Rare Earth or Government Contracts?
Larbonne’s jaw dropped. The typically soft-spoken Frenchman sputtered to reply. He was aghast at being spoken to in such an impertinent tone.
Ranell held up both hands. “Wait Dominique, just hold on. Mitch is right.”
Larbonne’s eyes tightened venomously. Anderson sneered self-righteously back at him.
"Mitch is right,” he repeated. “The airships pushed us over the edge. We’ve got a 240-million-dollar loan to repay on six birds that can only handle twenty tons of freight each.” Ranell nodded his head as he looked at Anderson. When Anderson nodded his head back, Ranell knew they’d reached an understanding.
“We told him it was a stupid idea," Anderson growled.
"I'm not going to say it again. That's enough, Mitch. What's done is done." The threatening quality of Ranell's voice returned, and he succeeded in maintaining control, at least for the moment. "The fact is that all sectors of the economy are depressed, and negatively impacting all our cargo ships, aircraft, and long-haul truck operations. The CEO's decision to purchase the Lockheed-Martin Airships was just a case of bad timing. He couldn’t have known that the whole world would end up in an economic death spiral."
“He should have known,” Davis said bitterly. “Anyone could have seen this Depression coming.”
“We all talked about that, remember?” Ranell leaned forward in his seat, both hands flat on the table. “Right here in this very room. We went over the numbers; gross domestic product by country, global unemployment rates, regulatory burdens, tax structures, economic shocks… we war-gamed all the possibilities, and what did we come up with?”
“We told him the airships were a bad idea,” Anderson quipped. He refused to concede his point, but at least he was more respectful in making it, Ranell noted.
“We advised him against it,” Ranell conceded. “But remember, he has a vision of a new ‘race for the kingdom of the sky’ that we all agreed might transform the logistics industry.”
“They’re just forty-million dollar flying tractor-trailer trucks," Anderson objected.
“Yes, but with the capability of operating without any form of infrastructure; no roads, no ports, no runways. They can land anywhere, on water, ice and snow, a grassy field, even sand."
“Josef, there’s no way to see a return on investment with these aircraft.” Larbonne wore an expression of aching sympathy.
“I know, I know, Dominique.” Ranell closed his eyes and nodded his head. “We’ve been all through this. Bottom line: We need to decide right now how we’re going to move forward.”
“What do you need, Josef?” Stass asked gently.
“I need a way to pay the loan on the airships for as long as possible,” Ranell admitted. “Maybe, if we can hold out long enough, we can outlast this damned Depression. When GML finally goes bankrupt, maybe our employees will be able to move on. I need some fresh ideas.”
“I think we should take a gamble on the rare earth mines in Canada,” suggested Gordon Chow, the Managing Director for the Asia Pacific Region. “China has collapsed economically, and they continue threatening Taiwan to keep their domestic situation from spiraling out of control. The West has realized they need to be independent in terms of semiconductor chips, and Canada has the resources needed to supply the new factories being built in the Midwest."
“Plus, the airships’ ability to land on ice negates the need for the mining company to construct their expensive ice roads,” Larbonne offered optimistically. “The cost savings in infrastructure could be a significant addition to any contract negotiation.”
“Screw that,” Anderson huffed derisively. “War between Taiwan and China means government contracts to haul sensitive cargo at government-contracted rates.”
“What could our airships haul that the military cannot currently transport with fixed wing, rotor wing, or naval vessels?” Larbonne snorted.
Anderson looked at Larbonne like he had the word ‘Idiot’ tattooed on his forehead. “It’s the federal government. It’s vast. You lack imagination, my friend. There are a million opportunities for creative solutions to governmental problems. All at a great markup!”
The meeting wore on like this for several hours until Ranell finally had enough. “Ok, ok!” he said at last. “I’ve got it. We've reviewed our options, and it boils down to gambling on rare earth elements in Canada or pursuing a strategy to secure government contracts. I’ll call the boss and ask for a decision.
You are the CEO of GML. You make the call:
Choose Option 1: Risk everything on a hunch that the rare earth elements found at the mines in Canada will be valuable enough to supply the new US microchip manufacturing centers that are being constructed in the Midwest.
Choose Option 2: Limit your risk and pursue lucrative government contracts in what is likely to be a wartime environment.