Return to 1958 and build a century-old giant

Chapter 826 The Perfect Closed Loop of US Investment

"Are you referring to our Chrysler's 336 retail centers?" Lea Iacocca asked.
Yang Wendong had discussed this matter with him before, and he had indicated that he could consider it. In order to save Chrysler's automotive business, they were also prepared to sell all other non-automotive manufacturing assets.

Even though they knew that selling these stores would affect their car sales business, there was no other way. They sold everything they could, including some military-related and stable profit-making companies.

“Yes, if you are interested, this deal will bring in more cash flow than $2.5 million,” Yang Wendong said with a smile.

For many large, heavily indebted companies, many of their assets may be worth more than their market value, but they are dragged down by severe debt or losses in their core businesses.
Chrysler, as a century-old American company, had a diverse range of businesses over the decades and even participated in the military industry during World War II. The reach of such industrial giants is very long; for example, Chrysler can also manufacture tanks and is also a supplier to Boeing.

If it weren't for his identity, he would actually have many more prey to choose from.

Lee Iacocca nodded and said, "Yes, our asking price for these 336 car retail centers is $3.8 million, and the buyer will also need to assume a debt of about $1.3 million."

Yang Wendong smiled and said, "The price still needs further review. If it's suitable, I can buy it."

"Mr. Yang, are you really so optimistic about the future of the American auto industry?" Lee Iacocca was now also a little curious;
He had also investigated Yang Wendong. Admittedly, Yang is a top billionaire in Asia, but now he is spending seven or eight hundred million US dollars on Chrysler alone, which is a considerable sum.

Yang Wendong said, "Of course, the oil crisis is only temporary. We both agree on this point. Moreover, car dealerships are less risky. If all else fails, I can still sell Japanese cars, right?"

In the United States, car retail is not limited to the 4S dealership model. A car dealership can sell only one brand of car or multiple brands. Anyone who has watched American TV shows in the past will have noticed that many car dealerships carry various brands of cars, while the 4S dealership model is relatively rare.
Chrysler also has its own car dealerships, but they sell multiple brands together, though they mainly promote their own.

Li Iacocca thought for a moment and said, "Mr. Yang, if you want to buy these car retail centers, I hope we can reach another agreement?"

"You want me to continue the preferential sales tactics for Chrysler cars?" Yang Wendong knew the other party's intentions even without thinking.
Lee Iacocca nodded and said, "Yes."

Yang Wendong smiled and said, "I can verbally promise you that I will give you some preferential treatment, but it won't be reflected in the documents. Besides, such a subjective request can't be expressed in writing."

Even if some car brands are placed in prime locations, the salesperson's subjective presentation still has a greater impact.

A verbal agreement wasn't a problem, because in a few years, after oil prices in the US dropped, Americans would go back to their old ways and prefer large-displacement cars, and Chrysler's cars would still sell very well. More importantly, Lee Iacocca was indeed very capable; the new cars he launched a few years later were all bestsellers.

Lee Iacocca's success wasn't just about saving Chrysler from bankruptcy; it was about his ability to reverse-engineer the crisis and significantly increase investment in developing new car models when Chrysler was severely short of funds. He persevered until 83, achieving great success. The wildly popular MPV from his previous life was developed by Iacocca during those years, pioneering a completely new car model.

Otherwise, Chrysler wouldn't have gone from the brink of bankruptcy to a triumphant return in just a few years.

“Okay, you’re also a Chrysler shareholder. If our group’s cars sell well, it will benefit you too,” Lee Iacocca said slowly.
The only thing that can bind businessmen together is profit.

"Next, I will arrange for someone to conduct another review. If there are no problems, we can then discuss the price," Yang Wendong continued.

This deal involves more than 300 car retail centers in major U.S. cities. Including liabilities, the transaction amount is about $5 million, so it naturally needs to be taken more seriously. If successful, his car retail business will experience explosive growth. The U.S. is a mecca for car sales, and 300 stores here far exceed the transaction volume of 700 stores in Southeast Asia.

He was absolutely certain that he would make a fortune from his previous investment in Chrysler, but this transaction was a normal business deal, and he couldn't afford to lose money now.

Of course, even with Chrysler's investment, he could still make a fortune.

Lee Iacocca agreed, "Okay, I'll have someone arrange things accordingly."

“Alright, let’s talk about the second collaboration.” Yang Wendong paused and said, “This collaboration isn’t for now, it might be for later. I might need to purchase some automotive technology patents, parts, or technical personnel support from Chrysler.”

Lee Iacocca frowned slightly and asked疑惑地问道, "What do you need all this for? Are you planning to start a car company? Or are you planning to acquire one?"

Yang Wendong laughed and said, "Yes, but not American, but British, that's how it is."

“So that’s how it is. You’re planning to acquire Mini.” After listening to Yang Wendong’s introduction, Li Iacocca thought for a moment and said, “Mr. Yang, the problems in the British automotive industry are no less than those in the United States. If you get involved, the risks involved are not small.”

He wasn't worried about Yang Wendong, but rather that he'd finally managed to secure a large investment in Chrysler, and might still be counting on it in the future. After all, he wasn't sure if Congress would lend him the money, and even if they did, $15 billion might not be enough.
If Yang Wendong invests too much in the British automotive industry, wouldn't that affect Chrysler?
Yang Wendong laughed and said, "I know, that's why I need to buy some Chrysler technology to optimize Mini cars, if the acquisition is successful."

The technology of American automobiles at that time was still very advanced. However, because the United States did not lack oil in the past, their research focus was not on fuel efficiency, and then they encountered the oil crisis.
In terms of chassis, driving, comfort, and safety, American technology is actually much stronger than Japan's, at least in this era.
The technological sophistication in the UK was truly appalling, and he was well aware of the risks. If it weren't for his extensive network of car retail centers and the future opportunities in the domestic market, he wouldn't have ventured into the British automotive industry.
"Sure, I won't have any problems with technical cooperation either. In fact, as long as the funding is in place, Chrysler can even design cars and engines for Mini," Lee Iacocca laughed. Chrysler's technology is still there; it's just facing sudden market changes. As long as it weathers the storm, it will still be a top global automotive giant.

Yang Wendong nodded and said, "Alright, I hope we can have a pleasant cooperation in the future."

This time, he also invested heavily in Chrysler.

“Me too. If possible, when Chrysler expands into the Asian market in the future, I hope to cooperate with your channels,” Lee Iacocca said, shaking hands.

He also understood that Yang Wendong's industrial plan seemed to be aimed at building a huge automobile retail business group, which already included Asia. After the transaction with him, it would also involve the Americas. According to his intention, Europe and other places would inevitably be involved in the future.
This is an ambitious plan that could require investments of billions or even tens of billions of dollars, but if it succeeds, he will undoubtedly become a VIP guest of global automotive giants.

It has to be said that this ambition is truly grand, and Chrysler will likely need to rely on such automotive retail giants to some extent in the future.

Two months earlier, while Chrysler was being investigated by its own side, Best Buy was also being investigated by the four major Wall Street giants.
By today, it's pretty much over. Best Buy will also have some minor issues, but the impact will be minimal. No large company can be perfect when it comes to audits, as long as the risks or impacts aren't too great.
Subsequently, as agreed, the four Wall Street giants each invested $9375 million to acquire 5% of Best Buy's shares, bringing Best Buy's total valuation to $18.75 billion. Yang Wendong's 80% stake in Best Buy was worth $15 billion.

After receiving $3.75 million in investment, Best Buy immediately began more aggressive expansion measures, including building new Best Buy stores in 32 cities at the same time, and building five logistics centers across the United States and purchasing hundreds of heavy trucks, with the intention of further reducing costs through self-operated logistics.
This is also normal practice in many retail industries, including Walmart, which is now spending huge sums of money to build distribution warehouses and transportation centers.
In terms of personnel training, Best Buy has also begun a large-scale recruitment drive in major cities across the United States, with a focus on after-sales service, as a comprehensive after-sales service is the foundation of Best Buy.

Supermarkets like Walmart and Celtic may sell various appliances, but they cannot provide after-sales service.
According to Yang Wendong's plan, after Best Buy's after-sales service covers a city, it will also take on after-sales service for other sales methods. For example, if someone buys an appliance from Walmart and it has a problem, Walmart can also ask Best Buy for after-sales service. Of course, it is also possible that the manufacturer is directly responsible for quality, but Best Buy can still take on that.

As long as you monopolize the after-sales service, this business will still be in high demand even in the internet age. After all, you can sell online, but it's difficult to do after-sales service. Being able to outsource it is good for all parties.

Best Buy's operations are running smoothly. After making some inquiries, Yang Wendong felt relieved. This is his most important strategic move in the United States: controlling a portion of the US electronics retail outlets. After a decade of planning, Best Buy has become the industry leader. Now, with investment from Wall Street, he feels much more at ease regarding the political aspects of the future.
On July 12, Yang Wendong arrived at the headquarters of Citibank in New York City:

Citibank CEO Walter Reston personally greeted Yang Wendong and led him into his office;
After a brief exchange of pleasantries, Yang Wendong got straight to the point: "Walter, four investment banks, including Goldman Sachs and Morgan Stanley, have invested in Best Buy. Here is a copy of our cooperation agreement; some key data has been redacted, please don't mind."

You can take a look here, or you can contact these four investment banks at any time to confirm the authenticity of the matter.

Since a memorandum of understanding for bank loans has not yet been reached, he cannot disclose the details of his cooperation with the four major investment banks or the specific information about Best Buy.

“Haha, I already know about this. Goldman Sachs has also informed me.” Walter laughed. “Since the Big Four investment banks have agreed to Best Buy’s valuation, I only need to do a little review before it can be approved.”

“That would be perfect. I also hope to receive your bank’s funds as soon as possible,” Yang Wendong nodded and said.
This is why many companies like to go public, because after going public, they are watched by the government and major creditor banks, and their financial data is made public, which makes it much easier to raise funds from banks.
Conversely, independent private enterprises face significant difficulties obtaining bank loans. Yang Wendong's company in Hong Kong easily secured bank funding because its collateral consisted of real estate. However, manufacturing companies often struggle to obtain loans, especially large sums, as they lack fixed asset collateral. In such cases, the value of shares becomes the readily available collateral that banks value.
Best Buy is not publicly listed, but it is recognized by the Big Four investment banks, which makes it much easier to get a loan. Otherwise, Citibank would definitely be very cautious, and the loan might not even be approved.

Walter said, "In terms of funding, according to general practice, listed companies can only obtain 50% of the funds by pledging their shares. Although you have gained the approval of the four major investment banks, it is still not as good as listed companies. Therefore, we can only provide about 30% of the funds for your pledge."

"So that's only $4.5 million?" Yang Wendong frowned. "That's not enough. I need at least $6 million."

Walter asked, "Eric, are you really going to help Chrysler like this?"

“It’s not about helping. I’m optimistic that the American auto industry won’t decline so easily, and I’m also betting that Congress will definitely help Chrysler.” Yang Wendong shook his head: “As for auto retail centers, that’s a separate business. You know I have such businesses in Asia. In the future, I will globalize auto retail, not just in the United States.”

“Hmm, Eric, I understand your business direction.” Walter thought for a moment and said, “Alright, I can give you a loan of $6 million, but you will need to sign it in person.”
It's not that I don't trust you, but the board of directors also has procedures; personal trust cannot override the bank's risks.

"Okay, I can sign it," Yang Wendong nodded in agreement.

A personal signature indicates that if an unforeseen event occurs that results in insufficient collateral, the individual will be responsible for making additional repayments.
For banks, a personal signature is generally not very useful; they value collateral more. However, for the super-rich, especially those with businesses all over the world, banks tend to trust personal signatures because a super-rich person would not allow their business reputation to be tarnished. Most importantly, the US has the ability to collect debts globally.

Walter smiled and said, "Okay, I'll complete the process as soon as possible, and the funds will arrive on time. However, it will need to be monitored, and you can't make any other investments."

"Of course," Yang Wendong said with a smile;

My financial loop in the United States is finally complete; now I just need to wait for the results.

PS: Please give me a monthly ticket
(End of this chapter)