Episode 118: Improving Morale**
Lee Chang-jin acquired full management rights of Yeongi Trading and Hanse Beer, and Daese Consortium agreed to adjust 70% of the government bonds and 30% of the creditors’ loans.
The existing Hanse Beer factory would operate normally, and the acquirer and creditors planned to double the production scale. Of course, the brand name “Izen Beer” would remain unchanged.
“Daese Industries has agreed to acquire all management rights and bank debts, including guarantees, worth 10 billion won from Yeongi Trading and Hanse Beer,” announced the representatives of both companies.
After the acquisition announcement, the signing ceremony became abuzz with excitement.
No one had anticipated that Daese Industries would be the one to acquire Hanse Beer.
Sensing a good news story, reporters rushed over.
“Mr. Lee Chang-jin, many in the industry consider this acquisition a risky move. Why did you decide to acquire a consumer sector business different from Daese’s main focus?”
“I made the decision based on the future prospects of the company. As a consumer myself, I couldn’t stand by and watch a good beer like Izen disappear due to management corruption. Moreover, competition is necessary to provide good products to consumers, isn’t it? We will do our best to ensure that the Izen Beer brand secures its place in the market rather than being a one-off.”
Lee Chang-jin’s response was skillful. He presented himself as a patriotic businessman willing to sacrifice for the greater good, a perfect opportunity to build a long-term image of a robust company.
Lee Chang-jin’s media play seemed to work well, with various favorable reports pouring in from major daily newspapers, including the 『Gyeongun Ilbo』.
“Daese Industries’ bold acquisition: Will it be the savior for Hanse Beer on the brink?”
“Daese Industries CEO Lee Chang-jin: ‘Hanse Beer is a competitive product. It can make a comeback.’”
With the announcement of Daese Industries acquiring Yeongi Trading, Hanse Beer’s stock price, which had plummeted, began to recover. Lee Chang-jin’s name remained fresh in the public’s mind due to his $30 million export contract with Cheongwoo.
There is a general expectation that someone successful in one field will do well in another.
The positive sentiment toward Lee Chang-jin was the fundamental reason for the stock price rise.
However, not everything goes as expected. The Yeongi Trading factory, which resumed operations, did not meet expectations. Upon receiving the report, Lee Chang-jin frowned.
“The work efficiency is worse than expected. They are using less than half of the machines’ capabilities.”
“Indeed, compared to Daese Textiles, their productivity is less than half.”
The work atmosphere was also not good. Workers at Yeongi Trading were lethargic, simply following orders without enthusiasm.
This was understandable, as the CEO and head office executives who embezzled company funds were immediately prosecuted, leaving the positions vacant, and the senior-most worker was acting as the plant manager.
Faced with the seriousness of the situation, Lee Chang-jin discussed countermeasures with Hwang Cheol-gwan, the newly promoted vice president of Daese Textiles.
“If it’s a personnel issue, should we dispatch a new plant manager?”
But Vice President Hwang Cheol-gwan shook his head.
“That wouldn’t be appropriate. Yeongi Trading is a locally based company, and sending an outsider would cause extreme backlash. Labor disputes could arise.”
“You must have investigated; was there no issue with expertise?”
“Yes, that doesn’t seem to be the core problem. The investigation showed that the workers’ proficiency and the capabilities of plant managers and executives were not much different from our company’s employees. They might even be more skilled.”
“So, it’s not about the people but morale and efficiency?”
“Yes, probably.”
“Then what do you suggest we do?”
“In such cases, I believe it’s best to send an external auditor.”
“An external auditor?”
“Well, sort of like a secret inspector? You need to know what needs surgery to remove the cancer.”
However, despite inquiries, there was no suitable person to dispatch as an auditor. Even Yeo Jin-joo, the secretary, indicated it would be challenging.
“Most of our personnel are currently overworked. Moreover, it’s nearly impossible to assign a department head as an auditor.”
Hwang Cheol-gwan, who was responsible for the textile division, barely had time to solely handle the Italian towels and military uniforms departments, and Director Jeong Ho-seong, who was also newly promoted to executive level, was on a business trip for the trade division.
Director Seo and Advisor Hong were in the Middle East, and mid-level officials like Seo Yo-han and Lee Yong-sik were unfamiliar with textiles. While considering personnel appointments, Hwang Cheol-gwan made a recommendation to Lee Chang-jin.
“How about assigning Director Lee Chang-sik?”
“Director Lee Chang-sik?”
“Yes, I’ve observed him closely, and Director Lee Chang-sik is very efficient in his work. It’s no exaggeration to say that our company’s work management manual was created by him. It would be a waste to use such a talent just as a mid-level manager. Moreover, isn’t he your brother? To give him external authority, he should at least hold that position.”
“Is that so?”
Up until now, there hadn’t been a single problem in the tasks assigned to Lee Chang-sik. It was evidence that he quietly and diligently adhered to principles.
“I was blind to what was right under my nose.”
Upon reflection, there wasn’t anyone else suited to push through such a thankless task with determination.
Lee Chang-jin called Chang-sik separately.
“I want you to go as the auditor for Yeongi Trading in my place.”
“Me?”
“Yes, you’ve learned a lot about textiles. I want you to go there, identify the problems, and come up with solutions.”
After a brief moment of contemplation, Lee Chang-sik answered firmly.
“If I take on the auditor role, I have a request, hyung.”
“What is it?”
“If you assign me this task, please give me full authority. Also, I’ll need funds that I can use freely for a while. There might be some bad news for a while, so can you promise to trust me no matter what happens?”
Lee Chang-jin looked at his brother anew. Although he didn’t know what he was thinking, the determined expression suggested he had some certainty. Most importantly, Lee Chang-jin knew his brother wasn’t someone who spoke empty words.
“Alright. Do it your way.”
“I’ll do my best.”
The first thing Lee Chang-sik did after taking on the auditor role was to drink with the plant manager.
Lee Chang-sik mingled with the managers and team leaders, drinking every night after the night shifts ended.
The workers, who had hoped for some change with the arrival of the auditor, couldn’t hide their disappointment.
“We were all tense because someone from the head office was coming, but it turns out the auditor is just a drunkard.”
“Who says otherwise? They say he’s the president’s brother, but he’s a total letdown.”
The controversy soon reached Lee Chang-jin’s ears. Secretary Yeo showed him the receipts.
“Director Lee Chang-sik is problematic these days. He’s not doing his job and is busy with drinking and women. It looks like he needs some control.”
“Has he changed? That’s disappointing.”
“I don’t understand. He wasn’t like this before. Did he have a lot bottled up? Why has he changed so much?”
Even Hwang Cheol-gwan, who had recommended him, was embarrassed by Lee Chang-sik’s sudden deviation.
Although many executives expressed concerns and complaints, Lee Chang-jin remained calm.
“He must have his reasons, so leave him be. He’s not someone who would waste company funds.”
As expected by Lee Chang-jin, Lee Chang-sik wasn’t just wandering around bars to drink. From the start, he was gathering information. It was easier to collect information in a relaxed environment like a bar than within the company.
Frequenting bars almost daily, he gathered most of the rumors and gossip about who was good at their job and who had issues.
However, one oddity was that the female employees working in bars or cafes treated the managers and team leaders with unusual respect, unlike regular customers.
When he subtly inquired from a bar madam, he received this explanation.
“Ah, that? Actually, most of the employees in these entertainment establishments used to work as factory workers. But things didn’t go well, so they ended up here.”
“Why would they leave their proper jobs and come here?”
“Well, there’s a place called Baekmajang near the industrial complex where local thugs harass the female workers from the factory. They wait in front of the company on payday to collect protection money.”
The young and powerless female employees had nowhere to appeal to, so they couldn’t resist.
The thugs didn’t just take money. They often harassed the girls, leading to unwanted pregnancies and severe troubles.
When such incidents occurred, the women had no choice but to quit their jobs, ending up in entertainment establishments. Hearing this, Lee Chang-sik couldn’t contain his anger.
“What? And they just put up with it? Why don’t they report it?”
“This is a rural area. The police and the thugs are all connected in one way or another. Even if they do something, it’s only temporary, and usually, it ends with a light fine or a warning.”
“Such parasites shouldn’t be left alone.”
After summarizing the situation, Lee Chang-sik immediately sent an SOS to his brother. Upon receiving the report, Lee Chang-jin shared the situation with Jin Seon-ah.
“Hmm, that sounds serious. It definitely looks troublesome.”
“Since it’s a rural area, fists rule over laws. It’s hard to resolve it autonomously due to the intertwined relationships among locals. It’s troublesome to leave it be, and I’m unsure how to handle it.”
“Reforming thugs? That’s our specialty. Leave it to us.”
Jin Seon-ah dispatched seasoned male employees and experienced debt collectors from Daehung Trading. They went around the factory area, politely persuading the thugs not to bother the female workers.
For those who didn’t respond well, they proceeded with legal action, accompanied by lawyers. This scared the local thugs, who were like frogs in a well.
“Let’s talk quietly. Why are you doing this to us?”
“It’s about money. Isn’t it natural to repay the borrowed money?”
Encouraged by Lee Chang-sik’s promise to actively help if they reported their damages, the female workers gathered the courage to speak up.
For those with extremely bad behavior, arrest warrants were issued immediately, and in some cases, their houses were auctioned off for compensation. However, most were settled by paying back double the amount they had taken.
“If you get caught harassing the female workers again, we won’t be this gentle next time.”
After this big commotion, rumors spread within the region that anyone messing with Yeongi Trading workers would have bad luck. With the thugs gone, the workers were relieved, and their morale improved.
However, the crucial issue of improving productivity remained stagnant. Pressed for time, Lee Chang-sik grew anxious. Then one night, a team leader, heavily drunk, candidly shared his thoughts.
“Director Lee, you’re so naïve. The workers here barely make ends meet with their meager wages supplemented by overtime pay. If productivity increases, their monthly income will decrease. Why would anyone work hard to improve productivity if it threatens their livelihood?”
Only then did Lee Chang-sik realize the real issue. Understanding the problem, he immediately convened a meeting with the plant manager and team leaders to discuss solutions.
“I promise you here. I will report to the president and ensure that your efforts are fairly rewarded with increased wages, even without overtime pay.”
A few days later, an all-hands meeting chaired by the plant manager, including company executives and team leaders, was held. They agreed on wage increases in line with productivity improvements and established rational principles for calculating the increase.
After the agreement, the team leaders decided to create a comprehensive manual for improving productivity, including equipment efficiency and work environment improvements. Upon reviewing the report, Lee Chang-jin immediately approved the necessary expenses for improvements.
With approval from the head office, Lee Chang-sik announced the new wage evaluation standards.
“The evaluation standard is simple. We will count the number of final products produced by each line and rank the performance. We will then pay performance bonuses according to the rankings, excluding defective products.”
In the presence of team leaders from each department, detailed wage adjustments were made. Individual wages increased uniformly by 20% to 40%, depending on the nature and contribution of the work.
Although the introduction of basic wage increases and performance-based pay was a bold move, concerns turned out to be unfounded. Checking the production volume after the wage increase, it was found to be 250% higher than before. The basic wage increase and the introduction of the performance system motivated increased efficiency.
With Yeongi Trading successfully normalized, expectations toward Lee Chang-jin rose even higher.
Along with this, Daese Beer’s stock price also showed an upward trend.
‘At this rate, recovering the previous market share is within reach.’
From Lee Chang-jin’s perspective, this was a favorable development. Just then, Yeo Jin-joo’s voice was heard.
“President, you have a call.”
“Who is it?”
“They didn’t reveal their identity, but they said it’s an important business call and would like to speak directly with you.”
“Really?”
When he switched to the call with the unidentified man, a suddenly calm voice was heard.
“Is this President Lee Chang-jin?”
It was a deep, heavy voice that sounded elderly.
“Yes, this is Lee Chang-jin. Who is this?”
“I’m Park Il-san from IB. Can we meet for a talk?”
- To be continued in Episode 119 -
