Pittsburgh Hotel, Grand Ballroom.
Poe, the chairman of the Pittsburgh Steel Union Association and president of Coopers, was dumbfounded.
The Pittsburgh Steel Annual Meeting, where American steel companies gathered to discuss next year's investment plans, had attracted an enormous number of guests.
"Welcome, President Louis of Siemens."
"Haha, nice to see you here."
"Nice to meet you, President Wesley of Westinghouse."
"It's been a while, hasn't it?"
He was busy greeting people at the entrance.
All of this happened after the letter arrived announcing that a special envoy from the small country of Korea in the Far East would be attending.
"Ah, welcome, Director Van Flint."
"So many people have come. It looks like it will be a delightful party."
"Ha, even Mrs. Nancy is here."
"Oh my, President Poe. You look so happy. Is there good news in the steel industry?"
Poe was secretly surprised.
Not only had Van Flint, a major player in the military-industrial complex and an outside director of BR, attended, but also Nancy, an advisor for international security at the Department of Defense.
Where had the invitations gone?
Even Fritz, the West German ambassador to the United States, had attended. What on earth was happening at this party?
"Ah, I'm slightly excited about the party today. It's an unexpected boom. Who exactly is this Korean envoy?"
"There he comes, the peculiar-looking Asian."
Nancy pointed to a man walking towards them.
***
"Hello, President Poe. I'm CS Woo."
"Welcome, Mr. Envoy. We've been expecting you."
Poe looked at me with a mix of curiosity and confusion.
It was hard to understand why a country would send an envoy to a private company's social gathering.
Don't overthink it.
I'm here because the timing and place are just right.
"Welcome, CS."
"It's been a while."
"With both Advisor Nancy and General Van Flint here, it's not strange that a Korean envoy would come, is it?"
I understood Nancy's presence, but why General Van Flint? BR doesn't handle steel.
"Ah, I see. It's an honor to use the Pittsburgh meeting for such an important gathering. Please, come inside."
When I made it clear that I was here to negotiate, President Poe's expression changed drastically.
It seemed he hadn't seriously considered the idea of receiving a 1 million-ton integrated steel mill investment.
The party hall was crowded with nearly a hundred people.
More people had come than I had sent invitations to. Well, the petrochemical complex party earlier this year was a huge success.
Especially DuPont, who obtained the Kabla license, saw their stock price soar, recouping their investment in Korea even before running the plant.
"Wow, these Western parties are really something."
Director Seok's eyes widened as he looked around.
No wonder, under the dazzling chandeliers, champagne bottles were piled high like mountains, and the atmosphere was lively with a live band playing.
Dozens of waiters roamed the banquet hall, endlessly serving whiskey and champagne, and hors d'oeuvres like caviar were plentiful.
"Are you surprised by this? The petrochemical vice minister's party was even grander. There was a champagne fountain and a small opera performance."
Deputy Assistant Minister Yeom Won-chul boasted to Director Seok with a shrug.
"Were there more people then?"
"Of course! So many people were offering positions to the vice minister that we could pick and choose our contracts. Right, President Woo?"
"This time will be different. The three of us need to stay sharp. While there's little chance of being scammed with petrochemical equipment, steel is different. Whether it's West Germany or the U.S., they'll be eager to sell us outdated equipment."
"Selling us outdated equipment?"
"New steel mills and steelmaking methods are being developed almost daily. The recent rise of the Japanese steel industry is thanks to adopting the new LD converter oxygen steelmaking method, right? Naturally, advanced countries like the U.S. and West Germany will want to sell their old equipment and switch to new ones."
Heavy industry generally sees booms in roughly 10-year cycles, with innovative technologies emerging each time, and the trend was particularly strong in the late '60s.
It was a time when 500,000-ton steel mills were springing up like mushrooms in India, Pakistan, the Philippines, Indonesia, Malaysia, Turkey, and Brazil.
Despite the numerous steel mills, except for Pohang Steel in our country, all were long-term loss-making.
This was partly thanks to Pohang Steel's engineers working like mad to maximize the operation rate, but in other countries, the advanced companies in charge of the construction had forced overpriced outdated equipment and furnaces on them.
In this scenario, we could aim not only to surpass these steel mills in profitability but also to win plant construction contracts for future expansions.
Today's party is the first step.
"Chairman, I don't understand why these prosperous American companies are trying to block our country's steel mill. Frankly, America's steelmaking capacity exceeds 100 million tons, more than 100 times ours."
"In terms of scale, yes. But you saw Pittsburgh on the way here, didn't you? It's an inland city where raw materials have to be transported by rail. If competing steel mills in other countries grow, they can't maintain competitiveness. Pittsburgh steel companies know this."
"Why did America build steel mills in places like Pittsburgh in the first place?"
Deputy Assistant Minister Yeom asked.
"Deputy Assistant Minister, during World War II, self-sufficiency was paramount. Pittsburgh used Pennsylvania coal and iron ore from the vicinity of Lake Superior. But now, it's more advantageous to import cheap raw materials from abroad."
Director Seok answered on my behalf.
"Ah, so building an integrated steel mill on the coast would significantly increase profitability."
"Exactly. Building a steel mill by the sea allows for continuous expansion. American steel companies have no choice but to invest in our steel mill. They can sell us equipment and pocket dividends."
When I concluded, both nodded.
Once you see things from the outside, your perspective changes, doesn't it?
You can learn a lot just by looking at the factory locations.
"Hello, Mr. Woo. I'm Fritz, the West German ambassador to the U.S."
"Nice to meet you. I've been looking forward to this."
I had wondered where he was, but he came to me on his own.
The West German ambassador scrutinized the document folder I was holding.
It seemed he was wondering if it was an accident report.
"Is that the report?"
"No. There's no need to reveal an accident report here."
"If it's compensation you're after, we can negotiate separately…"
"Rather than negotiations, I'm more interested in whether you're willing to invest in Korea's integrated steel mill."
"I came with Siemens and Demag. We can discuss the technicalities separately."
Hmm, as expected, they didn't bring Otto or SMS. Those steel plant companies would become more famous in the 21st century.
I made a good call sending Sambok separately.
"Discussing technicalities with them? That's great, it makes our job easier. Director Seok, could you negotiate with the West German ambassador?"
"Yes, Chairman."
"This gentleman…"
"He's fluent in German, so the negotiation will be easy. Also, we're thinking of a compensation amount of 20 million dollars, whether in cash or kind."
"Gasp! 20 million dollars? That's an outrageous demand."
The West German ambassador turned red, but there was no reason to engage. If you hold the knife, you have to wield it decisively to kill. Swinging it half-heartedly will only hurt both parties.
"If you think it's an outrageous demand, you can refuse. Director Seok, take him somewhere quiet."
"Yes, Chairman. Ambassador Fritz, please follow me."
Despite it being his first time in such a setting, Director Seok headed upstairs. He immediately found a quiet conference room, showing he had a knack for the job.
"Deputy Assistant Minister Yeom, you need to greet the guests as a representative of Korea. Just emphasize the necessity of the integrated steel mill."
"Yes, leave it to me."
Deputy Assistant Minister Yeom was suitable as a figurehead.
I needed to filter out the VIPs and secure investments.
"Hello, Mr. Woo."
"Haha, nice to meet you. May I know who you are?"
Someone offered me a glass, and we toasted.
"I'm Wesley, president of Westinghouse. We met at the petrochemical vice minister's meeting, don't you remember?"
"Ah, President Wesley. Now I remember."
What's this? Westinghouse is acting friendly.
At the petrochemical vice minister's meeting, they just drank and left.
I told them we needed two 100MW power plants for investment, and they just laughed it off.
"Haha, I was a bit disappointed then. You could have given me one of the 100MW power plants."
'You rejected it, didn't you? Ridiculous.'
It was absurd, but I couldn't say that outright. On the other hand, it meant they definitely wanted to invest this time.
No doubt, they rejected the idea thinking Korea couldn't build a 100MW power plant, only to be torn apart by their shareholders.
In such cases, a reasonable excuse that saves face for both parties is needed.
"At that time, Bechtel agreed to train our engineers. If Westinghouse had made a similar offer, we would have given you one too."
"Ha, you signed such a contract?"
"This time, we were going to leave the power plant to Bechtel again, but if you invest in the integrated steel mill, we'll reconsider the power plant order."
"Haha, will it be big again
this time?"
"Of course. We're thinking of starting with two 50MW power plants."
Steel mills are called national backbone industries, equipment industries, resource transportation industries, and money-eating monsters. They are characterized by their enormous resource consumption, but like the petrochemical industry, they have a huge impact on both upstream and downstream sectors, making them essential for a country aiming to become a developed nation.
Moreover, unlike machinery industries, which require the simultaneous development of tens of thousands of component technologies, petrochemicals and steel industries can produce high-quality finished products if the factory has the latest equipment and uses the latest processes.
The term "equipment industry" implies that the technology is embedded in the equipment itself, making technology adoption and development relatively easy.
I'm attempting a steel mill first for this reason.
Steel mills tend to develop at an unimaginable pace if the initial step is taken correctly.
"Haha, two 50MW power plants? That's 100MW, then."
President Wesley laughed contentedly.
He already spoke as if he had secured the order.
"Huh, why is Westinghouse holding my guest?"
"General."
Van Flint appeared out of nowhere and joined the conversation.
"General Van Flint, what brings you here?"
"What do you mean? BR is also thinking about steel mills. Why is Westinghouse here? Isn't steel mills out of your scope?"
What's this? BR is doing steel mills?
And isn't BR and Westinghouse on good terms? Why are they provoking each other?
"General, since when did BR do steel mills?"
"Since when? Listen, Wesley. We can do anything at any time. I have important matters to discuss with my guest, so don't interfere. CS, let's move."
Van Flint's provocative words pushed Wesley aside and he took me along.
Why do these two companies seem to be at odds?
Even though BR is a major military-industrial complex, Westinghouse is also a significant company.
"Van, isn't this too aggressive? Westinghouse has every right to hear CS's investment conditions too."
Nancy also joined in suddenly.
Naturally, she gave me an opportunity to state the investment conditions. Everyone's eyes turned to me after Nancy's words.
"Alright. The investment conditions for Korea's integrated steel mill are very simple. We need 170 million dollars for a 1 million-ton steelmaking capacity, and the Korean government plans to invest 20 million dollars."
"... You're seeking 150 million dollars in investment?"
Nancy was surprised.
She understood why the petrochemical complex, a massive cluster of factories, needed 300 million dollars, but questioned why a single steel mill would require 150 million dollars.
Of course.
I'm going to build a steel mill with the latest equipment.
"Korea is not solely looking to American companies. We plan to recruit investors from around the world. Through bidding from global steel companies, we will introduce the most advanced facilities and operate them at 100% capacity to maximize shareholder returns."
"The most advanced facilities…"
Van Flint seemed to grasp something.
Indeed, he has a good sense.
I'll perform miracles at the steel mill just like with Kabla.
"Even if it's not an equity investment, we'll guarantee a 7% annual return on a commercial loan with a three-year grace period and a twelve-year repayment term. But this applies only to amounts exceeding 10 million dollars."
"CS, you shouldn't make such remarks lightly."
Nancy, along with the party attendees, were all shocked.
This was because the standard loan interest rate at this time was generally 5-6%.
I need to secure as much money as possible even if it means offering an additional 1% interest. When the steel mill is completed, the oil shock will hit, causing steel prices to skyrocket along with oil prices.
It would be cheaper to pay a 7% interest rate than to pay dividends.
"Lady, I am a special envoy dispatched by the Korean government. I don't make reckless remarks."
I raised a toast to Nancy, giving her a gentle warning.
Helping is fine, but don't overdo it.
This is business backed by the state.
"Now, everyone, consider how much you're willing to invest. We have matters to discuss among ourselves. Business always follows procedures."
Van Flint threw a word to the buzzing audience about the unprecedented interest rate and began filtering out the VIPs.
"General Van Flint, will you serve as the observer?"
"Of course. If you ask me to be the observer, I'll do it. If you ask for a steel mill design, I'll provide it. If you ask for equipment, I'll supply it."
Wow, BR is coming on strong.
"I'm Snyder from Blaw-Knox. We can provide equipment too. Let's sit together."
Oh, Blaw-Knox is being proactive?
"Don't leave out Westinghouse."
"Can Siemens listen in?"
"We at Demag would like to invest as well."
"Steel came first to us in the UK."
"Italy is no less in steel."
The British company Yellman and the Italian company Impianti also joined the negotiations.
"Haha, everyone knows that our Coopers is the host of this party, right? Please come inside."
President Poe of Coopers stepped forward and opened the door to the other side.
He ushered the VIPs inside, closing the door behind Nancy. He seemed to imply that others were insignificant.
Including BR, there were four American companies, two German, one British, and one Italian company. Moreover, the Silverstein family, who could handle legal procedures related to finance, were also present.
'This combination is promising.'
It was a perfect combination to manage everything from raw materials to equipment for an integrated steel mill.
Today, the first integrated steel mill of the Republic of Korea will be born.