GLOBETECH Conference Log for 11/18/95

pj welcome to the negotiation China and Toyoyta! I look forward to a fair, win/win negotiation for both parties. God luck to both!

china2 ls

china2 are you receiving this message, type "yes dave" if you are toyota We assume that you have read our proposal and are ready to negotiate..

china2 we have read your proposal

toyota What propositions do you have for us?

china2 We only wish to contribute 30%, not 50%

toyota Is this the only point you find disagreeable?

china2 You have seen our request for proposal, I assume?

toyota Yes we received your proposal, and our counterproposal is a 50% equity input. By the way how is Jiang Zemin?

china2 A 50% equity input would require even more input for the Newchin Corp.

toyota once again was this the only problem with our counterproposal?

toyota how is Jiang Zemin. What's he working on these days?

china2 There are several discrepancies between our request and your proposal.

china2 We are borrowing 60%, as well as contributing to the equity.

china2 We are contributing an extremely fair share.

toyota We need to know Mr. Zemin's official title for our records.

china2 El Presidente

toyota If we put up 60% equity, would you consider increasing representation on the board of directors.

china2 Mr. Zemin's title is hardly relevant but if it matters he is the prime minister

pj China, please make clear what are your main goals for this joint venture (a few bullet points).

china2 We are borrowing 60% of the total capital.

toyota Can you please comment on our last inquiry.

china2 We wish to come up with a proposal that will benefit China and the foreign investor

china2 To do that, we need fair amount of capital input from both parties.

china2 We need fair amount of control on the Board of Directors for both parties

toyota that's what our fifty fifty proposal would imply

china2 We need an acceptable amount annual automobile production.

china2 The 50/50 proposal is not an even input of capital.

china2 The 50/50 proposal entails your contribution of only 50% of 40%.

china2 That would be a total of only 20% to the total capital.

china2 70% investment in to the equity for you is still only 28% input into the total capital, that is more than fair.

china2 Are you aware that we are borrowing 60% to go towards the total capital?

toyota We are ready to help you with the borrowing of bonds through our connections with the national banks in China. Therefore if we do increase input equity to 60% would that be satisfactory.

china2 You say you will 'help' with the borrowing, what exactly does that mean?

toyota Our reputaion in China givves us increased leverage with getting lower interest rates on loans.

china2 First of all, we would like proof of your connections in China. Second, what interest rates could you get us?

china2 I think it would be best if we discussed other aspects or your proposal.

toyota For instance?

china2 Can you provide us proof of your connections with Chinese Banks? [] China, please remember to discuss the important things first, such as: new technology, exports, good cars for China, etc. Do not get into a corner, in a not negotiable position. Remember, you need them just as much as they need you.

china2 Let's discuss production: Will the proposed company be able to output 300,000 cars per year.

toyota Give us a minute

toyota it seems to us that the problems in the negotiation lie in the total capitalization. can we hammer out this problem first.

china2 We might better be able to hammer out this problem after we have laid out everything.

china2 Let's take this from the top.

toyota fine. What is the first point to be discussed?

china2 As far as capital is concerned. We are willing to increase our capital input, however, we wish to have a majority share in the company.

china2 We are also willing to give you additional control on the board of directors.

<china2> Are you still there?

<china2> quit

<toyota> we are willing to fly to your country for further negotiations!