Movers and Shakers: Business Proposal

[Velok the Younger]

BRIEF

The founders and primary shareholders of Akure Executive Leatherworks (AEL) are pleased to tender an offer for the purchase of Iron Crown Productions (ICP). ICP is a parastatal, wholly owned by the Fringe Confederation. It owns and operates major shipyards at Rakata Beta, Lwhekk, and Annaj, and produces the vast majority of the Fringe Confederation's warships. AEL is in the process of securing investment capital from a variety of sources in the private sector, including the Core, the Corporate Sector, and the Tion Cluster. The primary investor is Rave Merrill, an emeritus member of the Fringe High Council, formerly responsible for military procurement.

RATIONALE: Foundation

ICP's growth has, thus far, relied on four factors, each of which has also presented liabilities which privatization would help solve. The first is a high volume of designs; ICP has designed and produced nearly every capital starship in Fringe territory. This has disincentivized quality control and efficiency markers.

The second factor is ICP's virtual monopoly on Fringe military contracts. This has disincentivized quality control and efficiency markers, and has led to complacency and waste within ICP and within the Confederation's procurement structure.

The third factor is ICP's virtual monopoly in isolated markets throughout the Unknown Regions. This has disincentivized quality control and efficiency markers.

The fourth factor is the wide variety of starship designers employed by ICP at one point or another. This, too, has disincentivized quality control and efficiency markers. Additionally, it has contributed to what some military analysts see as a disorganized navy, with uncomplimentary fleet compositions. ICP's vessels are not designed to work together for maximum efficiency. This was one major factor behind the naval loss at Eriadu.

Additionally, parastatals often suffer from quality control and efficiency issues. ICP's internal audits, when conducted at all, reveal that corruption, prebendalism, nepotism and political appointments are costing the Confederation unseemly amounts of money.

In short, ICP has invested too much in too many products for too few customers, and its sole source of income is the Fringe Confederation. Its incentives tend towards inefficiency and prioritization of privilege over the good of the company or the Confederation.


RATIONALE: Prospects

ICP is located in a favorable strategic position, both in terms of its near-total market share dominance in the Unknown Regions, and in relation to other starship manufacturers.

Thus far, ICP has sold galactic standard technology throughout the Unknown Regions, ie, the region under Fringe Confederation hegemony. ICP has not, by and large, attempted to corner the galactic market for the products of the Unknown Regions, an option that has often been discussed but never implemented. Private sector leadership from experienced business professionals is absolutely essential for this transition.

Santhe/Sienar's development and marketing are both lacklustre, Silk Holdings and Corellian Engineering Corporation likewise, and Kuat Drive Yards even more so. The common wisdom is that the market is oversaturated with starships. However, our investors believe that the converse is true. A substantial market exists for the kind of aggressive, high-independence small capital and subcapital vessels that ICP has done well in the past, assuming that the right expertise can be applied. AEL's investors specialize in branding and rebranding, and in the exploitation of unrealized market niches, including close relationships with the Tion Hegemony.

Additionally, AEL's investors can provide unique access to products and services which have benefited exclusive, innovative starships from other manufacturers, such as the Calrissian-class from Silk Holdings.


QUANTITATIVE OFFER

Attached is a financial statement and letter of intent regarding the proposed purchase of 70% of ICP by a select group of investors. 30% of ICP's profits would remain in the hands of the Fringe Confederation. Our proposal is not a matter of full privatization, for the following reasons:

• To retain employee allegiance to the Confederation;
• To retain the Confederation as ICP's primary partner in business;
• To retain confidence in retention of existing facilities and assets within the Confederation;
• To avoid potential unrest within employees and Unknown Regions trading partners.

If this offer is accepted, the investors would undertake the following as top priorities:

• Evaluate ICP's existing products according to the Confederation's military needs, including compatibility and complimentarity with each other;
• Evaluate ICP's existing products according to galactic military competitiveness;
• Raise capital via strong exploration of the open market, including sales of all but the most advanced proprietary technology, as well as blueprints and production rights of second-tier product lines;
• Explore sales partnerships with governments which lack shipbuilding capability and/or primary providers in the shipbuilding department (potentially including the Imperial Remnant, Silver Jedi Order, Levantine Sanctum, Empire of Panatha, and Shadow Empire).
• Design (and/or acquire production rights for) starfighters to replace the Subach-Innes-designed starfighters which the Confederation has always used;
• Develop Unknown Regions products for the galactic market.

[member="Anders Sivas"] [member="Sargon Vynea"] [member="Lucianus Adair"] [member="Lucien Cordel"] [member="Spencer Jacobs"] [member="Darth Vornskr"] [member="Jared Ovmar"] [member="Brom Burnside"]

 

[Yasha Cadera]

A correspondence comes through for [member="Rave Merrill"] from the office of High Councillor Anders Sivas, Military Affairs.

After reading the Business Proposal Brief, my division has the following queries:

• We desire a list of the Investors who would be purchasing ICP & biographies of their dealings in business affairs.
• What assurances would we have of the quality & proprietary secrecy of the proposed upgraded Fringe Naval Fleet's ships?
• 70% is High.
• What holdings would the ICP maintain in the Fringe Confederation itself? How many jobs would you be adding to our economy?
• How many employees would you propose to sack in your clean-up of the ICP? What would be your rationale on their replacement?
• Dictate your 5 & 10 year plans for expansion should you succeed in your buy-out bid.

Sincerely,

High Councillor Anders Sivas

 

[Velok the Younger]

[member="Anders Sivas"] [member="Lucianus Adair"]

Item 1: Shareholders would include Rave Merrill (CEO, Akure Executive Interstellar; former CEO, Mohc Extractives) as majority holder, as well as [member="Jared Ovmar"] (former COO, Santhe/Sienar; CEO, NeuroSaav) with a substantial minority share.

Item 2: The primary assurance would be ICP's continued primary operation in highly secure Fringe star systems (Lwhekk, Rakata Beta, Annaj, 244Core). It would be against ICP's interests to jeopardize the interests of the Confederation.

Item 3: The purchase and reform offer is valid for any majority share of ICP above 56%.

Item 4: ICP would retain the Lwhekk yards, the Rakata Beta yards, the Annaj yards, as well as the subsidiary facilities on Xal 3, Verkuyl, 244Core, O'reen, and Riflor. None of these locations are irredeemable; restructuring will take place solely within each given system. We intend to significantly expand operations on 244Core, specifically, both due to its metals and refined materials output and due to its longstanding position as a local Unknown Regions trade hub. Vertical integration would include improved holdings on the planet and a substantial orbital facility. We estimate 200,000 new jobs on or around 244Core within the next three years. Another primary case is Annaj, whose shipyards have not been expanded since their initial construction. Our Annaj team anticipates at least two million new jobs over the next five years. A system-by-system breakdown of anticipated employment figure adjustments has been attached. Likewise, we intend to open sales and shipping facilities in or around the Tion Hegemony Trade Nexus, the supermajority of which facilities will be staffed by Fringe citizens.

Item 5: Like many parastatals, ICP currently suffers from a somewhat top-heavy employee distribution, often due to patronage. We anticipate a 25% reduction in middle and upper management over the next six months (a more comprehensive breakdown is attached). Comparison with the numbers from Item 4 will demonstrate that, in real terms, ICP will hire far more than it fires.

Item 6a: Our five-year plan is also attached. In broadest terms, ICP intends to aggressively pursue trade goods from a series of seven primary and twenty-eight secondary current and future trade partners throughout the Unknown Regions, with an eye to consumer markets in the Galactic Core. Elements of unique Unknown Regions technology can already be found in ICP's starship lines; in order to maximize competitiveness, we intend to make those elements our focus via the starship components market. We believe that through close partnerships with member corporations of the Tion Hegemony trade association, we can place ICP components in a majority of the galaxy's publicly available starships within five years.

Item 6b: Our attached ten-year plan is, functionally, three plans, based on what our analysts consider the three most likely growth outcomes for the Fringe Confederation. Based on territory which may become more secure and assets which may become more available depending on the growth of the Confederation, ICP is prepared to examine expansion of manufacturing assets towards Phu and down the Sanctuary Pipeline, for example. Such facilities would be devoted to starship component manufacture, as ICP controls the three largest shipyards in the Unknown Regions, including the planetary-scale Lwhekk yards. Within ten years, we intend to be using all three shipyards at maximum capacity, without the scheduling gaps and inefficiencies that currently plague ICP at the middle management level.

 

[Yasha Cadera]

A further correspondence trickled through from the Office of the High Councillor Anders Sivas, Military Affairs.

After reading your rebuttal, I have come to the following conclusions:

• Philosophically I am for the Buy Out Venture.
• Give me a personal 5% Share Stock Initiation Bonus on this deal, and I'll help sway the remainder of the High Council. This brings your percentage to 65% total ICP shares and gives [member="Jared Ovmar"] a bright and shiny grin for old time's sake.
• In the long run I am assuming the enclosed numbers are accurate projections of the futures you expect. After consulting these futures, I have come to the conclusion that the percentage left to the Fringe Confederation's Public fund will increase enough to substantially re-pay the loss of investment control.
• Make my military cool things.

Sincerely,

High Councillor Anders Sivas.

One Vote For 65% Take Over Bid of ICP

 

[Velok the Younger]

[member="Anders Sivas"]

High Councilor Sivas,

We wholeheartedly support your counter-proposal.

 

[Lucien Cordel]

Lucien put his coat over the back of his office chair, and sat down. Indicating his assistant to pour him a brandy. Then he turned his attention to Rave Merrill "You will forgive me I was rather engaged, now I am not an economist when it comes to shares and such matters so I will avoid talk of share price and internal transactions" he mused, the brandy was placed down next to him he picked up his glass "I am unsure of the human cost and the cost for us in tax, you say you wish to cut down upper and middle management what is your severance package for these people and their families and will the new employies tax contribution match that of the soon to be ex management?" He asked taking a sip of his brandy "I appolgies for my relative ignorance in these matters"

 

[Velok the Younger]

[member="Lucien Cordel"]

"Lord Cordel, welcome. Thank you for your questions."

A holodisplay flickered to life.

"In Chart A, you see the anticipated layoffs in relation to the range of tax revenues associated with those demographics, which often benefit from certain tax loopholes of which we're all aware. Chart B uses a similar construction to show you the anticipated tax revenue from our planned hires within the year. Chart C shows the anticipated corporate revenue increase over that period, and Chart D shows the Confederation's expected profits from that revenue stream. As you can see, Chart D and Chart B together outweigh Chart A by more than an order of magnitude."

 

[Velok the Younger]

With Sivas and Cordel satisfied, that left only [member="Lucianus Adair"] to give his voice, and Adair wasn't prone to giving his voice unless there was something sardonic to be said.

Presumably, if there had been any meat for sardonic criticism in her proposal, she'd have heard it by now.

 

[Lucianus Adair]

It was true that he was a man of few words. It was also true that what words he did impart dripped and looked down the nose as of late, but when the people around him were given over to 'simpleton syndrome' among other deficiencies, it simply could not be helped. This was not one of those cases, for what he sent back after reviewing the proposal and the ensuing questions, answers, rebuttal, and counterproposal, he had only some words, transmitted via electronic missive:

I wholly support this proposal, with no reservations.

-L. Adair

That done, he went back to skimming and perusing the written intergalactic news.

 

[Arage Bao]

Somewhere on a remote off-world location Jared Ovmar had a bright and shiny grin plastered on his lips.

Business was good.

[member="Anders Sivas"] [member="Lucianus Adair"] [member="Rave Merrill"]

 

[Yasha Cadera]

Lucien, Lucianus and I accepted and it's not the only thing putting a warm and comfortable feeling in my belly. Somewhere I feel a smile, a bright and warm grin and as I settle into my office chair, I can't help but laugh sweetly. Laugh for the good times, laugh for Iron Crown Productions healing from its sick state of affairs, laugh at the new alchemized potential of our military and laugh for a man I haven't seen since the death of our son.

I send a message, from the Office of High Councillor Anders Sivas, Military Affairs

"Congratulations, [member="Rave Merrill"] & [member="Jared Ovmar"] on your acquisition. Attached is the information needed to fulfill my 5% stock accumulation, I look forward to seeing what new things you come up with.

Give my tenderest regards to your business partner. It is our hope he enjoys that smile.

Anders Sivas"

Bucket puts its android hand on the table and brings me a cup and saucer of tea and a biscuit. "Gilbert could have done that, Bucks."

"Yeah, Gilbert's too busy chatting up the flimsy copier. Sold ICP, eh? Hmm!"

"Hmm what? It'll help armour us. I'm hoping to bring up better defensive equipment for our troops. If we can keep them from having to worry about staying alive, they'll be faster and more effective in the field. I got blast-all from the old regime at ICP."

"Naw, the hmm was at your percentage. Didn't think you needed it."

"Didn't. . . I've got to make money somehow, Bucket. The Suma doesn't pay for itself and High Councillors don't make that much. How am I going to take care of you all if I don't have income, eh? We don't even have a place to live outside the ship."

"Honey buns, I've been meaning to talk to you about that. . . "

What is this cockamamie artificially sentient droid saying to me now? "Bucket? Does this have to do with Akure Executive Leatherworks buying out ICP?"

"Ah. . . no but kinda?"

"Zip it. Tell me later. And get me General G'wit."