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Chapter 445 This is too much!

Almost all developed countries rely on the strong support of a key industry in their progress toward high income and high level of industrialization: automobile manufacturing.

It is not only a combination of capital-intensive and technology-intensive industries, which can drive the development of many related upstream and downstream industries, but also has a strong ability to absorb employment, playing an irreplaceable role in stabilizing employment and improving residents' income levels.

In recognized developed countries such as Japan, South Korea, Germany, France, Italy, Sweden, Spain, and the United Kingdom, the automobile manufacturing industry occupied a core position in their national economies during the crucial stages of their economic take-off.

This is especially true in the United States; the history of the development of the automobile industry is, to a large extent, half the history of American economic development.

Since Ford Motor Company invented the assembly line production method in the early 20th century, the American automobile manufacturing industry has entered a golden age of rapid development. The automobile industry has quickly become a pillar industry of the American economy, influencing the industrial structure and economic development of the United States.

Detroit, as America's Motor City, made an unimaginable contribution to the American economy at its peak.

Detroit now has a population of only 33, but as early as 1930, its population had exceeded 150 million, making it a large city with a population larger than New York City.

Behind it are more than 13 million jobs in the automotive manufacturing industry chain, affecting 13 million families and more than 50 million people.

At that time, the population of the United States was only 130 million, which meant that more than 40% of the population relied on Detroit's auto industry for their livelihood.

However, times have changed. With the changes in the global economic landscape, the intensification of industrial competition, and the adjustment of the domestic economic structure in the United States, Detroit's auto industry has gradually declined, and this once glorious automobile city has fallen into difficulties.

In front of the Chrysler headquarters building, Alan Grant stepped out of his black Lincoln and straightened his suit.

He did not immediately step into this automobile kingdom that symbolized the glorious history of the American auto industry. Instead, he stood quietly at the entrance, his gaze fixed on the three-pointed star flag fluttering in front of the building. An indescribable sense of decline welled up in his heart.

Three months ago, Daimler-Benz announced its stunning acquisition of the century-old automaker, marking another heavy blow to the decline of Detroit, the once proud and dream-bearing automobile city.

He was born in Detroit in the 1950s, which was the city's most glorious period.

At that time, the streets of Detroit were bustling with people, and busy crowds could be seen everywhere. The city's shops were always crowded with shoppers, and everyone's face was filled with happiness and satisfaction. The whole city was full of vitality.

But who could have imagined that in just over forty years, Detroit would fall from its former peak of prosperity to the depths of decline?

The population has dwindled by more than four-fifths, once bustling streets have become deserted, factories have closed, shops have shut down, and now even Chrysler, one of the Big Three automakers in America, has been sold off.

"Mr. Grant, our agreed meeting time is 2:00 PM sharp." Just as Allen was immersed in memories and reflections of his past in Detroit, his assistant glanced at his watch and gently reminded him.

Allen snapped out of his daze, nodded, took the briefcase from his assistant, reached inside, and ran his fingertips over the purchase agreement to make sure nothing was missing.

On the cover, the words "Chrysler Defense Remaining Assets" are clearly visible. As a partner at Wenger Law Firm, who has worked for several large law firms in New York and California, he is well aware of the significance of today's acquisition.

In just seven years since the end of the Cold War, the number of major U.S. military contractors has plummeted from 32 to the current 9.

The merger of Lockheed Martin and Boeing's takeover of McDonnell Douglas are still fresh in our minds.

It can be said that the military industry is undergoing a major consolidation, with the aim of uniting to divide up the industry.

For small and medium-sized military enterprises or new enterprises that want to enter the military industry, the space for development will become increasingly narrow.

If they want to continue developing in the military industry in the future, they either have to become vassals of these major arms dealers and provide them with supporting services, or they can only choose to establish cooperative relationships with them and share the profits by leveraging the resources and platforms of large enterprises.

Once these major contractors merged with the subcontractors, they essentially blocked the path for newcomers to enter the military industry.

This is arguably the last chance, and today's meeting is like the last ticket on the boat.

Another point is to prove one's abilities.

As a partner at Wenger's law firm, a member of the Garfield family office, and a Detroit native, he not only wanted to win this acquisition, but to win it beautifully.

Stepping into the Chrysler headquarters building, after verifying my information with the receptionist, I was led to a conference room.

In the conference room, Chrysler's negotiators were already seated at one end of the long table.

To his surprise, the person in charge of the negotiations was not Robert Eaton, the chairman of Chrysler, but Schneider, the CFO appointed by Daimler.

According to external reports, the newly established DaimlerChrysler adopts a dual-leadership system, with Daimler Chairman Jürgen Schremp and Chrysler Chairman Robert Eaton jointly serving as chairman and CEO of the new company. This is intended to balance the interests and management power of the two companies and is also a transitional arrangement for a smooth integration.

Jürgen Schremp is the chairman of the new group, while Robert Eaton is the CEO. Although their names are different, their functions are essentially the same.

Normally, Robert Eaton would have more executive power, but it's understandable that Daimler controls the finances, given that Daimler owns more shares.

But today was just the day we were discussing the sale of Chrysler's business, and it was Daimler's people who were in charge.

This indicates that Daimler has gained the upper hand in this internal power struggle.

However, this is exactly what Allen wants to see, because it would be more advantageous for him.

After exchanging brief greetings, Schneider picked up the silver lighter on the table and skillfully lit a cigar.

The smoke from the burning cigar rose slowly, filling the air in the conference room. Schneider took a deep drag, exhaled slowly, and said, "Mr. Grant, the assets you've proposed to acquire, including the technical blueprints for the M1 tank and the old factory and production lines in Ohio, are all important assets for DaimlerChrysler."

Schneider opened a folder on the table in front of him, took out an asset appraisal report, pointed to the numbers circled in red on the report, and continued, "According to our internal asset appraisal, the value of these assets is far higher than the $3800 million you proposed. Isn't your appraised price a bit too low?"

Faced with Schneider's question, Allen shook his head and firmly denied it, saying, "Mr. Schneider, I don't think so."

"The M1 tank blueprints that Chrysler possesses are merely the basic base for the tank design. Even if it is developed and improved to create a more advanced main battle tank, according to the relevant contract terms previously signed between Chrysler and General Dynamics, it has no right to independently produce this type of tank."

"As for the old factory in Ohio and the production lines inside, they are old relics built and put into use more than a decade ago. Whether those factories and production lines can still be used normally is unknown. They are not much different from scrap."

"Since you consider these assets to be worthless, why are you spending money to acquire them? And why are you willing to put up $3800 million? That seems contradictory, doesn't it?" Schneider retorted sharply, trying to gain the upper hand in the negotiations.

Upon hearing this, Allen shrugged slightly, a calm smile appearing on his face, and said unhurriedly, "Mr. Schneider, scrap is called scrap only because it cannot fulfill its due value in the hands of its current owner, but that does not mean it has no value at all."

"The reason we were willing to acquire these assets was to try to tap into the potential value of this waste and see if it could be reused, which also involved a certain amount of risk."

In fact, he was very clear about the value of these scraps.

When General Dynamics acquired Chrysler's core defense business for $3.36 million in 1982, it was thanks to another M1 tank production line in the assets that it was able to generate production capacity and secure orders worth tens of billions of dollars from the U.S. Army.

Don't be fooled by the fact that this production line in Ohio is just sitting in a Chrysler factory; once it breaks out of its General Dynamics contract and develops new armored vehicles or tanks, it can meet the supply needs of the U.S. military.

Daimler is more focused on its automotive business, and its military business is of little concern to it, but that doesn't mean they will sell it off cheaply.

But as DaimlerChrysler's negotiator, he had to fight for the company's best interests: "Regardless of whether you have the ability to utilize these assets, we absolutely cannot agree to your asking price of $3800 million."

"From an asset value perspective alone, the land occupied by that old factory in Ohio is worth at least $2000 million. Add to that the production line equipment, technical blueprints for the M1 tank, and research and development equipment inside the factory, and the total value of these assets is far more than $3800 million."

"Add another $200 million," Allen said, "but we demand Chrysler's historical supply records with the Army, as well as all outstanding maintenance contracts."

Schneider squinted, the smoke from his cigar weaving a transparent net between the two.

Not only did they not raise the price, but they also wanted to continue getting things for free. He felt that the other party was going too far.