The Acquisition of Korea Aerospace (Part 2)
After following Taesik into the president's office, interim president Jo Yun-je sat down in the seat Taesik offered. "Why did you appoint me as the interim president? I am still just a director, and there are many more capable people above me."
"If the people above you are a nuisance, shall I accept the resignations of everyone at the director level and above?"
"……."
"The reason I appointed Director Jo Yun-je as president is because you have the right perspective on the limited export strategy of the T-50. Without reinforcing its armament capabilities and performance, there is no hope for the future."
Taesik, having known during his time at the Defense Research Institute that the T-50 aircraft had limitations as both a trainer and a tactical attack aircraft, hoped that President Jo Yun-je would overcome those hurdles.
"As you know, Representative, we need Lockheed Martin's consent to enhance the armament capabilities."
President Jo Yun-je pointed out that because the T-50 was produced through technical cooperation with Lockheed Martin, Korea Aerospace could not modify it at will. Taesik smiled and replied.
"I am the one who must resolve those limitations. President Jo, you only need to establish a plan to develop Korea Aerospace—or rather, Starlink Aerospace—from here on out."
Lost in thought, President Jo Yun-je pondered for a moment before asking, "Then, on the premise that there are no restrictions regarding funding or Lockheed Martin, may I plan the things I want to do?"
"Yes. If it is a plan to develop Starlink Aerospace, anything is possible. For your reference, please also consider installing an AESA Radar on a derivative of the T-50 advanced trainer. Starlink Defense is currently modifying a small-scale AESA radar."
"Modifying...? Has the source technology already been developed?"
"Yes. Once the negotiations with Lockheed are concluded, we plan to install it on the T-50 immediately."
President Jo Yun-je was astonished to hear that they possessed the AESA radar technology used in the F-22 currently being developed in the United States. "Then I will begin establishing the modification plan for the T-50 aircraft."
"Please include unmanned aerial vehicles in your plan as well. And you must personally handle the executives who lack professional competence. Can you do that?"
"Since the former bureaucrats are gone, there is no problem. May I decide as I see fit?"
"Of course. However, since you are also subject to monthly performance evaluations, you must not abuse your authority."
After instructing President Jo Yun-je to arrange a negotiation meeting with Lockheed Martin regarding the T-50, Taesik left the office to tour the factory. The union members who had been protesting at the front gate earlier saw Taesik leaving the main building with President Jo and requested a meeting to discuss their grievances. Taesik conveyed his intention to hold a meeting after he had finished inspecting the factory.
The factory was mainly producing parts for the KT-1 basic trainer and the T-50, as well as civilian parts that had been subcontracted to them.
"What are the civilian parts currently being produced?"
"We are producing parts that were subcontracted from a Japanese company, which in turn received the subcontract from Boeing, the aircraft manufacturer."
"Why did you accept a secondary subcontract?"
"Boeing only distributes volume to companies that invest in their aircraft development, and since we didn't invest, we are in a situation where we cannot receive orders directly."
"What is the ratio of civilian work?"
"Less than 10%."
"If it’s a secondary subcontract, isn't it almost at a loss?"
"Fortunately, we make about a 1% profit. We accept the orders from the Japanese company because it's better than leaving the workers idle."
After touring the factory, Taesik headed to the conference room where the union was waiting. The union members, wearing red headbands, greeted him.
"I am Kim Taesik, the representative who acquired Korea Aerospace. You requested a meeting with the union; what is the agenda?"
A man who appeared to be the union representative took the microphone. "The union's demands are twofold. First, a promise of employment succession, and second, a 7% wage increase. Our wages have been frozen since the IMF crisis, and we are all still struggling to recover from that shock."
Taesik, who had already promised employment succession, replied, "It seems the word hasn't spread yet. I have already promised 100% employment succession for the staff. As for the 7% wage increase, it is difficult to answer immediately. Interim President Jo Yun-je here will be establishing a management strategy, and if that strategy is achieved, there is room to review your condition. I believe it is unreasonable to demand a wage increase without results."
The union representative whispered with the other members before asking, "Did you really promise employment succession?"
"Yes. I will put it in writing if necessary. However, there will be no employment succession for the executives. The former bureaucrats have already had their resignations accepted, and I intend to decide on the other executives after reviewing their performance on a monthly basis."
The union members were delighted to hear that Taesik would provide a written promise of employment succession, and the representative continued to mention the conditions for the wage increase again.
"You said there would be no wage increase if the management goals aren't met, but it seems clear that if you establish impossible goals, our demands will be rendered void."
"Hmm... let's do this. Join in on the management strategy that President Jo will establish. If you participate in creating the strategy alongside the management, wouldn't we be able to reach a compromise? President Jo, please include the union in the establishment of the management strategy."
President Jo nodded immediately, and the union members were pleased that they were being allowed to participate in the strategy-making process. Taesik smiled inwardly, watching the union members who seemed to view management strategy as an easy task, and said his final words.
"I hope we can cooperate with each other to develop Starlink Aerospace."
After finishing his first meeting with the union, Taesik returned to Seoul to give President Jo time to establish the strategy. Soon, President Jo Yun-je reported that an appointment had been made with Lockheed Martin. Lockheed requested the meeting in the United States, and Taesik readily accepted and headed to America.
Upon arriving in the U.S. and visiting Lockheed, Taesik saw the East Asia marketing director who had come to greet him and sensed that the negotiations would not be easy. After exchanging business cards and sitting down, Director Lucas opened the conversation.
"You must be the person who acquired Korea Aerospace. We received a request to negotiate regarding the T-50 aircraft with Lockheed; what specifically do you wish to negotiate?"
"I want to acquire the 13% stake in the T-50 that Lockheed holds."
"Yes...? You want to acquire our stake?"
"Yes. Korea Aerospace—or rather, Starlink Aerospace—intends to break free from Lockheed's influence and independently modify the aircraft."
"Hasn't the T-50 not even delivered its first mass-produced unit yet?"
"Lockheed only needs to receive compensation for the 13% stake, right? 13% should be worth about 200 million dollars."
"This is not a matter I can decide on my own, so please wait a moment."
Lucas was flustered by the mention of paying off the T-50 development costs held by Lockheed in a lump sum and requested a short break. While Taesik spent time drinking coffee, Lucas returned with the Lockheed representative.
"I am Bernard, the representative of Lockheed. I heard you want to acquire the T-50 stake."
"Yes. Starlink Aerospace intends to break free from Lockheed's technical constraints."
Bernard, lost in thought for a moment, seemed to recall something. "Aren't you the person who sold the AESA radar to Dacian? I heard you were doing satellite-related business in Korea……."
Taesik decided to open up, realizing that Bernard already had information about him.
"It seems you are aware of my background. I intend to reinforce the T-50 derivative aircraft with an AESA radar and enhanced armament capabilities. Currently, I am constrained by everything, including the fire control computer, so I want to settle the development costs and remove those restrictions."
"I understand that the AESA radar held by Dacian cannot be installed on low-end aircraft……."
"We have already begun the miniaturization process. Now, please make a decision. I will pay the development stake costs regardless of how much you demand."
Representative Bernard was surprised by the mention of installing an AESA radar on the T-50 and continued his response.
"Representative Kim, even if we receive the development costs, it only amounts to 300 million dollars. Instead, why don't we establish a joint venture, as we will accept all the modification requests that Starlink Aerospace demands?"
"A joint venture?"
"The F-16, the parent of the T-50, still dominates the global market. Once the F-22 and F-35 aircraft are released, they will take the place of the F-16, and it is my judgment that if we install an AESA radar on the T-50, its marketability will expand. Let's establish an export company together with Lockheed."
"Hmm... so you're saying we should establish an export company and distribute the profits according to the development costs. Then, what will you do about the F-16?"
"Naturally, we must continue to produce it. As you know, there are countries to which the U.S. government does not permit exports. The T-50 will be exported to those countries where the U.S. government does not permit exports. How about it?"
Taesik weighed the pros and cons and replied, "I will accept if Lockheed covers all costs associated with future armament capabilities and the design changes of the components that go into the AESA radar."
President Bernard immediately reached out to shake hands. "Good. I accept your proposal."
After finishing the negotiations, Taesik immediately explained the results to President Jo Yun-je of Starlink Aerospace. President Jo was surprised and delighted that the meticulous Lockheed had accepted Taesik's proposal.
"Representative, how did you get those guys at Lockheed to accept your proposal?"
"They knew I was the seller of the AESA radar I sold in the U.S. They chose collaboration over competition. And since Lockheed will bear the design costs related to armament capabilities and AESA radar installation, please make full use of it."
"Hahaha. If there are no restrictions, we must make full use of it. When do you plan to return to Korea?"
"Why? Is there something urgent?"
"I have to have my homework checked by you, Representative. I intend to report the management strategy. I will report it reflecting today's negotiation results."
"I plan to return in two days, so I will see you then."
Taesik immediately moved to the Starlink Map and checked the progress of the global electronic map creation that Saein was conducting. Saein was delighted, reporting that the first advertising revenue had come in from Googol, and Taesik instructed Saein to expand the territory to the Southeast Asian region.
"Saein! A world where computers fit in the palm of your hand will soon unfold. At that time, the value of Starlink Map will be vastly different from what it is now."
"Hahaha. Since you predict it, such a world will probably come soon. I find the story that the value of Starlink Map is rising much more joyful than the future in science fiction."
Saein, taking Taesik's words as a joke, focused only on the fact that the company's value was rising. Taesik, preparing for the upcoming emergence of smartphones, made up his mind to meet Mike, the legendary founder of A-ple.