The Mech Touch Chapter 980
978 Taking Advantage
His meeting with Marcella stretched out longer than Ves anticipated.
As Marcella was in control of five percent of the shares of the LMC and had a representative on the board, she was fully up to speed with its circumstances.
Ves listened and commented to her descriptions but overall he saw little need to issue new instructions.
"With Calsie, your grandfather and me in control of the majority of the shares, we have enough power to resist the worst excesses of the Ministry of Economic Development. None of us want the company to falter."
"That's good to hear. How is Calsie doing as interim CEO by the way? I've heard that she's been holding the fort to an extent."
"It's difficult to say." Marcella replied. "She has her own ideas on company policy. However, she's done an honest job adhering to your interests where it matters. The only problem is that everyone considers her a pushover, so she isn't able to wield as much authority as you. She clearly doesn't have the chops to be the leader of a multibillion credit mech company."
"The former is more important than the latter to me. Besides, as long as everyone else is doing an adequate job, the CEO doesn't really need to be an expert. If I put a more experienced executive at the helm, I risk inviting someone else's agent. I can't afford to take the risk of letting another influence gain an inroad into my own company." He said.
"That's really paranoid of you, you know. Why not let someone from the Larkinson Estate take charge instead?"
"The Larkinsons look out for the Larkinsons."
"You're a Larkinson as well."
"I am my own man."
That said a lot about Ves. Marcella declined to comment on that any further, as this was something personal between Ves and the Larkinsons.
Overall, even if it took a lot more time than anticipated, Ves learned enough about the company to reassure him somewhat of its continued existence even in his absence.
Marcella pressed the back of her hand against her forehead in a dramatic fashion. "I've worked very hard to keep the LMC's mech sales going, you know! The Bright Republic's mech market can only buy up so many expensive silver label mechs a month. I've constantly had to search for foreign partners in foreign states to export the rest of our mechs to. Word of mouth travels slower outside the Republic, and your mechs face much stiffer competition there. Still, I've managed to close enough deals to offload the bulk of the LMC's direct production to foreign states."
"I appreciate your effort, but don't think I'm aware of the real reason why you're doing so!" Ves chuckled. "You don't want your five percent stake in the LMC to become worthless. When the LMC prospers, so do you. It's in your best interest to help my company grow."
For now, Ves laid aside the fortunes of the LMC to the side. While he was tempted to take the reins again, his official duties made it highly improper to do so. In addition, with the Ministry of Economic Development continuing to exert their influence on the company, it wasn't as if anything Ves tried to do would stick.
He recognized that the only way to rid the LMC of this scummy ministry's influence was to replace it with a better government institution.
His current mission on behalf of Flashlight might pave the way for that if he performed up to their satisfaction. Ves should get a move on to performing his actual duties as opposed to spending time in Marcella's office.
That didn't mean he had no way of influencing the fortunes of the LMC while he was working for Flashlight, though. A devious light entered his eyes.
"Right now, I've been pulled from my previous assignment." He explained. "The Mech Corps has seen fit to turn me into a liaison mech designer for the Kadar-Neyvis Group."
Marcella looked impressed. "From the medals you've earned, there's no doubt you've earned a break. As for the KNG, that's a rising star among the local mech companies! They're substantially more developed than the LMC and they're continuing to rise under the leadership of their two Journeyman mech designers. I think it's a really good opportunity for you to learn the tricks of the trade from them if you're assigned to babysit the production of their military mechs."
"I intend to do more than that." Ves smiled. "The important thing here is that I'll be showing up in public in my current appearance from time to time. Tell me, how will the public respond when they see me like this?"
He tapped his ribbon rack for emphasis. There was no way Marcella missed the message.
"Darkness Eater, Torchbearer, Golden Mech, War Saint, Frontier Service Medal, Mech Corps Commendation… you sure know how to stand out, Ves. I can see the news portals and the discussion forums on the galactic net going wild for a time." She snorted with amusement.
Ves smirked. "Let's capitalize on that. While I'm not allowed to shill for my company while I'm in the service, just showing up in public from time to time will be sufficient to arouse everyone's interests. I want you and the LMC to take advantage of all of that attention and help my company sell more mechs!"
Her eyes gleamed. "What a great idea! Although I don't expect the interest in your possible exploits to last, the LMC will surely be able to leverage your reputation to increase their sales in the domestic market! It will even have a ripple effect on your foreign sales, though not as directly."
Both of them began to scheme how they could turn his dashing appearances into a short and long-term marketing advantage. The initial boost in interest would be the biggest, but as long as Ves didn't tarnish his reputation, his company would definitely continue to stand out against the competition by the mere fact that it was founded and led by a war hero!
Marcella showed some misgivings, however. "I don't disagree with you Ves, but don't think you are capitalizing on your elevated status a bit too blatantly? Earning those distinctions is a personal honor. I don't think the Mech Corps intended to give them to you just so you can profiteer off the good associations those medals carry. All the other honorable bearers of the Darkness Eater will resent you for being so shameless."
"Every businessman has to learn how to be shameless." Ves casually dismissed her concerns. "I'm no different than the winning athletes of the Rimward Games showing up in commercials to shill for various products."
"I don't think the Mech Corps will appreciate some of their prestigious awards being devolved into devices for commercial gain."
"Then they shouldn't have awarded them to a business owner like me in the first place."
"I think I understand now why the Mech Corps almost never awards their more prestigious medals to mech designers."
Nevertheless, the marketing push concocted by Ves and Marcella benefited her substantially, so she did not object too strongly. In the face of naked commercial interest, personal honor no longer became a concern.
After shaking their hands to conclude this new arrangement, Ves asked one more thing before he bid her goodbye.
"By the way, you seem to be a little familiar with the KNG. Can you tell me more about the company I'm about to liase with on behalf of the Mech Corps?"
"Sure." As an insider in the Bentheim mech industry, she knew almost all of the larger players. "The KNG has a rich mech catalog in both spaceborn mechs and frontline mechs. Kadar specializes in designing spaceborn mechs while Neyvis excels in designing frontline mechs. The KNG therefore has a strong presence in the lower end of the mech market. They have a strong cross-border presence as well, but they still derive most of their sales from the domestic market."
The KNG differed from the LMC in that their pair of Journeyman Mech Designers were good enough to compete directly against the mainstream mech models in some of the major market segments. While the mainstream mech models always won out slightly in terms of price to performance ratio, mechs designed by locals were a bit more suitable for use in practical terms.
Marcella showed him some of their publicly disclosed figures. "This is where the KNG's mechs excel at. Their mechs are easier on the pocket books compared to the well-engineered mainstream mech models that are lot more finicky to maintain and troublesome to repair."
This was the predominant business model among mech manufacturing companies with the chops to compete directly against the popular mech models. While they still couldn't beat the sheer design talent and insane level of optimization in the hands of the big trans-galactic enterprises, their products nevertheless didn't entirely fit the local circumstances.
The disparity between a mech designed by an Apprentice and a mainstream mech model was quite big. The gap in performance when everything else was equal made it so that Apprentices couldn't charge the same price for their inferior products.
A Journeyman on the other hand possessed the ability to design a mech where the performance gap narrowed to a small enough margin that many customers could be persuaded to purchase local products instead. Of course, it took savvy marketing, a trusted brand and good performance in the field to be able to snatch up a significant amount of market share in multiple segments.
"It sounds as if the KNG are doing well for themselves."
"Not exactly." Marcella shook her head. "Their foundation is strong, but the adverse business climate that has swept over Bentheim affected the KNG much more severely than your LMC. Do you know why?"
It took a moment for Ves to recognize the crucial difference. "The LMC is a lot smaller, but my company mainly sells premium mechs with high profit margins! Even if production costs have risen lately, my company can still absorb the pain by giving up some of the profit. The KNG on the other hand has much less room for maneuver."
"Exactly. I mentioned earlier that the KNG mainly services the lower end of the mech market. Their annual production volume is a lot larger than that of the LMC, but the profits of each mech sale is no more than one to three million credits for their cheaper offerings. A twenty percent increase in the cost of production can easily wipe out those razor-thin profit margins."
"How has the KNG responded?"
"They're aiming to maintain their market share and market presence by selling their mechs at a loss. Keeping their manufacturing complexes operating at full capacity also allows them to retain their favorable bulk contracts with material suppliers as well as retain their large body of trained and loyal fabricators and mech technicians. All told, they are losing up to a million credits for each mech sold!"
Ves nonetheless widened his eyes. "Are they even allowed to do that, Marcella?! How can they even sustain such a loss-making venture!"
"Well, there's rumors that someone in Rittersberg is very friendly towards the KNG. The Ministry of Economic Development has a good relationship with Mrs. Kadar from what I've been told. MinEcDev has even offered to help the KNG absorb their losses with subsidies and interest-free loans."
Ves wanted to vomit when he heard that. The disparity in treatment towards the LMC and the KNG couldn't be more stark!
"Also, Mr. Neyvis has the backing of his family which owns a long-standing company in Bentheim, so the KNG is not at risk of running out of funds anytime soon. The calculus of the company is to ride out the war and make everything back when they capitalize on the decreased competition and recovering market prospects."
Even so, there was no way the Kadar-Neyvis Group could get away with this much without the advantages bestowed by their connections!
Ves always believed that government and business shouldn't mix, but evidently the KNG found a way to make that work!
Still, this entire situation sounded a bit too fishy. Selling mechs at a loss would definitely be a huge burden to the KNG regardless of all the help they received. Such a desperate circumstance may make them vulnerable to certain solicitations, perhaps even from the BLM...