Return to Hong Kong Island for a Century

Chapter 445 Press Conference (Second Update)
“Li Song and his team have a deep understanding of the Western market, which is why they were able to negotiate in this way.”

"Moreover, Li Song himself has technical skills. I think this deal is more about supporting a rival within Aramco to target Boeing."

“I agree. The production capacity of the Chang’an 201 can’t be increased in the short term, and the sales of McDonnell Douglas’ series of aircraft are not optimistic. If this continues, Boeing’s strength will become stronger and stronger. If we don’t intervene, then when the Chang’an aircraft manufacturing plant reaches mass production, it will face an even stronger Boeing.”

"That's true."

"Although the Changan 201 has obtained the European airworthiness certificate, its current production capacity is insufficient and it is simply unable to meet the needs of the overseas market."

"There are reports that Airbus is also preparing to make an aircraft similar to the Chang'an 201. In the past two years, the cost of flying large aircraft in the West has increased, and customer demand has decreased." These leaders carefully analyzed the progress of the matter.

Just then, someone delivered a message to the top leader, who chuckled and said, "McDonald's just contacted Li Song privately, and they agreed to Li Song's conditions..."

Not long after Li Song returned to his villa in Shanghai, Tian Jiahui rushed over: "Boss, McDonnell Douglas has agreed."

"So fast?" Li Song hadn't expected it to be so fast either.

"Yes, but McDonnell Douglas said not to release all the good news at once," Tian Jiahui said.

"That's good. Contact Zhang Dehua immediately. Brother He will send him the patent application drawings for the civil aviation passenger plane." Li Song had given this instruction to Brother He when he left Hong Kong Island. Brother He was Li Song's personal bodyguard captain from the mainland.

Li Song had long ago designed an aircraft to compete with the Boeing 737, in accordance with McDonnell Douglas's requirements, and it used General Electric's engines.

Once McDonnell Douglas received the blueprints, the aircraft manufacturing process was very fast. Because Aramco had a complete industrial chain, McDonnell Douglas only needed to break down the blueprints, hand them over to the supply chain manufacturers, wait for the parts to arrive, and then begin assembly.

Of course, McDonnell Douglas also manufactures them.

"it is good!"

"However, they said the blueprints would be subject to a betting agreement," Tian Jiahui added.

"That would be even better." Li Song was aware of the betting agreement, but he didn't care.

Because Li Song's support for McDonnell Douglas is a hindrance to Boeing. Two tigers cannot share one mountain. Even if McDonnell Douglas cannot compete with Boeing in the US domestic market, it can still steal customers from abroad.

McDonnell Douglas actually has a very strong network of connections; otherwise, the F-15 would have been upgraded all the way up.
McDonnell Douglas was acquired by Boeing, or perhaps it was because it was incompetent; the DC-10, MD-80, and MD-11 were all pretty rubbish.

A series of disastrous projects led to McDonnell Douglas's collapse.

"Alright, I'll head back now." Tian Jiahui didn't go into details, because the betting agreement definitely needed to be discussed.

When Section Chief Zhou learned of this news, he immediately reported it. He didn't expect McDonnell Douglas to react so quickly, thinking it would take a few days.

Tian Jiahui returned to Parkson's Shanghai office and called Zhang Dehua, who then rushed to Parkson's office.

Li Song's bodyguard captain had already delivered the blueprints to Baisheng Company. Zhang Dehua then skillfully cooperated with Baisheng Company to register the patents, and then signed a commission contract with Baisheng Company based on the number of patents applied for.

Before giving the patent drawings to Zhang Dehua, they must be registered with the company, and then there are other procedures such as signing a contract. It's not like we can just give the drawings to Zhang Dehua directly, in case he takes the drawings and runs away.

The next day, when Li Song arrived at the hotel, McDonnell Douglas's president stood up to greet him: "Mr. Li, our company is willing to sell 30 DC-10-30s at $2000 million each, and we are also willing to license our technology to your company for the modification of cargo planes and engines."

McDonnell Douglas's president also knew that this was the last batch of DC10, and that there would be no more production. The main focus now was on disposing of non-performing assets.

“I demand that McDonnell Douglas provide maintenance training and pilot training.” Li Song did not agree, but instead made more demands.

“Okay!” The president of McDonnell Douglas thought that it wasn’t much money anyway, only a few million US dollars, after all, it was a huge order of 6 million US dollars.

Then both parties signed a purchase contract. East SF International Logistics signed a contract with McDonnell Douglas for 30 DC10-30 aircraft for a total price of US$600 million. The deposit was US$100 million, and subsequent payments would be made according to the delivery schedule. McDonnell Douglas was to deliver all the aircraft within two years.

Because McDonnell Douglas' DC10-30 production line is at a standstill, and supply chain companies are still in litigation with McDonnell Douglas, since no one wants McDonnell Douglas' previous orders, but McDonnell Douglas has already ordered parts from other companies, it will take some time to resolve these issues.

Li Song's deal was not a loss at all; the price of airplanes kept increasing, and these airplanes could be used for forty or fifty years.

Of course, signing the formal contract won't happen so quickly; many details need to be handled properly, and it also needs to be reported to the business department.

This was one of the conditions in the East-West trade negotiations. The buyer was SF Express, and as for the funds, the head office directly allocated them.

BusinessBus was surprised that SF Express and McDonnell Douglas reached an agreement so quickly, and after receiving the report, they immediately sent people to Shanghai.

As for McDonnell Douglas purchasing aircraft patents, this was of course done through a contract with Parkson Company, which acted as an agent for Li Song's patents.

Because Hong Kong Island is now under British control, and Parkson is also a British company, saying this won't break the hearts of those Westerners.

The rest was no longer Li Song's responsibility; it was handed over to Yang Haiyang. Tian Jiahui, along with the legal team from Baisheng Company, negotiated the contract with the legal team from McDonnell Douglas.

It mainly concerns the rights, responsibilities, obligations, and liabilities in the contract, as well as the responsibilities in case of problems.

On the fourth day, the Business Unit representatives arrived, and Yang Haiyang signed a letter of intent with the president of McDonnell Douglas for 30 DC-10 aircraft, totaling $6 million. Reporters in Shanghai, especially Western journalists, were stunned upon receiving the notification, as they had only reported on the initial contact three days prior, and a contract had already been signed?
Is this still Earth?

A $600 million contract was finalized in just three days?
These reporters were still a bit stunned when they received the invitation to attend the signing ceremony. This was too fast!

Is everyone still not ready?

What happened to the promised tug-of-war?

Why is it gone?

The reporters asked a series of questions, mainly to McDonnell Douglas's president.

"Mr. President, is it really possible to avoid losing money on a plane that costs 2000 million US dollars?" a Western reporter asked directly.

"We at McDonnell Douglas are a responsible company. Due to some reasons on our part, some of our partners have been put under tremendous risk," McDonnell Douglas's president said, without mentioning the handling of non-performing assets.

"This is also our company's only opportunity. We tried to find others, but we were all rejected. Here I would like to thank the trade delegation for laying the foundation for our cooperation."

"Our company will immediately restart the production line and assume the responsibilities that a partner should have," McDonnell Douglas's president continued, not forgetting to give a shout-out to the politicians from Aramco.

The CEO of McDonnell Douglas said that, but he will definitely have to talk to his supply chain partners and will definitely try to lower prices. Anyway, some partners have already manufactured the parts. Will they sell them at a low price? If they don't sell, they will only be selling junk.

Some companies had already prepared the materials, but McDonnell Douglas lost its orders. Even if they resold these materials, they would still lose money, as the costs of transportation, warehousing, etc., had already been incurred.

Moreover, many of Aramco's factories operate with debt, using loans to purchase materials based on orders.

You can't just sell the materials whenever you want, because the loan amount for the order will definitely exceed the cost of the materials.

Therefore, McDonnell Douglas will certainly not bear the losses alone; everyone will have to share some of the burden.

However, this cannot be said outright.

Of course, this is also a stab in the back for Boeing, because Boeing spent money and effort to do all the work, but McDonnell Douglas took the credit.

Why do these reporters feel like this deal is targeting certain individuals?

"Uh? Mr. President, why did this collaboration happen so quickly?" These reporters were caught off guard because the deal was completed so fast.

"Mr. Li Song is very wise and hit our psychological bottom line directly. In addition, we have to admit that the Chang'an 201 aircraft is the best of its kind in the world. Our company needs to get out of the predicament as soon as possible and then adjust our strategy." The president of McDonnell Douglas praised Li Song directly.

Praising Li Song now, but when it's revealed later that McDonnell Douglas bought Li Song's aircraft patents, it won't seem so demeaning anymore.

"Mr. President, do you mean that McDonnell Douglas is going to adjust the company's strategic direction?" a reporter quickly asked.

"Yes, everyone will wait for further news. McDonnell Douglas is a listed company, and a responsible one at that," McDonnell Douglas's president added.

"Mr. Yang, what is your company planning to do with so many aircraft?" a reporter asked Yang Haiyang.

"We mainly deal with logistics, but I'm just the head of the inland branch. The specifics are up to the head office," Yang Haiyang said, dodging the question.

When interviewed by reporters, the Business Bureau staff said that this was the result of East-West economic and trade cooperation, a win-win situation.

When asked whether they still wanted to purchase Boeing aircraft, the Business Unit representative said that it was a matter for the company itself.

After the press conference, the reporters quickly spread the news around the world.

It was morning in Shanghai, which was the first half of the night for Amei.

Boeing's president, executives, and shareholders hurriedly gathered together, staring in disbelief at the news before them.

"conspiracy!"

"This is a conspiracy against our Boeing company!"

"Let those damn politicians step in and prevent McDonnell Douglas from exporting DC-10 aircraft! No way!"

"Why was it so fast? It must have been planned in advance. McDonnell Douglas violated the principle of disclosure of major information by listed companies and is suspected of insider trading..." Boeing shareholders roared.

The Boeing president shook his head with a wry smile. No one could stop McDonnell Douglas from getting the order, because all the companies in McDonnell Douglas's supply chain wanted McDonnell Douglas to win the order.

A $6 million aircraft, when amplified to GDP, could reach $30 billion. In today's financial crisis and with high unemployment, how many jobs could this order create?
And don't forget, there's a group of people behind McDonnell Douglas. Didn't these people benefit from McDonnell Douglas's stock price soaring this time?

Now, anyone who goes against McDonnell Douglas is going against the people behind McDonnell Douglas, and is taking money out of other people's pockets...

(End of this chapter)