As August drew to a close, the U.S. budget deficit kept rising, and the trade gap continued to widen. By this time, even the most shortsighted individuals recognized something was amiss.
"Tom, how are the products from United Microelectronics looking?"
"Boss, the quality doesn't seem very stable. It's not as good as the Japanese."
"I'm not clueless about the Japan's quality. We can't put all our eggs in one basket. You go over there personally. Their industrial park in Hsinchu is quite impressive. Look for more companies to outsource to."
"Sure thing, sir. I'll arrange it right away."
"There's a company called Formosa Plastics; they have a presence in the U.S. and are quite large. Unlike the Japanese, they prefer to do contract manufacturing. As for PDAs and learning machines, I'm not planning to stick to Japanese production anymore."
"Sir, will their quality hold up?"
"Ha, it may not be better than the Japan, but it's definitely way better than what we have here in the States."
Tom could only smile at the boss's complaints.
Wasn't that big brick just the same? If it had been handed over early to the Japanese, it might have already been on the market by now. It truly baffled him how the factories here were thinking.
When it came to the best contract manufacturers, Taiwan was certainly top-notch. It wasn't just because their quality was good or their prices were cheap.
Let's face it; even if your quality is excellent, it just about matches what the Japanese offers.
Finding a partner without defects is a terrifying proposition. Because you never know when that partner might decide to throw you overboard.
William White had a nagging feeling that the gaming companies in Japan were getting restless. To keep them in line, he had to make some moves of his own.
...
"Sir, we've handled all the fixed assets here. What's our next move?"
"Continue with the Japan as planned. This time, we buy in Marks."
"Got it, sir. Our debt level is pretty high; shouldn't we reduce some stock positions?"
"No need for that right now. You can formulate a repayment plan. By year-end, we'll clear some of that dollar loan."
William White was crazy if he thought of repaying loans now. The dollar was on the verge of plummeting, and this was the time to hoard non-dollar currencies. When would he get another chance like this?
Most developed countries' currencies would depreciate against the dollar. It was best to keep his distance from this guy for the time being.
No matter how much you sugarcoat it, currency depreciation is just outright fraud. The dollars sitting in your bank account might have bought you a nice new car, but now they could only get you something far less glamorous.
What else could you call it but robbery?
In the short term, imported products would still struggle somewhat as price increases were unavoidable.
...
"Sir, our assessment report has come in. The situation doesn't look too optimistic."
"And what if it isn't optimistic? Everyone is in the same boat. The world keeps turning."
Seeing his subordinate hesitating to speak, the old Morgan Stanley guy couldn't help but chuckle.
"The sky hasn't fallen, so just say it."
"Sir, according to this report, the companies under William White won't be hit hard at all."
"What? Why is that? Isn't he heavily importing Japanese products?"
The subordinate shook his head, smiling weakly. "Sir, he's merely authorizing processing, and he recently placed a sizable order. As for comics and toys, the impact is almost negligible."
"That can't be right; shouldn't the Japanese brands be increasing their prices?"
"The PS and PSP consoles have very steady sales in the U.S. His inventory can last at least three months now; the main sales are coming from Europe and Asia, and they aren't sensitive to exchange rate changes."
The old guy understood now: this guy wasn't producing anything himself; he had stopped even branding. He was just selling licenses. What mattered most was that his profits came from software.
The processing costs for game cartridges had been decreasing year over year; so what if the dollar depreciated? This fellow's costs might not even rise.
"Has he increased his position in Japanese investments?"
"No, the funds he's lately acquired seem to have all been invested in Marks."
"Marks? This guy really knows how to play the game."
...
These guys failed to realize that William White was proactively making future plans again. Putting so much capital into Japan was certainly risky. If those guys exploded early, he would find himself in a tough spot.
The U.S. government's idea of a secondary supplier actually made a lot of sense. Producing everything in one area is hugely problematic.
Heh, so there's really no right or wrong in this world; your perspective determines how you see the issue.
When faced with government demands, William White would rather forgo orders than engage any second suppliers. When it came to him, it was a different story; having multiple contingencies was essential; otherwise, the Japanese might just sell him out.
...
"Are you sure? They're going to put this order with United Microelectronics?"
"Absolutely. In fact, it wouldn't be beneficial for them to keep everything with the Japanese. Those guys might be planning to go at it alone."
"Alright, assemble a crack team; we can't afford any mistakes. This guy isn't easy to fool."
*****
https://www.patreon.com/Sayonara816.