Hétóng Rén's Offer
“Is that it?” Even through the static of the satellite phone conference call, Mitch Anderson’s voice was incredulous. “This Chinese guy just wants to buy all our airships?”
“Technically, he wants to pay off the loan in exchange for a controlling interest,” Ranell explained again, his patience wearing thin. Mitch never liked this idea, but does he have to be so self-righteous about it?
“Look, Chief," Anderson continued, “at best, this plan to use the LMH-1s to haul ore was a long-shot gamble. With Tesla coming online with their new zero rare earth battery, the market demand is bound to crash. GML is dangerously exposed. I say, take the deal.”
Before Ranell could answer, Dr. Larbonne, his senior advisor, interrupted, “Josef! How can we possibly even consider such a thing?”
His accent gets so thick when he gets mad that I can barely understand him. "Settle down, Dominique. I’m listening.”
Ranell could hear Larbonne force himself to take a breath before he spoke again. “You know that the CCP directly or indirectly controls all Chinese corporations of this size. The Chinese Communist Party, Josef! You know the ‘controlling interest,’ as you so politely phrase it, is a deal with the devil. What happens to our employees when the CCP is calling zee shots?”
Anderson cursed. "There's not going to be anything left to control! In case you haven't noticed, we're already in the middle of a financial meltdown! The new Republican president will cut back on government spending, and austerity will kill all the markets. If we don't take this deal now, we'll all go down with them. I say take it!"
Larbonne matched Anderson’s curse with something terrible uttered in French. “Zees is no time for your petty politics, Mitch! We know the current administration's policy is to continue raising interest rates to control inflation." He turned his attention back to Ranell, “Don't take the deal, Josef,” he pleaded. “You told us that taking care of our employees was zee most important thing to do, even if it cost us the company. With the way things are going, we might be able to save them both! Don’t sell out to the CCP.”
How did I end up at the center of a decision like this? Fear gnawed him, and Ranell fought down a wave of nausea. After a long pause, he said, "OK, I've got it. It's clear to me what's at stake here. Let me call the boss."
You are the CEO of GML. You make the call:
Choose Option 1: You've already bet big, first with the airships and then with rare earth. Inflation is likely to continue, and now GML is well-positioned to exploit that. Refuse Hétóng Rén's offer and maintain control of your corporation. This is a solid plan. GML may avoid bankruptcy.
Choose Option 2: GML is already at risk of bankruptcy, and your main goal now is to buy time for the employees. The global demand for rare earth minerals is likely to crash. Hétóng Rén’s offer solves all your problems instantly, but at what cost later? Consider this offer further.