Third-Generation Chaebol

As with any negotiation, the side that makes the first move is at a disadvantage.

That's why we needed to wait—until Taewoo Auto's sales in China increased.

Two months passed as we held our ground. Then, the planning director walked in with the answer I had been waiting for.

"Taewoo Auto's sales have surpassed 20,000 units. Around 5,000 cars are being sold each month, and the pace is continuing to accelerate."

"The momentum is picking up."

"However, we expect growth to slow down. The productivity of the Romanian factory is lower than that of domestic plants, making it difficult to increase production further."

This confirmed what I needed—proof that Taewoo Auto was gaining traction in China.

By now, this information had likely reached the radar of U.S. automakers eager to enter the Chinese market.

More accurately, I had made sure the information was leaked.

All crucial business intelligence in the U.S. inevitably funneled into Wall Street. Through SAVE Investment, I had strategically spread the news of Taewoo Auto's success in China.

"Has there been any contact from the U.S.?"

"There are rumors that GM is showing interest, but they haven't reached out directly."

"GM and we have had a somewhat rocky relationship, haven't we?"

"In business, yesterday's enemy can become today's ally—and tomorrow's rival again."

GM making the first move?

Even so, I had no intention of partnering with them.

If I had, I would have invested in GM's shares instead of Ford's.

"We'll wait a little longer. That's all for today's report."

After dismissing the planning director, I picked up the phone and called David in the U.S.

"David, I have another task for you."

[If it's for the boss, I'll do anything! Where do I need to go this time?]

"Get in touch with Ford. You'll be meeting them as a representative of SAVE Investment, which holds a 20% stake in Ford."

[At least I don't have to take a long flight this time. What exactly should I negotiate for?]

"Casually bring up the idea that Taewoo Auto is planning a joint venture for its expansion in China. Make sure Ford sees the potential."

David fell silent, thinking it over.

I could hear him making thoughtful "hmm" sounds before he finally spoke.

[So, you want Ford to be the one to propose the joint venture first?]

"Exactly. The key is to make it seem like Ford is making the first move, not Taewoo Group."

[The American auto industry is desperate to break into China—Wall Street is buzzing with it. Just a little nudge, and they'll take the bait.]

"I'll send you the data on Taewoo Auto's success in China. It'll come in handy."

[Got it. I'll make sure their executives are so anxious they'll hop on the next flight to Korea.]

David's confidence was undeniable.

Owning a 20% stake gave him leverage. No executive would ignore a major shareholder's words.

Besides, U.S. automakers were growing increasingly desperate to enter the rapidly expanding Chinese market.

***

David's skill was as sharp as ever.

In less than a week, Ford's executives flew to Korea, inquiring about the joint venture.

Since I had been the one to originally propose the idea, my grandfather designated me as the chief negotiator for Taewoo Group.

As a result, I found myself sitting across from Ford's executive team, representing Taewoo Group.

"It's a pleasure to meet you. I'm Kim Min-jae, Director of Strategic Planning at Taewoo Group."

"I'm Drank, head of Ford's Asia-Pacific operations. I didn't expect Taewoo's successor to personally lead the negotiations—hahaha."

Despite his large build, Drank had surprisingly gentle, deer-like eyes.

The fact that he knew I was the heir to Taewoo Group suggested he had done his homework.

We spent about thirty minutes on small talk, easing the initial tension.

Once the atmosphere had relaxed, I decided it was time to get down to business.

"It must be quite an important matter if the renowned Director Drank himself has come all the way to Korea."

"I heard that Taewoo Auto is considering establishing a joint venture for its expansion into China. We came to inquire whether we could be Taewoo Auto's partner in this endeavor."

What on earth did David say to them?

I hadn't expected Ford to express such strong interest in the joint venture right from the start.

Only an amateur would jump at the opportunity just because the other party was eager.

"This joint venture is still in its infancy. We need to hold discussions with a potential Chinese partner and obtain approval from the Chinese government."

"I've heard that you've already established strong guanxi with the Chinese government. Doesn't that mean it's as good as done?"

Drank was not one for subtle negotiations.

He was straightforward, aggressive, and relentless.

With people like him, the best approach was to keep them hanging—give just enough hope to keep them on edge.

"It's not that we don't want to form a joint venture with Ford. Taewoo's small car models and Ford's larger vehicle lineup would create great synergy, after all."

"Then what's there to hesitate about?"

"May I ask a question? Why does Ford want to form a joint venture with us? Surely, you could establish one in China on your own?"

A slight redirection of the conversation.

Drank was pushing too hard, so I needed to slow things down.

"I understand you studied economics at Harvard. Then you must be well aware of how crucial risk diversification is."

"You want to share the risk with us?"

"Not just that. By forming a three-party joint venture, we can significantly reduce the chances of failure."

I agreed with him on that.

A three-party joint venture would indeed mitigate risks and ensure a more stable and lucrative entry into the Chinese market.

But the real issue was time.

Even if the joint venture was established, it would take at least one to two years before a factory could begin operations.

And the financial crisis was set to begin as early as next year. I needed to secure immediate benefits before that happened.

"I completely agree with everything you've said. However, as you know, our relationship with GM has been rather strained. If we partner with Ford, there's a possibility of legal disputes."

"If that happens, we'll take full responsibility and handle the legal matters."

"In that case, may I make one additional proposal?"

"By all means, go ahead."

"In addition to the joint venture for China, I'd also like us to extend our partnership in the U.S. market."

China was a long-term plan—two years away.

But the U.S. market was an immediate concern.

While Taewoo Auto's sales in the U.S. had been gradually increasing year after year, the growth rate was too slow.

However, if I could leverage Ford's distribution network?

Simply having Taewoo cars available in Ford dealerships would completely change the trajectory of our growth.

"We can consider a partnership for small cars."

"Would you also be open to including compact sedans along with small cars?"

"That is certainly possible. In fact, Ford has been looking to fill the gap in its small and compact sedan lineup, which we haven't actively developed."

A non-overlapping product lineup.

Ford was focused on mid-size cars and SUVs.

Taewoo Auto specialized in small and compact sedans.

Since neither company's market interests clashed, negotiations proceeded smoothly.

"Very well. I will initiate discussions with the Chinese government regarding the establishment of our three-party joint venture. We can finalize the details after receiving government approval."

"I'll be looking forward to the good news. And if necessary, Ford is willing to contribute a larger share of the investment for the joint venture."

At first glance, it might seem beneficial to us.

But the reality was different—ownership shares in the joint venture would be allocated based on capital investment.

In other words, Ford was seeking a larger stake in the company.

"Let's discuss that in more detail at a later stage."

"Perhaps I was too hasty. I look forward to our next meeting, then."

With that, the meeting with Director Drank concluded.

As soon as he left, I immediately called David, who was building connections in China, to instruct him to begin securing approval for the joint venture.

***

Two weeks later

David returned to Korea.

But in both of his hands, he carried an overwhelming number of gift bundles.

"Are you moving here? What's with all the luggage?"

"These are gifts from Zheng Hongqin for you, Boss. The logistics company's revenue has been performing exceptionally well, so I guess this is his way of showing appreciation."

I opened the bundles.

Inside, I found traditional Chinese ceramics and paintings.

Even with my limited knowledge of fine art, I could tell these were expensive.

"I doubt he's giving me such valuable gifts just because I treated his son well."

"He wants us to form the three-party joint venture with a Chinese company aligned with his faction."

"Zheng Hongqin belongs to the Shanghai clique, right?"

"That's correct. Not only Zheng Hongqin but also the top-ranked figure in China's political hierarchy is from the Shanghai clique. That's why they want us to form a joint venture with Shanghai Automotive."

If history were to unfold as it did in my past life…

Shanghai Automotive would partner with GM.

But this time, things were different.

Instead of GM, they were about to form a joint venture with Ford.

"Shanghai Automotive isn't a bad choice."

"In fact, it's even more beneficial for Taewoo Auto. Shanghai Automotive already has existing factories capable of producing small and compact sedans."

"Which means lower initial investment costs for us."

"And as early as next year, we could begin selling Taewoo Auto models in China. Unlike Ford, which must wait for a new factory to be completed, we can start selling immediately."

"That's an excellent condition."

"Moreover, the proposed equity structure suggests an equal 33% share split among the three parties."

This meant no initial capital investment was required.

It was an opportunity to expand into China while simultaneously increasing market share in the U.S.

Even before selling complete vehicles from the Romanian plant in China, this was part of my plan all along.

Once the foreign exchange crisis hit, exports would become more important than the domestic market.

This was precisely why I had pushed for rapid expansion into China.

If we succeeded before the financial crisis arrived, Taewoo Group would secure a massive cash cow, ensuring stability during the storm.

"Let's move forward with this. Under these conditions, even my grandfather will approve."

"So, should I head back to China and begin finalizing the details?"

"Yes. And make sure to create a financial channel where money can naturally flow into the Shanghai clique. They will remain the most powerful faction in China for the foreseeable future."

"Shanghai Automotive will handle most of that, but I'll do what I can on my end too."

Securing a foothold in China meant securing the support of the Shanghai clique.

And for at least the next five years, they would dominate China's political landscape.

After that, power would eventually shift to the Crown Prince Party (太子党, Taizidang), but since the Shanghai clique and the Crown Prince Party were forming an alliance, we could naturally align with the next ruling power as well.

There was no need to worry about the administration after that.

The Crown Prince Party would maintain control for the next 20 years, ensuring long-term stability.