmosphere in the room was therefore heavier than it had ever been.
“Did you all just come back from some funeral I don’t know about?”
Chairman Lee Tak-hyeon seemed to sense the mood as he looked around at the assembled presidents.
“Or does everyone have some family trouble at home? Why the long faces?”
“No, sir.”
Vice Chairman Lee Mun-jong stepped forward on behalf of the group.
“With the economy looking so precarious, I believe everyone’s faces have simply darkened with worry.”
Lee Tak-hyeon nodded as though accepting the excuse.
“True enough. It is concerning. Hey, Director Kim.”
Thanks to the empty seats, Kim Seong-ho now sat farther forward than at the previous meeting. Lee Tak-hyeon called out to him.
“Before we begin, give us a brief rundown of the current situation.”
At the chairman’s order, Kim Seong-ho rose and began addressing the presidents about the state of the Korean economy.
“Since the bankruptcy of the Dubo Group early this year, the chain of corporate collapses has shown no sign of stopping. The Bumi Group followed Dubo into bankruptcy, and the Seongro Group is currently under a debt moratorium awaiting sale. SL Foods and Padopa Department Store have also gone under, and the Haechi Group is in final bankruptcy status, waiting for court rehabilitation. And only recently…”
Kim Seong-ho glanced briefly at Lee Tak-hyeon and at Chief of Staff Hwang Do-beom standing behind him before continuing.
“Rumors of Doa Motors’ insolvency have finally surfaced.”
“Doa Motors? Even Doa Motors is going under?”
“Doa Motors is collapsing?”
A stir ran through the presidents.
In a short span Kim Seong-ho had recited the names of six failed companies, from Dubo to Haechi. Aside from Dubo, which had ranked just outside the top ten, the others had all sat toward the bottom of the corporate hierarchy. Doa Motors was different.
“Isn’t Doa ranked eighth? And you’re saying it’s going under?”
Lee Mun-jong stared at Kim Seong-ho with open disbelief. Then he suddenly recalled that Chairman Kim Seong-mun of Doa Motors had visited the Pyeongchang-dong residence and turned to Lee Tak-hyeon.
“Chairman, then the day Chairman Kim came to see you…”
“That’s right. He came to ask me for help.”
“Then… Doa really is going under?”
Lee Mun-jong felt his thoughts begin to tangle. Something clicked, and he shot to his feet.
“Then we should just acquire Doa ourselves, shouldn’t we?”
The other presidents clearly shared the same thought; every eye turned toward Lee Tak-hyeon. Receiving their collective gaze, the chairman spoke to Kim Seong-ho.
“I thought the same thing. So I asked Director Kim… Director Kim, tell the presidents exactly what you told me.”
At the order, Kim Seong-ho turned to the room and repeated the assessment he had earlier conveyed to Lee Tak-hyeon through Hwang Do-beom.
“I fully agree that Doa Motors is a company we must eventually acquire. But not now. With time, an opportunity will come to take it over at a better price and from a stronger position. Time is on our side; for the present we should simply wait and watch.”
“And if we wait and lose it?”
Lee Mun-jong’s face took on the urgent look of a child standing outside a toy shop as he pressed Kim Seong-ho.
Kim Seong-ho answered with absolute certainty.
“There is no chance we will lose it.”
“What do you mean by that? How can you be so sure? How many others are eyeing Doa Motors? Chairman Kim Woo-ha of the Seonwoo Group alone won’t sit still. Isn’t that right, Chairman?”
Lee Mun-jong sought agreement from Lee Tak-hyeon. The reply he received, however, was not the one he had hoped for.
“Sit down. You don’t need to shout; everyone here can hear you just fine if you speak calmly.”
Realizing he had grown excited, Lee Mun-jong took his seat. Yet even after the heat of the moment faded, his conviction remained unchanged. Still seated, he pressed Lee Tak-hyeon again.
“Chairman, we have to take Doa Motors no matter what. If we absorb it, Ilhyeon Motors becomes, without question, the finest automobile company in the country. We would also reach our target of exporting one million units a year. Selling a million units overseas would give us the foothold we need to expand our foreign markets.”
“Do you think I don’t know that?”
Lee Tak-hyeon still looked displeased as he answered, then turned back to Kim Seong-ho.
“Hey, Director Kim. Convince this vice chairman for me. Explain why acquiring it now would be a mistake.”
Lee Mun-jong suddenly understood that the decision on Doa Motors rested not with Lee Tak-hyeon but with Kim Seong-ho. When he turned to look, Kim Seong-ho was already addressing both him and the entire room of presidents, laying out why remaining still was the wiser course.
“The acquisition price of Doa Motors will continue to fall. Buying it now is therefore not a good choice.”
“What are you talking about? Why would the price keep dropping?”
Lee Mun-jong again spoke for the group.
Kim Seong-ho gestured to Jo Byeong-jin, who had accompanied him to the meeting, and answered.
“The Korean economy will keep collapsing, and more and more assets will come onto the market. Just as prices fall in a free market when competing goods increase, the same will happen with Doa Motors. The reasons are detailed in the documents we are handing out.”
Still looking unconvinced, Lee Mun-jong was about to question him further when he accepted the document Jo Byeong-jin offered and shifted his gaze to the page.
At Kim Seong-ho’s signal, Jo Byeong-jin had begun distributing the materials to every president present. Lee Mun-jong scanned the contents, rubbed his eyes, then lifted his head with an expression of sheer disbelief. He looked around and saw that every other president wore the same stunned face and was making the same gestures.
Kim Seong-ho regarded them and spoke.
“The materials just distributed are a report on shifts in overseas markets. For the past several months the Restructuring Headquarters has closely monitored those changes and discovered certain anomalies we now wish to share.”
Lee Mun-jong stared down at the report as though he could not possibly believe it, then looked up at Kim Seong-ho.
“So you’re saying that because of these overseas anomalies, the entire Korean economy is going to collapse…?”
“Yes. Korea is about to face an unprecedented crisis—one we have not experienced since the war.”
Hearing the reply, Lee Mun-jong lifted his eyes and recited what he had just read.
“You’re saying the exchange rate could nearly double from where it stands now? And you expect us to believe that?”
Instead of answering the question directly, Kim Seong-ho simply continued his presentation.
“With that forecast in mind, I will now report the results of the Restructuring Headquarters’ first-round restructuring.”
He looked around at the still-startled presidents of the Ilhyeon Group and began in a calm, measured voice.
“Through restructuring, the Ilhyeon Group’s roughly eighty-two affiliates have been reduced to fifty-six. Ten are in the process of sale, five are in liquidation, and the remaining eleven have been absorbed into existing affiliates. Approximately twelve thousand employees have left Ilhyeon, while twenty-one thousand five hundred have been reassigned. Assets totaling 2.5 trillion won have been liquidated, securing roughly 1.3 trillion won in liquidity, and—”
“Wait!”
Lee Mun-jong cut him off, rose once more, and shouted at Kim Seong-ho.
“I understand the restructuring results… Now finish what you were saying earlier. So because the Korean economy is going to collapse, we shouldn’t acquire Doa Motors now but later? Have I understood you correctly?”
“Yes. Exactly.”
Kim Seong-ho nodded and continued.
“Dubo, Bumi, Seongro, Haechi, and now Doa… these are only the beginning. Far more companies will fall from here on. And those fallen companies will come onto the market desperate to recover even the smallest amount of capital. Under those conditions Doa’s price will naturally drop, so there is no reason to buy it now.”
He met the eyes fixed upon him and spoke again.
“Through restructuring we have built up our strength and trimmed the fat, giving ourselves ample capacity to respond to what is coming. With the liquidity secured from the sale of 2.5 trillion won in assets, we will proceed to the second round of restructuring. Compared with the first round, the second—”
“Second round? What second round?”
Lee Mun-jong interrupted once more. When he failed to understand, his true nature—cutting others off and talking over them—emerged in full.
Lee Tak-hyeon frowned at the display. Kim Seong-ho, however, answered as though long accustomed to it, a faint smile on his face.
“Restructuring is not only about cutting staff and selling assets. Expanding businesses is also a form of restructuring.”
“So what is the second round, then?”
“Having conserved our strength and filled our pockets, there is only one thing left to do, is there not? Pick up the cheap goods that appear on the market and put them in our pockets. That is the second plan.”
“Picking up cheap goods from the market… that means…”
“We plan to acquire Doa Motors at that time, so please wait a little longer. And you need not worry about the Seonwoo Group snatching it first.”
“Why is that?”
“If the exchange rate doubles from its present level, the Seonwoo Group—heavily dependent on overseas borrowing—will inevitably face serious difficulties of its own.”
“Face difficulties? You mean…”
Lee Mun-jong trailed off and simply stared at Kim Seong-ho. A single word had risen in his mind from everything he had heard, yet uttering it in front of the entire gathering was something even he found difficult. The Dubo Group, once just outside the top ten; Doa Motors, ranked eighth—those two alone were startling enough. To speak of the Seonwoo Group, which had long traded places with Ilhyeon for second and third in the corporate rankings, was something Lee Mun-jong himself hesitated to do.
When Lee Mun-jong’s mouth stopped, Lee Tak-hyeon’s finally opened.
“Are you finished?”
“What? Ah…”
Only then did Lee Mun-jong come back to himself. Lee Tak-hyeon watched him sit down awkwardly, glancing around as though suddenly aware of his surroundings, and regarded him with open contempt.
“If you have further questions, ask Director Kim later, privately. This is a regular presidents’ meeting—what do you think you’re doing? Tsk.”
He clicked his tongue and gestured toward Kim Seong-ho.
“From now on, no matter who tries to interrupt, don’t stop. Keep going.”
Kim Seong-ho inclined his head slightly.
“Yes, sir. Understood.”
He raised his head and signaled Jo Byeong-jin. The lights dimmed, and a projector cast an image onto the front screen. Pointing to the graph that appeared, Kim Seong-ho began the formal mid-term report of the Restructuring Headquarters in earnest.
When Kim Seong-ho finished his presentation at the presidents’ meeting, the heads of the Ilhyeon affiliates raised their thumbs in praise.
“I never knew Director Kim could present so well. Impressive.”
“You have as much talent for presentations as you do for restructuring. I’m seeing you in a new light, Director Kim.”
“Think you could teach that skill to our kids? On paper they sound fine, but the moment they stand up and actually speak they just stammer and fumble—drives me crazy. When you have time, gather them and show them how it’s done.”
Kim Seong-ho offered his thanks to the affiliate presidents, then looked toward Lee Gyeong-eun standing off to one side. She was watching him with a face as bright as if she herself were the one receiving the compliments.
Once the presidents had moved on, Lee Gyeong-eun approached and spoke in a voice full of excitement.
“How do you speak so well?”
“Did you think I couldn’t?”
“Oh, come on. I know better than anyone that you speak well. But that’s when it’s just the two of us. I never imagined you’d be this good in front of so many people. You’re really amazing.”
She slipped her arms around him lightly and stroked his back with warm affection.
“I must have a good eye for men.”
“Not at all. I’m the one with the good eye for women.”
“Oh, you.”
Lee Gyeong-eun gave his chest a shy little tap, then turned her head, unable to meet his eyes directly.
“Huh?”
When she looked away she caught sight of Lee Tak-hyeon scolding Lee Mun-jong.
“Dad looks really angry.”
Even from a distance the chairman’s fury was plain, and the fragments of his voice that carried over made the intensity of that anger unmistakable.
Kim Seong-ho followed her gaze toward Lee Tak-hyeon and Lee Mun-jong, then leaned close to her ear and spoke quietly.
“I should go help my brother-in-law. I think I need to throw a little water on the fire.”
“Water?”
Lee Gyeong-eun turned to him and instantly understood what he meant.
“Ah! Yes, Seong-ho. Hurry and put out the fire on Dad.”
She gave his back a light push of encouragement.
“We’ll talk about the rest at home later. I’m heading off now.”
She waved to him. Kim Seong-ho waved back as she stepped away. Lee Gyeong-eun flashed him a bright smile, then turned and left.
Kim Seong-ho watched her go for a moment before setting off toward Lee Mun-jong and Lee Tak-hyeon. As he approached the place where Lee Mun-jong was still being thoroughly berated, he murmured under his breath.
“I think I’ll go check what happens when you throw water on a fire that’s burning oil.”
He pressed the corners of his mouth down so the smile would not rise, then walked toward where Lee Tak-hyeon stood.