Bab 200: Chapter 200: Alliance of Interests
"Why the sudden increase in investment?" Hardy inquired.
He already had some suspicions.
Meyer explained, "Initially, our partners were Pepsi, Crocker Agricultural Products, Mersey Pharmaceuticals, and you and I, contributing 20 million yuan."
"Later, when you mentioned adding 50 million, I informed my partners. They decided to bring in new investors—Bank of America and Lockheed."
"When they learned about your new casino project with a 100 million yuan investment, they deliberated and agreed that a larger investment would be advantageous. So, they decided on a final amount of 100 million yuan."
"Bank of America has assured us they will safeguard the remaining funds after other investors' shares are removed."
Hardy thought to himself that Meyer might struggle to manage everything in the end.
Originally, Hardy had promised Meyer the opportunity to invest in Las Vegas casinos. Meyer's idea was for MGM to dominate the stock and control the casino. However, with the involvement of major capital, MGM had become marginalized.
In the face of Bank of America's colossal presence, MGM was insignificant.
Bank of America saw the Las Vegas casino as a lucrative opportunity and wanted to capitalize on it.
"Is there a plan for the distribution of shares?" Hardy asked.
"Meyer replied, "Mr. Amadi Giannini, the chairman of Bank of America, wishes to meet you before discussing the equity distribution."
Hardy realized that the interest was not just in the Las Vegas gambling industry but also in himself.
"Not a problem, Mr. Meyer. Please arrange a meeting with Mr. Giannini," Hardy said.
Such encounters were inevitable for someone experiencing rapid growth. Being in California, where his industry thrived, Hardy was naturally a target for local consortia. It was only a matter of time before such interactions occurred.
This development came sooner than expected, likely because of his swift progress and the attractive aspects of his ventures.
After hanging up, Hardy contacted Henry. "Henry, gather detailed information about the California consortium. The more thorough, the better."
"Got it, boss," Henry responded.
Meyer acted quickly. The next day, he called Hardy with news that Mr. Giannini wished to meet as soon as possible. The meeting would be held at Giannini's San Francisco manor. Hardy could visit at his convenience.
"I'll be there tomorrow. I'll officially meet Mr. Giannini at three in the afternoon," Hardy confirmed.
"Understood. I'll inform Mr. Giannini," Meyer replied.
The following day, Hardy boarded his private jet, a B29 bomber converted for personal use. The jet, now without bombing equipment, was fitted with 12 business seats and a separate room with a large bed.
Although the bombing equipment had been removed, Hardy retained the machine guns: twelve 12.7mm M2 machine guns on various sides of the fuselage and a 20mm M2 machine gun on the tail turret.
Only Henry and Andy accompanied Hardy. The San Francisco HD Security Company would handle safety and security upon arrival.
During the flight, Hardy reviewed the information on the California consortium. It reminded him of the ancient principle: "Know yourself and know your enemy, and you will never be defeated in a hundred battles."
The California Consortium, centered around Bank of America, included Safe Pacific Corporation, Crocker Agricultural Group, San Francisco Group, Wells Fargo, Lockheed, Lipton Industries, Northrop Grumman, Philco, Schervania Electronic Equipment, San Francisco Electric Company, PRC Real Estate Development, California Life Insurance Company, California Transportation Company, California Petroleum Company, Los Angeles First Bank, Martin Marietta, Kaiser Motor Company, Kaiser Steel, Kaiser Aluminum, and Chemical Company.
Through cross-shareholding and joint agreements, the consortium's total assets amounted to approximately $8.5 billion.
Unlike pre-WWII family consortia like Rockefeller and Morgan, which were family-centered, the California Consortium was a local alliance. It had benefited from WWII's rapid development and was formed through a more fluid cross-shareholding approach. This made it faster to expand but also potentially more fragile compared to family-centric models.
After reviewing the information, Hardy contemplated the upcoming meeting with Mr. Giannini.
Andy, observing Hardy's deep thought, guessed that Hardy had specific plans for the meeting.
After some time, Hardy looked at Andy. "Andy, if someone offered to buy our property, what would you be willing to let go?"
Andy considered for a moment. "Aside from HD Security, ABC TV, and Hardy Hotel, everything else is negotiable."
Hardy smiled and shook his head. "I think the Hardy Hotel should be replaced by Global Times."
Andy was surprised. "You're willing to let go of the casino business?"
"Businesses focused solely on making money can be let go if a more lucrative opportunity arises. Andy, what do you think we lack the most right now?" Hardy asked.
Andy, with his banking background, answered promptly. "We lack a bank. All major consortia are built around one or more banks, with other industries as pillars. If the Hardy Group had its own bank, it would be like an eagle spreading its wings and soaring."
Having been a banker himself, Andy understood the vital role a bank played in enterprise operations—from investing and stock trading to financial management and inter-company settlements.
"I agree," Hardy said. "I thought a bank was too early to consider, but maybe this is an opportunity."
"What are your plans?" Andy inquired.
"We'll see. It all depends on how Bank of America plans to cooperate. For now, everything is speculative," Hardy replied.
The plane landed smoothly at San Francisco Airport. HD Security's local team awaited their arrival. Hardy, Andy, and Henry were transported to Giannini Manor.
At the manor's entrance, a group of staff greeted them. The butler, looking into the car, said, "Mr. Hardy, Master has been expecting you. Please come in. He is waiting in the lobby."
The convoy entered the manor. Hardy exited the car, and a servant opened the door. Inside, a sprightly elderly man stood in the hall. Hardy greeted him with a smile. "Mr. Giannini, it's a pleasure to meet you. I'm honored to visit."
Hardy had read about the elderly man: 76 years old but still actively leading his family business.
Giannini extended his hand for a handshake. "Although I knew you were only 26, I'm still surprised to see you. In just two years, you've built a remarkable career."
"You're too kind," Hardy responded modestly.
"Let's sit down and talk. What would you like to drink?" Giannini asked with a smile.
"Tea," Hardy replied.
Giannini nodded. "I enjoy tea as well."
They sat down, and their aides stood at a distance, including Andy, who remained seated far away.
"Hardy, I'm very interested in the Las Vegas casinos. It's rare for someone to intervene in the Las Vegas market so freely. I appreciate the opportunity you've provided," Giannini said.
"I believe that collective success fosters growth," Hardy said with a smile.
"That insight is rare. I only realized this at forty. Unity leads to greater profits," Giannini remarked.
"So, what's your opinion on the new casino investment?" Giannini asked.
Hardy paused before replying. "I propose to retain 20% of the shares. If I manage the operation, I would prefer to receive operational dividends. If not, then I'd settle for equity dividends."
Hardy's approach was deliberate and non-confrontational.
Giannini observed him thoughtfully and said, "I believe it's best for you to manage it. You're most familiar with this area. The previous Hardy Hotel was exceptionally well-run. I trust your capabilities."
"If I am to manage it, I have one condition," Hardy said.
"Go ahead."
"During my tenure, I must have full management rights without shareholder restrictions. The agreement can specify terms, but if mismanagement leads to significant losses, the full management rights will be revoked, and shareholders will make decisions," Hardy stated.
Given that the casino investment was not aligned with the consortium's core interests, Hardy wanted to ensure he wasn't subjected to manipulation by shareholders.
Giannini seemed to see through Hardy's young facade and recognized the experienced strategist behind it.
The elderly man nodded. "I agree with your terms, and I'll support them on behalf of Bank of America. Specific shares, dividend ratios, and management shares will be discussed with other partners."
Hardy knew that as long as Giannini agreed, the matter was nearly settled.
Giannini sipped his tea and, after setting down the cup, asked, "Hardy, what are your plans for future industry development?"
Hardy sensed that Giannini's question was more than just a preliminary remark and anticipated further discussion.
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Bab 201: Chapter 201: This Young Man Is So Shameless
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"We won the Second World War. We are the biggest beneficiary country. There is no doubt about this. People like a stable life. In the future, all products for people's livelihood will sell well. We can increase investment in this area."
"With abundant supplies, people will pursue a higher quality of life, and entertainment is essential. In the future, entertainment will continue to develop rapidly, and there is still a lot of room for money in movies, TV, and records."
"In the future, oil will continue to be one of the most profitable industries. At the same time, all chemical industries derived from petroleum will be used in large quantities for people's livelihood, as well as the automobile industry. Car ownership currently only accounts for 5% of national households. This number will increase greatly in the future, with at least one car per family."
"The military industry will definitely be highly valued by the government because we rely on advanced weapons to achieve victory. The government hopes to always maintain an advantage. Therefore, we will not hesitate to invest in the military industry. There is only one order from the Ministry of National Defense. I don't know how many companies we have to support."
"I think the export industry will see significant improvement. World War II has caused a great blow to many countries, such as our allies Britain and France. They need to rebuild. There is a huge demand for steel and building materials, which will also drive domestic steel production, leading to increased steel prices and output, naturally developing the mining industry and earning more."
"There are also Asian countries. After this war, the suppressed countries have suffered enormous disasters and will become huge markets for development in the future. You should consider deploying there in advance."
Amadi Giannini looked at Hardy, trying to conceal the shock in his eyes. Many of Hardy's insights aligned with the analysis of the Bank of America think tank.
Although the think tank is not yet established, Bank of America has several predecessors that function similarly, analyzing future development trends through political, economic, social, military, diplomatic, technological, and other information.
Gianini has always found these think tanks very helpful and relies heavily on them. Recently, they have made predictions about the future direction of the US economy and industry development.
Hardy's predictions about people's livelihood, entertainment, steel, building materials, automobiles, the military industry, and even exports closely match the think tanks' analysis.
The old man is astonished that Hardy's analysis aligns so closely with conclusions drawn from extensive data and internal government information. It seems improbable that Hardy could have access to such detailed information, given his lack of deep connections with the government.
However, his analysis is so precise that it reveals Hardy's extraordinary intelligence and sharp vision, allowing him to foresee such extensive developments.
No matter who it is, being able to predict the direction of the next few years, or even one or two years, and then working diligently in that direction, is a sure way to achieve significant success. It is no wonder Hardy has achieved so much in just two years.
But what Hardy said differs slightly from the think tanks' analysis, particularly regarding Asia.
The think tanks had analyzed that Asia would have no development prospects for at least ten years, making it an area not worth investing in. Currently, Bank of America's focus should be on China and a small amount in Europe.
In fact, this strategy aligns with the approach of most American companies.
At this point, Hardy smiled and said to Giannini, "My previous industries were basically in these directions: ABC TV, film companies, airlines, Playboy magazines, TV companies, cosmetics companies, and so on. These are all people's livelihood industries. With intensive cultivation, they still have a lot of room for development."
"Also, the gambling industry is a major player in development. I believe that in the future, Las Vegas will become a gambling city in the United States, and even the world. As long as this famous brand is established, it can attract many tourists and spenders. It is definitely a lucrative industry and will continue to grow."
Giannini nodded. "I know about your Hardy Hotel. To be honest, your business strategy has many unique features, especially the TV lottery and proxy investment companies, which cleverly avoid the state's restrictions on lotteries."
"I heard that the TV lottery event is more profitable than the casino itself, isn't it?" Giannini asked.
"It is true. It is currently stable at around $60,000 per draw, with annual income exceeding $30 million. Including the casino, it should be around $40 million," Hardy replied.
Giannini was impressed. "Our Bank of America, with dozens of cooperative companies, has an annual profit of just over $200 million, while your small casino achieves annual revenue of $40 million. Such profits are indeed enviable."
"Hardy, will the new casino include this project?" Giannini asked.
"Of course, but the use of TV station resources and proxy investment companies requires additional payment. At that time, management will negotiate with ABC TV and the proxy investment companies," Hardy said.
Giannini looked at Hardy, realizing that this young man is quite the shrewd operator. Management is you, ABC TV and the proxy investment company are also yours. You negotiate with yourself, and ultimately, all the money goes into your own pocket. The calculation is truly astute.
Noting the time, the old man said, "I take a walk in the yard every afternoon. The sun is nice today. How about we go for a walk?"
"Sure," Hardy agreed, standing up.
The two walked out of the house into the expansive garden, which connected to the hills at the back. The grass stretched out endlessly.
Giannini gestured to a nearby servant, and the butler soon delivered a box. The old man opened the box and took out two trimmed cigars, handing one to Hardy.
"Care for a cigar?"
Hardy accepted the cigar and smiled. "Davidoff, this cigar is famous for Churchill."
"Yes, I like this taste," Giannini said.
They lit their cigars and walked slowly forward. The surrounding people did not follow but kept at least 30 meters away, maintaining distance.
"Hadi, are you familiar with our Bank of America?" Giannini asked.
"I know a bit, mostly the data announced publicly," Hardy said.
The old man smiled. "Bank of America now has over 400 branches in every city in the United States. Last year, our users reached 5 million, and the bank's total assets amounted to $11.6 billion."
Total assets are not the same as market value. Bank of America's market value is currently around $2 billion.
"Bank of America has also invested in several companies, including Wells Fargo, Lockheed, Litton Industries, and Northrop Grumman. I believe they all have bright futures."
Hardy acknowledged. "They do have promising futures. Lockheed will become the world's largest arms dealer, Northrop Grumman the second largest, and Litton Industries the fourth largest arms dealer in the United States."
"Bank of America has also invested in other banks, such as the Bank of San Francisco, Los Angeles City Bank, and Wells Fargo. We are involved in insurance, mining, metal smelting, and agricultural products. Including all our partners, our scale has exceeded $20 billion."
Giannini played a little with the figures, talking about scale rather than assets. The total assets of the California consortium are currently over $8 billion. While some companies look impressive, their actual scale might be only in the tens of millions.
However, even tens of millions is significant in this era.
The old man let Hardy digest this information while they continued walking, smoking their cigars.
"Hardy, are you interested in joining us?" Giannini finally asked.
Hardy had suspected that Giannini's invitation was more than just a casual walk. It was clear that their conversation might involve major investment projects, and Giannini wanted privacy to discuss them without outside interference.
Hardy had anticipated this move from the California consortium and had already considered his position.
The California Consortium is an emerging force after World War II, and joining it now means being part of its early development. Although Hardy could rely on his experience to develop independently, it would be a tougher road compared to collaborating with the consortium.
Joining a consortium offers many benefits, primarily through resource integration. The California consortium nearly monopolizes industries on the West Coast, and being part of it means easier access to resources and support for future developments.
Of course, joining such a consortium requires contributing to its success. It is a mutually beneficial arrangement where both parties gain from each other's resources and expertise.
For example, the construction of Hardy's new casino in Las Vegas involves hundreds of millions in investment. This requires construction companies and suppliers, many of which are within the consortium. Using consortium resources can save costs and resolve financial issues through reliable partners.
Furthermore, controlling the underground power in Los Angeles is a significant asset. The consortium sees the value in Hardy's control over the Mafia's influence, which can prevent commercial attacks and secure business operations in key markets.
Giannini knows that Hardy's influence extends to half of the Mafia families, making him a valuable asset for the consortium.
Hardy didn't immediately respond. He continued to walk and smoke, contemplating the offer.
"Mr. Giannini, I would like to request a few things," Hardy finally said.
"Oh? What are they?" Giannini asked.
Hardy took a breath and said, "I want you to help me acquire Wells Fargo. Bank of America holds 12% of its shares and is the second-largest shareholder. I'd like you to assist with the acquisition, and I hope you can lend me the necessary funds."
Giannini was taken aback. Hardy was essentially asking for the Bank of America's help to acquire a bank without investing his own money. The audacity of such a request was astounding.
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