Chapter 765 Acquisition Intentions and Union Issues

"Boss, although you hate Koreans, I think Ssangyong Motor is still worth acquiring. Do you need to consider it carefully?" Wu Zhi Xiaoji created the automobile manufacturing company of Fanshi Investment Group. He has a special liking for this industry and is always thinking about expanding it. Therefore, he is more interested in the acquisition of Ssangyong Motor.

The reason why Ssangyong Motor proposed the intention to be acquired this time is mainly because it was severely affected by the Southeast Asian financial crisis. The entire Korean financial and economic sectors have been hit hard, especially the automobile manufacturing industry, which is more affected by the environment. It is the hardest hit area.

Since the second half of 1997, the Korean economy has been in a serious financial crisis. After more than two years of efforts, the Korean financial market has basically recovered and stabilized, the foreign debt structure has tended to be reasonable, exports and foreign investment have increased, the unemployment rate has dropped, and the economy has shown a strong recovery momentum. This year's GDP growth rate is expected to reach 10 percentage points.

The reason why the Korean economy was able to get out of the predicament of the financial crisis in such a short period of time was that it rejected the huge aid from the International Monetary Fund with harsh conditions, and obtained huge foreign exchange support through private cooperation between Samsung Group and Fan Wubing. It expanded exports and suppressed imports through devaluation of the local currency. In addition, the world economic growth rate rebounded, which quickly improved the balance of payments. The deeper reason is that it took advantage of the huge pressure of the financial crisis to form a consensus and cohesion among the people and accelerate the adjustment of the economic structure.

Before the crisis, South Korea implemented a government-led market economic system. With the improvement of the level of economic development in South Korea, economic activities have become increasingly complex, and the international economic environment has changed and competition has become increasingly fierce. The drawbacks of this system have become increasingly apparent, and the accumulated problems have become increasingly serious, and finally a serious financial crisis broke out.

Before the financial crisis, many large Korean business groups blindly implemented a diversified business strategy, which not only made the advantages of the core competitiveness of each group not prominent, but also increased business risks, becoming an important reason for the financial crisis to put enterprises in trouble.

To solve this problem, under the promotion of the Korean government, the five major business groups exchanged between important industries such as refined oil, chemicals, semiconductors, railway locomotives, aircraft, electrical equipment, and ship engines.

For example, in the semiconductor industry, before the replacement, there were three major groups: Samsung, Hyundai, and 1G. After the replacement, 1G's semiconductor companies were merged by Hyundai.

The automobile industry originally had five companies: Hyundai, Kia, Ssangyong, Daewoo, and Samsung. The government required automobile production to be concentrated in Hyundai and Daewoo.

All kinds of companies have merged, sold, and liquidated subsidiaries that are not directly related to the main business.

Although this adjustment encountered resistance from companies and was very difficult, and some measures did not achieve the expected goals, it has made progress overall and enhanced the core competitiveness of companies.

After the financial crisis,

the Korean government and companies increased their investment in science and technology and development, enabling Korea to have independently developed and world-leading technologies in high-tech fields such as semiconductors, mobile communications, computers, and networks. Strong competitiveness has been formed.

This year, South Korea's information and communication product exports amounted to nearly 40 billion US dollars, with a surplus of more than 14 billion US dollars. It is estimated that by the end of this year, the length of optical cables laid in South Korea will reach 80,000 kilometers, and more than 10 million people will be online.

The role of high-tech development in South Korea's economic recovery is very obvious, but the prospects of Ssangyong Motor are not very optimistic at this time. They mainly produce diesel-powered vehicles, but the current international oil prices have been rising, which has a great impact on them. In particular, Ssangyong Motor does not agree with the government-led view of acquiring Hyundai or Daewoo, but is very resistant to it, which makes Ssangyong Motor, which is already in crisis, even more difficult.

"Although diesel-powered passenger cars occupy most of the automobile market in the international market, the development of diesel vehicles in China is currently very slow, and diesel passenger cars only account for about 1% of the new car market each year. After comparing the development trajectory of diesel vehicles in developed countries, it is not difficult to find that the Chinese diesel vehicle market is still a new territory that needs to be opened up. As environmental protection issues are deeply rooted in people's hearts, diesel vehicles are receiving more and more attention and support from national automobile industry policies, and there is huge potential for future development." Wu Zhi Xiaoji lobbied Fan Wubing, "This year, SUV sales have grown rapidly. With the change of consumer concepts, SUVs will gradually enter the middle class. For families of the upper and lower classes, the concepts of energy conservation and environmental protection are increasingly on the agenda. Ssangyong's SUVs are also getting better. As a world-class diesel-powered SUV expert, I think the acquisition of Ssangyong Motor is obviously a good move. "

Fan Wubing knew that Wu Zhi Xiaoji didn't know much about Korean affairs and only considered this matter from a technical perspective, so he said to him, "If it were in other countries, I would still seriously consider it, but for Korean companies, basically we can not discuss this acquisition issue. "

"Why?" Wu Zhi Xiaoji asked back in confusion.

"The Korean trade union organization is too strong." Fan Wubing replied.

The investment environment in Korea is not as good as imagined. Facts have proved that many companies lack sufficient understanding of the Korean business environment, especially the Korean trade union culture.

In the years of conflict, friction and struggle with the capital side, the Korean trade unions have abandoned the traditional general interests of labor wages and moved towards management, power and politics.

What this has brought about is no longer the maintenance of the status and functions of a labor interest representative or spokesman, but a qualitative transformation into a manager, power holder and political institution.

People who are familiar with Korean trade unions believe that Korean trade unions are powerful, but most of them do not clearly see that the power of Korean trade unions is no longer as a trade union organization, but as a management agency, a power agency, and a political organization. Just think about it, with such a special power, which other country’s traditional trade unions can compare with it?

From the point of view of the union's rise to power, this brings with it the possibility of corruption and scandal. In recent years, bribery and other corruption incidents have increased significantly in Korean trade unions. This is directly related to the fact that they have obtained considerable power after demanding power and have no power restriction mechanism.

As for trade union organizations entering the political arena, this is completely contrary to the traditional functions of trade unions, when trade union organizations have won certain status in politics. Its status as a representative or spokesman for labor interests has naturally weakened. Because it must be based on the production of a group of politicians whose performances on the political stage are labor representatives only when they need the support of workers. If support from management is needed, it is unrealistic to expect them to represent the interests of labor.

Among Korean industrial union organizations, the Hyundai Motor Group's union is quite representative.

In the annual summer strikes between labor unions and management in recent years, the demands put forward by the strikes and other activities organized by the Hyundai Motor Union are no longer just improvements or increases in labor wages and benefits, but also include clear requirements for participation in corporate management. .

The trade union is trying to add an authoritative management body in addition to the company's management. The trade union's opinions must be taken seriously and implemented. Even when the company produces new models, the trade union's participation and opinions must be included.

In South Korea, the treatment of Hyundai Motor Group workers is quite high. It seems that the labor union organization has not done much in this regard. Naturally, it has turned its target to the management and power of the enterprise, rather than reducing union activities or even Such an organization will die on its own.

In fact, this situation exists in many countries. Almost every overseas merger and acquisition by Chinese companies will encounter the problem of strong labor unions.

Seven years ago, Steel Group Corporation spent US$120 million to acquire the Peruvian Iron Ore Company, becoming the first Chinese state-owned enterprise to successfully acquire a foreign company.

After that, Peruvian iron miners went on strike one after another amid the sluggish business conditions of Steel Peru Company. According to local laws and regulations. Companies cannot fire union leaders, but the tough Chinese management resolutely fired union leaders in the mining areas, thus intensifying the conflict.

Facing the striking union members, Steel did not insist on negotiating to get them back to their jobs. Instead, it hired labor workers through labor service companies to save money. In the end, the labor workers also went on strike, demanding equal pay for equal work with regular workers.

Until now, Steel Peru still frequently suspends production due to worker strikes, causing huge losses every year and making it difficult for Steel to get off the ground. Don't know whether to go or stay.

Fan Wubing told Wuzhi Xiaoji, "The strength of the labor unions in South Korea is beyond your expectation. Whenever those union members wearing red scarves shout slogans such as crushing the management and dying with the company, etc. , no foreign investors will be happy. This extreme labor dispute has completely distorted the image of South Korea. How will foreign investors who have no understanding of South Korea feel about the extreme labor struggles in South Korea? Chill down your spine."

Wuzhi Xiaoji didn't understand the situation here at all, and couldn't help but froze when he heard this.

South Korea has never been able to get rid of this labor culture that is full of struggle and consumption. At this point, some large trade union organizations that regard the labor movement as the realization of outdated ideals should be held responsible.

These unions have forgotten their natural mission of protecting the rights and interests of workers, but they often intervene in political movements and continue to take to the streets for demonstrations, regardless of the specific conditions of the country and the company, and exclusively carry out illegal strikes. Faced with slogans such as "die with the company" and "down with the management," which foreigner can tolerate investing in South Korea when personal safety and property are threatened?

It’s no wonder that there have been rumors in the international market a long time ago that if you want to invest in South Korea, you must either invest in companies without unions or sign a treaty prohibiting disputes with labor unions in advance. Such rumors are obviously caused by frequent disputes with Korean labor unions. The situation of excessive struggle is not irrelevant.

It can be seen that in the eyes of foreign investors, labor relations in South Korea have exceeded dangerous levels.

"It's such a pity that such a thing would happen." Wuzhi Xiaoji said with great regret.

Recently, the automobile manufacturing plant of Fanshi Investment Group has been developing and manufacturing SUV models. It would obviously be very beneficial if the relevant parts of Ssangyong Motors could be taken over. However, listening to what Fan Wubing said, Wuzhi Xiaoji himself also I felt a little hesitant. After all, I encountered such a strong trade union organization and intervened at the most difficult time of the other company. God knows what kind of backlash the stickmen, who have always had very high national sentiments, will have?

If you let your own funds fall into such a union quagmire, you will lose more than you gain. Although Fan Investment Group has strong assets and will not feel too distressed if it loses billions of dollars, but it is clear that it is not worth it. It would be unwise to do this, but Wuzhi Xiaoji was not so persistent in wanting to accomplish this.

However, Shen Ying, who was standing by, had heard the general situation and understood the matter, so she gave Fan Wubing a suggestion. "Since you are interested in their companies, but you are very disgusted with their trade unions, why don't you try to talk about whether you can restrict the activities of their trade unions, or simply remove the trade unions from their companies? If this goal can be achieved, it is not impossible to give Ssangyong Motor a try."

"How easy is it--" Fan Wubing said with a wry smile, "The stubbornness in the bones of Koreans is deep-rooted, especially the vigilance against the Chinese is deep-rooted. After all, they have been a vassal state for thousands of years. They have finally become independent and have their words counted. How could they be willing to buy your account? If there is no special reason, they will never have anything to do with China again."

However, Fan Wubing considered that what Shen Ying said might be worth a try, so he discussed it with Wu Zhi Xiaoji and asked him to send a negotiation team to Korea to conduct acquisition intention negotiations with Ssangyong Motors, and at the same time stated his position, which is the premise of the acquisition, that is, the current strong trade unions must be restricted or banned.

"As the saying goes, ask for a high price, but pay low. Let's talk slowly. We can afford the food and lodging expenses for dozens of people. As for the pie we give them, we can also draw a bigger one. Even if we can't reach an agreement, we have to drag out the negotiation for a long time, so that their enterprises are neither high nor low. The more difficult the situation is, the more beneficial it is for us." Fan Wubing revealed the truth to Wu Zhi Xiaoji.

"You two are mixed together, you are really a model of unscrupulous businessmen." Shen Ying leaned next to the phone receiver, listened to them talking about things, and commented with a smile.