Return to Hong Kong Island for a Century

Chapter 444 McDonnell Douglas Shareholders' Decision (First Update)
"It's a rather troublesome matter."

"The main reason is that Li Song has the ability to manufacture airplanes; otherwise, we wouldn't be in such a passive position," a McDonnell Douglas shareholder said with some helplessness.

In the past, when McDonnell Douglas negotiated with other companies, they adopted an attitude of "take it or leave it," and even required advance payment and waiting in line.

Since being grounded by the Aramco Federal Aviation Administration in 79 and dubbed the "King of Air Disasters" by unscrupulous media, the whole world has changed.

"What hurts me the most is that even though we know the other party will be our competitor in the future, we still have to do business with a smile," someone else said.

“Wrong, Li Song is right. Our biggest competitor is Boeing. Look at Boeing’s orders in the last two years, especially the 737 orders, which are far more than our MD80 orders.”

"It's all because of that damn financial crisis..."

"I have to admit that the Boeing 737 is indeed more comfortable than our MD80. I myself don't even ride in the MD80."

“The price of 2000 million is too low. Our original offer of 3000 million US dollars per aircraft was already low enough.”

"Now the price will be cut by almost half again."

"The key is also technology licensing..."

"If each plane costs $1000 million less, then 30 planes would cost $3 million."

Seeing the shareholders discussing amongst themselves, McDonnell Douglas's vice president felt a little nervous. If these damned shareholders didn't agree, wouldn't this transaction be a loss?

"Ladies and gentlemen, I'd like to remind you of something: the stock price. Our stock price has gone up. How much has your net worth increased?" The vice president took a sip of coffee and then reminded them.

"I don't think I need to elaborate on Li Song's influence. If he becomes dissatisfied with us, the consequences will be severe. If the stock price falls, your personal wealth will..." the vice president said.

These shareholders' wealth is entirely dependent on the stock market.

Moreover, these shareholders will use their shares for financial investments. The higher the stock price, the more money the shareholders can borrow from banks by mortgaging their shares.

McDonnell Douglas was later acquired by Boeing, and the shareholders actually made a profit because the two companies combined into one, directly monopolizing the global market.

Of course, McDonnell Douglas was later acquired mainly because it simply couldn't survive, and the aircraft it subsequently launched were just too bad.

So they simply joined Boeing; although their shares were diluted, the stock price was higher.

When shareholders use their shares to invest in finance, they are actually hedging against risks. If the company goes bankrupt, it will not affect them personally.

The bank is pledging shares.

Some people say, wouldn't the bank lose money?
Of course not. Banks will assess these pledged shares and then package them into funds of various risk levels.

The bank has already made its profit from the fees. As for those who can't repay their loans by mortgaging their assets, that's the loss for those who bought the funds.

The subprime crisis that followed Aramco didn't cause Aramco much loss; the real losses were to Europeans, because the funds that packaged these loans were sold to Europe, and of course, to some other countries around the world.

The subprime crisis was, in fact, a planned and purposeful act of reaping the world's wealth.

Of course, the same applies to US Treasury bonds.

"You've all seen the performance of the Changan 201. I don't know if you gentlemen believe in the 'Oriental Miracle,' but you can look at some figures: the export growth rate of BMW motorcycles under Li Song's name has surged from 5,000 units per month to 200,000 units now."

"It's only been a year since last November."

"And the export growth rate of BMW cars..."

"Gentlemen, what do you think the delivery growth rate of the Chang'an 201 aircraft will be?"

"My advice, and that of all our senior executives, is to get rid of the non-performing assets in the workshop as soon as possible, introduce new aircraft technology, and seize the market."

"We have a mature industrial chain, a mature supply chain, and mature customers."

"The longer we wait, the greater the losses from these non-performing assets will be."

"As for the technology licensing issue, we don't think it's a problem, since we won't be producing the DC-10 aircraft anyway," the vice president said.

"And don't forget, everyone, besides us in the West, the bear also has airplanes. I think as long as the East is willing to pay in US dollars, the bear will definitely lower the price."

"Furthermore, reliable sources indicate that Boeing is assembling a team to travel to the East..." the vice president began.

"I agree!"

"I agree, but we can't release all the good news at once." After listening to this, the shareholders weighed their options and then agreed.

These shareholders were afraid of the stock price falling, so they bought a lot of shares at low prices. Now that the price has plummeted, they will be the ones who suffer losses.

Of course, these shareholders wouldn't trade stocks themselves, as that would be illegal.

However, some people used other methods, and McDonnell Douglas also had a group of people behind it who benefited from the stock price increase.

At this point, American politicians still have a sense of shame and won't personally draw up candlestick charts.

Later, a certain politician directly drew a candlestick chart, letting the whole world see clearly what the so-called Western economy is all about.

In particular, some experts who are yellow-skinned but white-hearted and regard Western economics as classics were dealt a heavy blow.

"Gentlemen, regarding the proposal for the blueprints, I think we can make a betting agreement with Mr. Li Song, since the price of one hundred million US dollars is really too high," the vice president said again.

The vice president's statement is indeed somewhat high; hiring a designer wouldn't cost that much. Of course, hiring a designer takes time, but this is readily available.

On the other hand, a vice president's job is to make the financial reports look good. Providing $100 million now is different from providing another $100 million later, because a vice president doesn't know how long they'll be in that position.

"Agreed!" The shareholders were also thinking about the stock price; McDonnell Douglas had been falling for so long since 79.

McDonnell Douglas's shareholders and management informed the president in Shanghai of the decision.

Meanwhile, in a hotel in Shanghai, Yang Haiyang gained a new understanding of Li Song's domineering nature, having known about Li Song for quite some time.

Yang Haiyang worked at the Yangcheng Railway Bureau, while Li Song started out in Yangcheng.

The establishment of the BMW motorcycle factory required significant investment of transportation capacity, materials, personnel, and equipment from the railway sector.

The railway giant is no joke at this point. No matter how big or small your factory is, unless it's a national-level enterprise, you have to treat it like royalty when you come to this territory.

The transportation of supplies involves many aspects, each linked to the next; it's too easy to manipulate the other party.

However, the situation was different at the BMW motorcycle factory. The higher-ups issued direct orders, and many people were ruined due to the poor handling of materials at the BMW motorcycle factory.

Later, people within the railway system learned that BMW motorcycles were treated like royalty; if you didn't serve them well, you'd be the one suffering.

Of course, later everyone was willing to provide services to BMW Motorrad because BMW Motorrad gave them motorcycle quotas.

Later came BMW outboard motors and BMW cars.

Later, all BMWs from Guangzhou were exported, and those initially sold domestically became rare.

Currently, used BMW motorcycles in Guangzhou are more expensive than new ones, and there are few buyers even with high prices.

The railway also transported refurbished motorcycles from other places, and then transported the goods obtained in exchange for the motorcycles to various locations.

Yang Haiyang also knew the name Li Song, but he had almost never met him in person.

Moreover, Yang Haiyang also knew that foreign companies paid high salaries. Although Yang Haiyang held a high-ranking position in the railway, his income was fixed, and even if there were benefits, they wouldn't be much.

So when his superiors approached him, Yang Haiyang decisively joined SF International Logistics. As for the railway, his son naturally took over. This company had been established in China for less than half a month.

We had just set up the framework when we were unexpectedly notified to come to Shanghai for negotiations.
They started with 30 large passenger planes, involving negotiations worth hundreds of millions of dollars.

Yang Haiyang is prepared for a protracted battle; this involves hundreds of millions of dollars, and it could take a year or two.

Yang Haiyang had heard of negotiations with foreign countries before, some of which could last for five or six years (in the past, McDonnell Douglas's investment in Shanghai took several years to negotiate).

Because of the significant differences between the two sides, the West made exorbitant demands, while the domestic authorities were powerless to do anything about it and had to consult and discuss the matter.

I didn't expect the boss to personally intervene. Yesterday, it took half an hour for the introducer to speak, and only 15 minutes for him to hear McDonnell Douglas's terms.

What surprised Yang Haiyang even more was that the price offered by the other party was so cheap. Yang Haiyang also collected some information on the prices of the aircraft models he wanted to purchase during the negotiation.

Yang Haiyang originally thought McDonnell Douglas would charge a premium, which is standard practice for Western companies.

I didn't expect the boss to draw a line on the wall today, not giving the other party a chance at all.

"Boss, are we going to be a little...?" Yang Haiyang was still a bit worried.

"Hehe, they're begging me. If they don't agree today, I'll lower the price again tomorrow," Li Song chuckled.

Because Li Song understands Western companies too well, and McDonnell Douglas's shareholders and executives would cause the stock price to fall.
Shares and stock prices are what executives and shareholders care about most, because they are the quickest and easiest way to make money.

How did the dot-com bubble inflate in America?

It's all about constantly boosting data, like page views and registration numbers. Even if it costs money every day, it doesn't stop these insiders from making grand promises to outsiders.

The capitalists at Amei are very familiar with this kind of thing. Who will be the one to take over in the end?

Why did the US experience a financial crisis? It was because capitalists hyped each other up, creating a bubble that ordinary people bought into, and then the capitalists ran away.

This is why America's financial crisis has cycles, because it takes time for leeks to grow.

"Alright then," Yang Haiyang said.

"Manager Yang, please draft a plan and see how many planes are needed domestically, then coordinate with General Manager Tian." Yang Haiyang was only in charge of domestic SF Express logistics.

The international branch is headquartered in Hong Kong Island. The DC10 can fly globally, covering Aramco's east and west coasts, South America, Africa, Europe, and the Middle East. Li Song is building an international fast logistics and transportation system, which of course requires a lot of money upfront.

"Okay." Yang Haiyang nodded.

"That's enough for today, everyone. Come back tomorrow," Li Song said.

Li Song went back to his small villa, while Yang Haiyang contacted Tian Jiahui to learn about the advanced experience of logistics companies.

The higher authorities also quickly learned about the content of Li Song's negotiations with McDonnell Douglas.

"This is the first time I've seen negotiations like this."

"They actually drew lines directly on McDonnell Douglas!"

"I wonder what McDonnell Douglas's reaction will be?"

"I feel so relieved by what Li Song did!" the leaders said one after another.

(End of this chapter)