Return to 1958 and build a century-old giant

Chapter 837 Arrangements for the Mini Car

The acquisition cost £7600 million, plus approximately £7700 million in debt, and according to the previous agreement, an additional £5000 million will be injected after the acquisition is successful, bringing the total to approximately £2 million.

£4 million, in this era, is roughly equivalent to $20 million, or HK$2 billion;

Of course, the subsequent injection of £5000 million can also repay part of the £7700 million debt, which is somewhat redundant.

However, with the conclusion of negotiations between the two parties, this acquisition has come to an end.
For Yang Wendong today, a mere £7600 million was transferred directly from the United States to Leyland's account on the day the contract was signed. From then on, the Mini car brand belonged entirely to Yang Wendong.

The signing ceremony was attended by many reporters. This was the first time that a state-owned enterprise had been privatized since Thatcher took office. Thatcher herself came to the scene and revealed some of the behind-the-scenes details of the acquisition to the media, and promoted her strategy of privatizing state-owned enterprises.
Because after the sale of Mini, the British government not only received a sum of money, but also got rid of tens of millions of pounds in government subsidies every year. This is a way for the British government, which is in financial crisis, to extricate itself.

Thatcher did this in order to continue pushing forward her strategy of privatizing state-owned enterprises;

The reporters at the scene, besides focusing on Thatcher, also wanted to interview Yang Wendong.

"Mr. Yang, what are the plans for the Mini cars going forward?"

"Mr. Yang, will you continue to invest in the UK? If so, which industries will you invest in?"

"Mr. Yang, would you consider becoming a British citizen?"

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Yang Wendong answered a series of questions selectively, but none of his answers were accurate, except for one point: he would guarantee future employment. This was to save face for Thatcher, since for politicians, any economic objective is to ensure the social employment rate.

And so, a few hours later, the interview ended, and Yang Wendong's convoy shook off the reporters and arrived at Mini's factory headquarters once again. This time, he was the owner of Mini.

Buster and the others were also waiting at the door: "Boss, welcome to Mini Corporation."

"There's no need to look at the workshop again. Let's go to the conference room to discuss future developments," Yang Wendong said with a smile.

Buster said, "Okay, this way please."

Unlike last time, this time Mini has gone to great lengths to welcome the new boss, even hanging a "Welcome" sign at the entrance in both Cantonese and English.

Along the way, the employees also took the initiative to greet him;

After arriving at the office specially prepared for Yang Wendong inside the Mini, Yang Wendong looked down at the huge car workshop and dozens of workers scattered around, and felt the pressure on his shoulders.

Before this, the industries he invested in were basically based on his foresight. He dared not say that he could make 100% huge profits, but he was sure that he could be 100% successful, as long as there were no quality problems. These industries included real estate, shipping, electronics, food and beverage, etc.
However, even though I know that the automotive industry will experience a major boom in the future, especially in mainland China, I can't be sure if I can succeed 100% if I get involved.
However, automobiles are still a capital-intensive industry. Once they cannot make a profit, they will basically suffer huge losses. Chrysler is a cautionary tale.

Of course, Mini is still small in scale right now, and with its own net worth, it can easily cover the losses. However, if it continues to rely on itself to sustain itself, then this investment is essentially a failure. Moreover, even if it succeeds in the early stages, encountering bottlenecks later on could lead to even greater losses.
However, when difficulties arise, facing them head-on is what gives us more motivation. After 20 years of success, it's time to try some challenging industries. That would be more interesting, and if we succeed, we would feel even more accomplished.

While Yang Wendong was thinking, the senior management of Mini gathered in the next conference room, and Yang Wendong arrived soon after.
Everyone stood up, and Yang Wendong waved his hand and said in fluent English, "Everyone, please sit down."

After everyone was seated, the meeting officially began. Buster stood up first and explained the specific financial and operational details of the previous year to his boss and those around him.
Although Yang Wendong and others had previously obtained information about Mini Company, it was only the specific operational data, which, like that of a listed company, could be manipulated.
Half an hour later, Yang Wendong understood the situation and asked directly, "So, in other words, Mini cars currently have two problems: financial debt and technology. On the other hand, they don't have a shortage of market demand for the time being, right?"

Buster said, "Yes, we have decades of sales channels in Europe. The problem is that our cars don't have a significant advantage compared to Japanese, German, or even French cars."

"So that means even if I use my sales channels in Asia and the Americas, it won't be of much help?" Yang Wendong asked rhetorically.

Buster laughed and said, "You can't say that. Having more channels and more sales will definitely be beneficial, but these can only solve the surface problems. They can't solve the fundamental ones."

"So, we still need to invest in research and development, so it's still a matter of funding," Yang Wendong nodded.

As far as he knew, in his previous life, BMW had invested 30 billion euros over many years to save the Mini brand. Of course, this figure was not a one-time investment, but rather a series of investments with a high degree of repetition. In other words, if the investment made a profit this year, it would be reinvested with the profits the following year, and all of these would be counted as "total investment".

However, considering that BMW can provide technical support, which is an advantage they don't have, the benefit is that they know the potential of the mainland market, and the mainland market won't care about slightly outdated technology. The current Mini is no less technologically advanced than the Santana of the 60s.

Buster said, "Yes, and it will take time."

"What if we could buy the technology?" Yang Wendong asked again.

Buster asked, "Buy technology? Which company is willing to sell us the relevant technology?"

Yang Wendong said, "I've already spoken to Lee Iacocca about Chrysler in the United States. You can send someone to Chrysler to communicate with their technical department and see what technologies Chrysler has that we can use. Then give me a list, and I will discuss it with Lee Iacocca."

Technological research and development is too time-consuming, and it also requires bypassing other people's patents. In the past, the mainland had been chasing Western companies in the field of fuel vehicles for 40 years but still failed. In theory, the UK is about the same now.
Instead of spending time and money, it would be better to directly purchase the relevant technologies first, and then use these technologies as a foundation for further research and development.

“Okay, I’ll send someone to the US tomorrow, and I’ll go with them later.” Buster immediately agreed. He knew that his boss had invested in Chrysler and that their relationship was probably not bad.
The others were also delighted to hear this, as acquiring some technology would be a good thing for the company, something that money often couldn't buy.

Yang Wendong continued, “In terms of funding, I have already injected £5000 million. Part of it will be used to repay some emergency debts, and the rest will be used for your operations. If the funds are still insufficient, I will inject more funds as appropriate. However, everything must be legal and reasonable. Next month, I will arrange for an international accounting firm to conduct a comprehensive audit of the company’s accounts. At the same time, the finance and human resources departments will be directly managed by the Hong Kong headquarters.”

However, the fundamental power remains with the UK; you will operate independently, and the headquarters will only play a monitoring role.

In his previous life, after Li Ka-shing acquired Hutchison Whampoa, he spent several years planning and strategizing before successfully driving out the British capital, because "replacement" requires sufficient time.
The automotive industry is far more complex than Hutchison Whampoa. Even if I wanted to cultivate talent that I could trust, it would take a very long time.

Buster understood his boss's meaning and replied, "Yes, Mr. Yang."

Yang Wendong nodded and said, "Okay, I'll give you the sales information for my locations in Asia and the United States later. You can contact them yourselves, and they will start selling Mini cars."

However, regarding after-sales service, I hope you can establish a warehouse center in the United States and Asia to store various commonly used spare parts, thus avoiding the problem of excessively long waiting times for customer repairs.

The reason why it is difficult for the automotive industry to expand into new markets is that after-sales service is a very complicated issue. A car has tens of thousands of parts, from small screws to large engines. As long as you enter a market, you must prepare a warehouse or factory locally, otherwise it will be extremely troublesome.

We also need to provide specialized training for the after-sales staff at each store. If it's not a best-selling model, many stores simply don't want to introduce it.

But this becomes a "chicken and egg" paradox: without sales outlets and after-sales service, there can be no good sales; without good sales, local sales outlets and after-sales service providers are too lazy to bother.

Therefore, the only way to succeed is to invest heavily and operate gradually.
Even though mainland China was the world's largest automobile market in its previous life, there were still several international brands that missed out on entering the market early on and never had the chance again.

“Sure, but it’s easier to deal with things in the US. In Southeast Asia, it’s difficult for us to control the local logistics, since they’re all different countries,” Buster said with some difficulty.

Yang Wendong said, "Let's put it in Singapore and then gradually optimize it. Those shops are mine. If a customer's mini car breaks down, I can arrange for the customer to use another car first."

However, this right is limited to my own stores. For others, you'll have to figure it out yourselves. Operating well in other markets is very difficult, and that's something to consider later, after sales have improved. Right now, the priority is simply to sell them at all.

The more expensive the product, the more cautious people are when buying it. Cars are not only expensive, but also involve safety, so it is not easy to get people in a new market to buy them.

Bass nodded and said, "I understand. Entering a new market, even with sales points and after-sales service, still requires a lot of advertising and marketing considerations."

Yang Wendong said, "Don't worry about that. I still have some influence in the Asian media. From now on, some Asian films will start to feature Mini cars. However, even if it's internal, the cost still needs to be settled. You can send someone to Hong Kong to find this person."

At Yang Wendong's prompting, the assistant handed Buster a business card.

Buster glanced at it and said, "Okay, I'll go talk to Raymond about it."

With a new, powerful, and wealthy boss, expanding distribution channels becomes significantly easier, at least in Asia.

"Everyone, if Mini wants to get back on track, it will require everyone's efforts. So I hope we can all work together to see that day come soon. Our first goal is to turn the company around within three years," Yang Wendong said, looking at everyone present.

Even if he can provide channels, media resources, and even technology, making a good car depends on the entire team. Putting aside everything else, quality control is essential.

"Yes, sir," everyone said almost simultaneously.

After the meeting, Yang Wendong and Buster went downstairs alone again.

Yang Wendong said, "Buster, there's something I didn't say explicitly at the meeting just now, which is that I plan to hire a quality engineer from a car company in Japan to go to England."

"Poaching people from Japan? Do you not trust our quality management?" Buster immediately understood what Yang Wendong meant.

Yang Wendong countered, "Can I trust it? Judging from the feedback from the European and American markets, there are quite a few after-sales problems with Mini, and the decline in sales is largely related to this."

Furthermore, the high cost of our automobiles is due to many reasons, but one of them is inadequate quality control. There are problems with assembly processes and supplier management. If we can solve these issues, we might be able to reduce costs significantly.

Buster fell silent; he understood that Yang Wendong was right.

Yang Wendong added: "Japanese car companies, as well as other industries, have been able to conquer the world not just because of cheap labor. Now, Japan's labor costs are not much different from those in Europe and America."

Their success must stem from their own advantages. I know them quite well; in terms of quality control, Japanese companies are now much stronger than their European and American counterparts. Similarly, because of their superior quality, they can control costs more effectively.

Many people in Europe and America today arrogantly believe that Japanese goods have won the global market simply because of low labor costs. However, this is only a small part of the story. In the future, when Japan invests in factories in the US and Europe, employing the same local workers, Japanese cars will still dominate the market, and their costs will actually be lower.
Although he disliked a simple life, Yang Wendong had to admit that Japan's industrial glory was indeed achieved through its own efforts. Even without the war in the 50s, their rise would have been inevitable sooner or later. Of course, after the reform and opening up of the mainland, industry would also be transferred.

“Okay, I understand, but I hope we can proceed gradually and not rush things.” Buster thought for a moment and said, “Otherwise, I’m worried there will be a lot of internal resistance.”

Yang Wendong said, "Of course, otherwise why do you think I'm telling you now? It's because I'm worried that if it's made public, it will cause opposition from the company's quality department. You can start by hiring a few people, and then gradually increase the number. You should also slowly promote the management methods used in Japanese cars."

Resistance from within established companies is immense. Even giants like Kodak and Nokia, knowing full well that failure to reform meant certain death, ultimately failed because they threatened the interests of too many insiders.
Bastian nodded and said, "Okay."

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(End of this chapter)