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Chapter 650 Taking another small step towards manufacturing

"Damn it, I'm going to appeal. I'm going to sue that old guy until he goes bankrupt."

In the chairman's office at MGM, Ernst was furious as he looked at the documents in front of him.

"This is utterly absurd!" He slammed the documents on the table, scattering papers all over the floor. "Such blatant asset stripping is not business operation, but naked plunder."

In the nearby rest area, Robert Iger appeared calm, while Mel Karmazin, sitting beside him, seemed somewhat at a loss, his eyes darting around, unsure of what to say or do.

"Investigate!" Ernst's voice rang out again. "I strongly suspect that old bastard Mike Jordan is a corporate spy planted by General Electric in Westinghouse! Otherwise, there's no way to explain why he would systematically and cheaply dismantle this century-old company!"

This is Westinghouse Electric, a living fossil of industrial history. In just five years, it was sold off completely by Mike Jordan, the former CEO of CBS Group and also the CEO of Westinghouse Electric.

In 94, Westinghouse sold its power transmission and control business to Eaton, including high-voltage switches, transformers, power grid control systems, and markets covering North America and Europe.

In 97, Westinghouse sold its thermal power business to Ingersoll Rand for $25.6 billion. It's worth noting that Westinghouse Electric's transport refrigeration equipment and industrial temperature control systems had the number one global market share.

It also had military electronics, which was sold to Northrop Grumman for $30 billion in the same year.

Westinghouse Electric is a major supplier of radar systems, missile navigation equipment, and military communication equipment.

Wouldn't it be better to make money lying around in a military-industrial complex? Such an important business, and you don't even have to worry about performance, yet you sold it for $30 billion.

In the same year, Westinghouse sold its office furniture business for $5.6 million.

Many people may not have heard of Westinghouse office furniture, but it is indeed a leading brand in the design and manufacture of high-end office furniture in North America.

Last year, Westinghouse Electric sold its core power generation business to Siemens for a low price of $15.3 billion, including gas turbines, steam turbines, EPC power plant general contracting, and 8000 engineers.

In Ernst's opinion, even a robbery wouldn't be fought this fiercely.

The key point is that Westinghouse offered itself up to customers before they even came to them. Most of these businesses were offered by Mike Jordan who took the initiative to contact them.

The industrial behemoth that once rivaled and even surpassed General Electric now only has a nuclear power business and a government services division left.

But what did we get in return?

It's just a CBS Group.

The other party not only robbed Westinghouse Electric's assets, but even changed its name.

In 1995, Westinghouse Electric acquired CBS for $45 billion, and two years later, Westinghouse changed its name to CBS Corporation.

Now that the old guy has retired, Ernst feels he can't swallow this insult unless he causes him some trouble.

"Morgan Stanley." Ernst thought of the driving force behind MGM's acquisition of Westinghouse Electric, and he almost ground his teeth to powder.

Ernst agreed to acquire CBS Group for a hefty $124 billion at the time, primarily based on two core reasons.

First, Morgan Stanley, as the financial advisor for this transaction, has committed to assisting MGM in achieving a full acquisition and to resolving shareholder disputes within the CBS Group to ensure the smooth completion of the transaction.

Secondly, Morgan Stanley clearly pointed out in its due diligence report that Westinghouse Electric still retains some core business segments and has the ability to generate sustained profits and the potential for asset appreciation.

He knew that Westinghouse had sold off many businesses, not just Mike Jordan; starting in the 70s, Westinghouse had been selling off its non-core business units.

It has successively sold off its home appliance business, street light business, electric light business, and financial credit business.

At the time, the industry generally believed that this was a strategic adjustment by Westinghouse Electric to focus on its core business and improve operational efficiency.

But what he didn't expect was that Westinghouse Electric would be in such a dire situation, to the point of having to undergo painful restructuring, with only its nuclear power business remaining as its core business.

This is what Morgan Stanley meant when he said that Westinghouse still has its core businesses that it hasn't sold.

This is clearly playing word games with him, because Westinghouse Electric has many core businesses, but the only ones it has truly acknowledged are power generation and nuclear energy.

From this perspective, nuclear power accounts for half of the core business, which does not mean that only a portion of the core business has been retained.

How much is a nuclear power business worth?

To put it in perspective, Ernst gave it $20 billion.

If the power generation business were still intact, Ernst felt he had made a good deal at the total acquisition price of $124 billion.

But now, he feels like there are bubbles on his head.

He glanced at Robert Iger, unable to say anything.

After all, he had already negotiated the price with Philip and left it to him to follow up. He hadn't inquired about the matter further and had gotten drunk in Annie's beautiful bed.

"It was Mike Jordan who advocated for sticking to the manufacturing sector, saying that the media industry had a higher price-to-earnings ratio," Karmazin weakly explained, facing Ernst's almost murderous gaze.

"Price-to-earnings ratio?" Ernst now wished he could grab Mike Jordan and give the old man a good beating.

Look at GE's current market capitalization, it's already over $4200 billion.

Even if Westinghouse doesn't reach GE's market capitalization, it should at least have half of that if it doesn't sell these assets.

Even if it's the worst, it should at least be a quarter of the market value, right?

"How can he sleep well at night? Isn't he afraid that George Westinghouse will crawl out from underground and kill him?" Ernst said viciously.

"Perhaps there are still some ways to remedy this," Karmazin muttered to himself.

"What did you say?" Ernst appeared in front of him instantly. "What do you mean by 'remedy'?"

Karmazin swallowed hard, avoiding Ernst's gaze. "In fact, we are considering selling Westinghouse's last remaining business, the nuclear power business."

"We were already in talks with a British nuclear fuel company, including selling them the Westinghouse brand name."

"However, employees in the nuclear power business unit strongly opposed it and jointly wrote a letter stating that they would not work for British Nuclear Fuel Company."

"When Westinghouse was sold to Siemens' power generation business, many of its 8000 engineers chose to leave or switch jobs. Even those who stayed received a raise."

"The nuclear power business has higher requirements for employees, and if these people do not work for British companies, they will be a huge burden after the acquisition."

Ernst understood, sat down, stroked his chin, and squinted his eyes.

After pondering for a while, he asked, "If I rebuild the Westinghouse brand and re-enter the industries that have already been sold, do you think those employees will come back?"

Without hesitation, Kalmarzin replied, "Of course. At Westinghouse, no one disrespects Mr. George Westinghouse or disagrees with the spirit and values ​​embodied in the name Westinghouse."

Ernst knew this; in America, George Westinghouse's name was far more famous than Edison's.

Edison is a negative and gloomy example, while George Westinghouse is the epitome of an engineer.

The engineering spirit that Westinghouse Electric is so proud of was established by George Westinghouse.

He was different from the capitalists of that era; even Edison only knew how to exploit workers.

His achievements were no less than Edison's, but when people mention him, they think more of his kindness and gentle nature towards his employees.

He was the first capitalist to proactively seek benefits for his employees, giving them shares, increasing their wages on multiple occasions, and being the first capitalist to implement a two-day weekend.

So much so that after his death, 50,000 Westinghouse employees spontaneously mourned him and funded the construction of a bronze monument in his honor.

Ernst grew increasingly excited about reuniting Westinghouse employees under George Westinghouse's name.

"But if that's the case, what about your reputation..." Karmazin could sense that Ernst was interested in his proposal and might act on it soon.

But if he actually did that, it would be a major blow to his reputation in the business world.

You sold the business, then immediately recruited all the key personnel back and started anew.

What will the companies that bought the business think?

play?

"Am I famous?" Ernst didn't care about that.

The descendants of robbers, what's the point of having a reputation?

Your ancestors were robbers, your elders were robbers, your whole family are robbers.

In a country filled with the descendants of sinners, do you want to be a good person?

It can't be changed.

He doesn't want to change either.