Inside the Samsung Group headquarters building in Moogyo-dong, Jung-gu, Seoul, less than two kilometers away from the Blue House.
It's six o'clock on a Monday afternoon.
At the end of another tug-of-war day, Chen Qing dismissed the Westeros system team and signaled to Samsung Chairman Li Jianxi who came to show up because Chen Qing was attending. Li Jianxi also waved away the negotiators from Samsung and asked: " Miss Chen, what’s the matter?”
Chen Qing looked at Li Jianxi across the large conference table and said in a serious tone: "President Li, my boss is interested in long-term interests, so he doesn't care about your deliberate delay during this negotiation process for the sake of short-term interests. However, on December 31, This is the deadline, I hope you can remember it?”
Anger and frustration flashed through Li Jianxi's heart, but he remained calm on the surface and nodded slightly: "Miss Chen, I understand."
"This is just a reminder," Chen Qing said: "There is one more business matter. I have talked with Chairman Zheng of Hyundai and Chairman Choi of SK today. This Wednesday, I hope that the three of you will announce the layoff plan together. This is a measure for Korean companies. It is the key to recovery after this crisis. They have all agreed, President Li, do you have any problems here?"
"Ms. Chen, layoffs are something that requires careful consideration. It affects many people's livelihoods. We only have two days. It's too hasty. We need detailed planning."
"Planning can be done later. What I need is the stance of the three of you." Chen Qing refused to give in, staring at the head of Samsung opposite: "President Li, in fact, your current delay is also due to the restructuring of the company. We all know the specific reasons for the delay. These ideas are very unscrupulous in my opinion, and my boss doesn’t even bother to argue with you. Because these delays are hindering your own development. The boss told me that his A personal experience. In the development process of the Westeros system, he never got entangled in these corners, but kept moving forward quickly. This is how the Westeros system is today. We have talked about more than It is understandable that you have doubts about the prospects of Hyundai, Samsung and SK under the support of the Westeros system. However, it would be foolish to slow down your pace because of this. In the end, the boss has enough patience. But I didn’t, so President Lee, Wednesday, okay?”
Feeling the aggressive and sharp eyes of the girl opposite, Li Jianxi, who had always been strong, had some intention of evading.
The two were in a stalemate for several seconds, and Li Jianxi finally compromised: "Okay."
"Very good." Chen Qing's stern expression melted away instantly and she smiled: "President Li, if nothing unexpected happens, I will return to China this weekend. That's right, my hometown is Suzhou. It just so happens that Samsung Electronics The Chinese headquarters of Samsung Electronics is also in Suzhou. Why don’t you send a delegation to China this time to have an on-the-spot discussion on expanding Samsung Electronics’ business in China? What do you think?”
Li Jianxi sighed inwardly and said calmly: "You and Jin Qiu should discuss this matter."
Lee Kun-hee is talking about Kang Jin-gu, chairman of Samsung Electronics.
Li Jianxi can also understand why Chen Qing suddenly said this.
It seems contradictory to announce a layoff plan on the one hand, and to expand its business in China on the other.
Not really.
Samsung Group's next major layoffs, taking Samsung Electronics as an example, will mainly lay off Samsung Electronics' local team and its product factories in South Korea. Not to mention the business that will be completely cut off, there will also be products that are planned to be retained, such as TVs, mobile phones, etc. etc., the production lines will be further transferred to countries such as China and Southeast Asia in order to minimize costs.
Chen Qing made this request not only to attract investment for her hometown, but also to push Samsung Group to start substantial structural adjustments as soon as possible.
After Chen Qing said goodbye with satisfaction, Li Jianxi still sat in the empty conference room.
Li Jianxi thought of last year.
Following Simon Westeros' high-profile trip to China, he also visited China and publicly expressed his concerns about South Korea's economic overheating and his opposition to the Kim Young-sam administration's radical economic policies at a press conference at the Diaoyutai State Guesthouse in Beijing. dissatisfied.
After South Korea joined the OECD and advanced to the rich countries club last year, Kim Young-sam also proposed the slogan of entering the world's top five GDP in 2005.
Looking at it now, this slogan is a joke.
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The result of Kim Young-sam's radical economic strategy is that South Korea, which has maintained a trade surplus for decades, has actually started to run a deficit in the past few years. In 1996 alone, South Korea's trade deficit reached US$22.4 billion, thus consuming a large amount of South Korea's foreign exchange reserves. This is why when the financial crisis hit, Hong Kong, Taiwan and Singapore, the last three Asian Tigers, all weathered the financial crisis easily with their abundant foreign exchange reserves. On the contrary, South Korea, the top one, almost fell into an abyss of destruction.
At this time, when it was forced to sign a bailout agreement with the IMF, the media and the public just shouted that South Korea had lost its economic sovereignty. However, most people did not know what this actually contained.
Li Jianxi understood.
Even if Li Jianxi chooses those who understand current affairs to be heroes for the sake of family foundation, as a Korean who also has no shortage of nationalism and patriotism, he is still painful in his heart.
Because of the systemic risks hidden in the Korean economy, even if Samsung Group had to follow the general trend and expand debt, before the crisis, among the top ten chaebols, the overall asset-liability ratio of Samsung Group had exceeded 300%, which was actually very low. low level.
If it hadn't been for a clear attack by the Westeros system, Samsung would not have had to transfer control of Samsung Electronics, the foundation of the group.
Now, Li Jianxi only hopes that the Westeros Body System can keep its promise and help him win Kia and allow Samsung to smoothly enter the automobile business. Moreover, he is also determined that even if Samsung Electronics is completely abandoned, the Lee family must firmly control the automobile business.
Two days after Monday’s conversation, on Wednesday, December 3, the three chaebols, Hyundai, Samsung and SK, simultaneously issued group structural adjustment announcements.
Of course, no one is stupid enough to explicitly use the term 'layoff announcement'.
Just like Samsung.
The relevant report is called "Samsung Group's Management System Reform Plan," and Lee Kun-hee also deliberately renamed his direct secretarial team the "Structural Adjustment Committee."
However, look at the content.
The core of the innovation plan is that in 1998, Samsung Group will streamline 30% of its organizations and reduce corporate operating expenses by 50%.
There is no need to talk about other high-sounding or cryptic terms, just these two items, everyone understands what the so-called innovation plan actually means. To put it bluntly, Samsung Group plans to lay off 30% of its employees in 1998 and initiate large-scale salary reduction measures to reduce the group's operating expenses by 50%.
The entire Samsung Group, including Samsung Electronics, Samsung Life, Samsung C&T, Samsung Auto and other subsidiaries, has a total of 130,000 employees, of which Samsung Electronics alone accounts for 58,000, nearly half.
A 30% layoff means that 40,000 people will lose their jobs in the next year.
Behind 40,000 people are 40,000 families.
Even employees who are lucky enough to stay will face significant salary cuts.
The other two companies, Hyundai and SK, announced planned layoff ratios similar to Samsung, both at around 30%.
Even though a large number of companies in South Korea have closed down in the past year, South Korea's current unemployment rate is only 6.1%. It’s hard to imagine what South Korea would be like if all companies followed Samsung, Hyundai and other giants in laying off employees on the same scale, causing the country’s overall unemployment rate to reach 30%.
You know, the unemployment rate in those countries in Eastern Europe that have completely collapsed is around 30%.
Therefore, as soon as the announcements of the three companies were released, they immediately aroused a lot of criticism from the media. The Blue House and several presidential candidates also expressed strong concerns about this matter.
It doesn't help in the end.
With the influence of the three chaebols, the announcement of the so-called 'system reform' or 'structural adjustment' will inevitably trigger an inevitable herd effect.
Previously, they were worried about the pressure of public opinion. Even if the IMF agreement has lifted the ban on large-scale corporate layoffs, many companies did not dare to carry out layoffs in a big way. Now, giants such as Hyundai, Samsung, and SK have taken the lead in doing so. Everyone still has What scruples
As a result, countless companies began to follow suit overnight.
By Friday, unemployed people had once again gathered in front of the Cheong Wa Dae. This time, the demonstrators did not attack the employer who had laid off them in vain, but once again pointed the finger at the IMF. Some even pulled out a very 'creative' banner reinterpreting the IMF as 'I'm Fired' to express dissatisfaction.
Unfortunately, this has just begun.