A few days after returning to Korea,
the Head of Planning and Andeokhwan Ahn, president of Taewoo Construction, came to see me.
"We've finalized the planning document for the post-sale apartment construction."
"So this was prepared together with President Ahn?"
"Not just him. All executives of Taewoo Construction put their heads together to create this plan."
President Ahn's face had aged noticeably in the meantime.
He had led Taewoo Construction smoothly for several years, and while he might be slightly less capable than other subsidiary presidents, no executive surpassed him in stability.
"So, two sites in Seoul, one in Gyeonggi Province, and three in metropolitan cities. Hmm, isn't that too conservative? Considering Taewoo Construction's capabilities, wouldn't it be possible to start ten projects simultaneously?"
"The capacity is there, but if too many projects start at once, there could be gaps in management and supervision. This year, we've planned to start construction at six sites first, then gradually increase the number annually."
In reality, a large construction company often served as a figurehead.
Actual construction work was usually carried out by small- to medium-sized regional companies, while the large company handled major projects or oversight.
"Other construction companies are desperate to secure orders, but Taewoo Construction is in the opposite situation, huh?"
"Of course, taking on more orders can raise revenue, but in the long term, constructing each apartment safely and solidly contributes more to Taewoo Construction's brand image."
"No matter how well you perform over ten years, a single defective project can ruin a brand's reputation."
As expected, Ahn prioritized stability above all else.
He might not have been the right temperament to drive explosive growth in a subsidiary, but for Taewoo Construction, which needed steady, stable growth, he was the perfect commander.
"Especially given the current state of the construction industry, things aren't looking good. Doosan Construction's large-scale apartment project in Ilsan has an unsold inventory rate of 80%."
"An 80% unsold rate means Doosan Construction is facing losses exceeding 150 billion won."
The Doosan Group was ranked 12th among Korea's conglomerates.
Doosan Construction itself ranked 10th among construction companies and was considered a solid builder.
So, theoretically, it should have been able to absorb a 150 billion won loss.
However, the Doosan Group was currently struggling with cash flow issues, making even that loss feel significant.
"The Doosan Group emptied its coffers trying to acquire the number-one construction machinery company in the U.S. On top of that, not only in Ilsan but in other soon-to-be-completed apartments, unsold units will continue to pile up, leaving Doosan Construction with a massive burden."
"The company they acquired was Bobcat, right?"
"Yes. Except for Taewoo Group, Doosan Group acquired Bobcat for a record 5 trillion won—the largest deal in history."
Acquiring Bobcat wasn't a bad decision in itself.
The timing, however, was the issue.
They acquired Bobcat just before the Lehman Brothers collapse, and with the global financial crisis, Bobcat's revenue plummeted.
"Is Bobcat still running at a loss?"
"This year, the outlook is slightly better, but considering the accumulated losses, it seems difficult for them to overcome their cash flow crisis."
It was a tempting asset.
Although Bobcat wasn't generating significant revenue now due to the cash flow crisis and the slump in the construction market, I knew very well that in a few years it would become Doosan Group's cash cow.
"Can Taewoo Construction manage Bobcat?"
"What do you mean all of a sudden? Are you planning to bring Bobcat into the Taewoo Group?"
"Bobcat is a company that will be essential for many of our upcoming projects. So, of course, we need to acquire it."
This wasn't just idle talk.
Partly, it was because Bobcat's value would increase.
But there was more. Once the shale gas business ramped up, a massive amount of construction machinery would be needed.
And it wasn't only shale gas—logistics, distribution, automation equipment, and more.
Many of the small machines produced by Bobcat could be used across numerous subsidiaries.
"Doosan Group is already shaken by the Bobcat acquisition. Why should we take on Doosan Group's burden?"
"Let's look at it differently. By selling Bobcat, Doosan Group can solve their cash flow problems, and we gain another source of future revenue. Isn't that mutually beneficial? And just because Taewoo Group acquires Bobcat doesn't mean we'll be destabilized like Doosan Group."
The planning director fell silent, seemingly convinced.
Normally, he might have argued further, but knowing roughly how much Taewoo Securities had earned amid the Japanese and European financial crises, he chose to hold his tongue.
"I don't think acquiring Bobcat is necessarily a bad idea. I've even thought before that Taewoo Construction should own a construction machinery company. But acquiring Bobcat could significantly reduce Taewoo Construction's operating profit."
"We only need to endure a couple of years. After that, Bobcat will become a solid cash cow for Taewoo Construction. We can't keep sweating over every single contract, can we?"
"If the chairman has decided, I will follow and trust your judgment."
Andokhwan Ahn, who always prioritized stability, was also a loyal executive who put my directives first.
Having worked alongside me through everything since 9/11, he had experienced firsthand that my decisions were rarely wrong, which made this level of trust possible.
"Director, arrange a meeting with Chairman Park Min-yong of Doosan Group."
"There have already been a few inquiries. And from what I hear, they are exploring several options to sell Bobcat."
"That means Doosan Group's situation isn't good. If we probe just a little, they'll contact us on their own."
"I'll make sure to spread just enough of a rumor so that Doosan Group might reach out without feeling pressured."
The acquisition of Bobcat—
This could be seen as part of the preparatory steps for the shale gas revolution.
Once the Bobcat acquisition is complete, we plan to fully dive into the shale gas revolution.
A few days later, the meeting with Park Min-yong, Chairman of Doosan Group, was arranged.
Thanks to the Director's careful handling, Doosan Group reached out first, and the meeting was held at a restaurant that Chairman Park frequently visited.
"Pleasure to meet you. I'm Kim Min-jae of Taewoo Group. I've heard a lot about you from my grandfather. I should have met and contacted you more often, and I apologize for not doing so sooner."
"Ha ha, Chairman Kim Tae-jung must be very proud. Seeing his grandson grown up and leading Taewoo Group—truly enviable."
Doosan Group had a long history.
Founded in the 1890s, its network was vast, and Chairman Park had considerable ties with my grandfather.
"Fortunately, Doosan Group quietly completed its succession process, unlike many other groups today."
"Hmm… I'm not sure if that's something to be thankful for. How is it that people of the same blood expose their flaws and fight each other? Honestly, there were times I wanted to abandon it all and disappear into the mountains."
Like all major conglomerates, Doosan Group had faced a succession war. Yet, unlike some current groups, it had not fallen into complete ruin.
However, the group had developed a complex shareholding structure, and rumors circulated that management had lost its center.
"Still, thanks to your steady leadership, Doosan Group remains intact."
"If Doosan Group were to fall apart, how could I face my elders in the afterlife? Sigh… even now, my worries are enormous. Doosan Construction's situation is far from good."
"You seem very concerned about the construction sector."
"Unsold units are piling up. Even if we poured all of Doosan Group's earnings into Doosan Construction, the capital wouldn't stay—it just leaks away through every hole."
Chairman Park spoke candidly about Doosan Construction's struggles, which could be considered a flaw.
Typically, corporate chairmen never reveal weaknesses to each other.
By bringing up Doosan Construction first, he was signaling, in essence, a request for help.
"There is a way Taewoo Group can help. If you wish, we can address the fundamental cause of Doosan Group's liquidity crisis."
"By fundamental crisis, do you mean helping us resolve the unsold apartment problem?"
"Isn't the unsold apartment issue essentially a result of the liquidity problem?"
"…It sounds as if you're offering to acquire BOBCAT."
Chairman Park Min-yong finally understood my meaning.
Of course, he never expected me to say I intended to acquire a 5 trillion won company.
"I've always had a strong interest in the construction machinery sector."
"Ha ha, didn't Taewoo Group sell all its machinery-related companies during the IMF period? I believe Taewoo Heavy Industries was sold in halves—half to the Current Group and the other half in a joint venture with Aramco."
Mentioning the IMF era in this context… A bit outdated, but understandable.
Back then, we sold subsidiaries recklessly to reduce debt. But since then, Taewoo Group has steadily expanded through mergers and acquisitions.
"We plan to acquire it because it will significantly benefit Taewoo Construction and Taewoo Motors."
"Hmm… Naturally for construction, and since it produces heavy equipment vehicles, it connects with the automobile side as well."
"Of course, we will proceed only if Doosan Group wishes. Taewoo Group has no intention of initiating the acquisition forcefully."
"You mean you don't want to drive the price up through a forced acquisition."
I wasn't incapable of a forced acquisition.
But I didn't want to bother with a company that was still posting losses.
Or more precisely, I wanted it to look like I didn't want to.
"When you tried to sell BOBCAT the past couple of years, no one showed interest. Now that it's finally running well, everyone's interested."
"Thanks to your excellent management, BOBCAT's sales have increased, that much I know. But there's still substantial debt. We'd have to choose between Doosan Construction and BOBCAT—saving only one at most, correct?"
Chairman Park Min-yong fell into deep thought.
It made sense—after barely surviving the difficult period, selling BOBCAT now would feel like a waste.
If such an offer had come last year or the year before, he would have accepted it immediately. But now, seeing its growth potential, he hesitated.
"If the price is right, there's no reason we can't sell. How much are you thinking?"
"We would like to acquire it for the same 5 trillion won that Doosan Group originally paid."
"That's quite a play on words. When Doosan Group acquired BOBCAT, the dollar exchange rate was 950 won. Now it's well over 1,100 won."
Even though it was still "5 trillion won," the value differed depending on the timing.
Since BOBCAT was an American company, Doosan Group naturally acquired it in dollars. But I intended to buy BOBCAT from Doosan Group in Korean won.
That's why Chairman Park complained that I was playing word games.
"5 trillion won is by no means a bad amount. Exchange rates will cycle back down eventually."
"No matter what, we cannot sell under such terms."
"The value of BOBCAT, as predicted by institutions, has fallen by almost half over the past five years. Considering that, Taewoo Group is effectively offering a premium of 2.5 trillion won."
Doosan Group was in the midst of a liquidity crisis.
That was why they had been trying to generate cash by listing BOBCAT publicly.
However, every time they attempted an IPO, the company's valuation was appraised even lower.
The ones losing out weren't us—it was Doosan Group.
So there was no reason for us to accommodate their circumstances. Instead, we could steer the situation so that Doosan Group had to meet our terms.
TL/n -
Bobcat is famous for its durable, compact machines that are versatile for construction, landscaping, agriculture, and snow removal.