“If you had WMT, what would you do with it?” Oskar Lindland’s butler had just brought a bottle of champagne, poured two flutes, tucked the bottle into the cooling stand, bowed, smiled, and left. Oscar tucked his legs under himself and reached for a glass. His legs were short, his arm were short, but his fingers were long and slender and his eyes sparkled. “Really, Mikala, if you were in charge?”
“Now we’re both millionaires, I suppose we can have champagne every day.” Mikala Banh was a foot taller than Oskar with sharp handsome features. He took a small sip and set the glass on the table beside him. “First of all, I intend to accomplish exactly that, as I suspect you know. Or, as I know you suspected. Are you running against me?”
“No, absolutely not,” Oskar said. “I’ve got a contract to assist through my merger, for eighteen months, just as you do. Then I’m gone —grab my money and run. There’s a dozen ideas I want to develop, not one helped by the encumbrance of a ten billion dollar ball and chain. I can be completely self-funding now, which means I won’t have to be. Liberty, my brother, ceiling unlimited.”
“I’m not seeing WMT as an encumbrance. For me it’s a force-multiplier. I’ve enjoyed being a one-man show and it’s been good to me. But when you paddle away on your single-seat lifeboat, I want to be standing at the bridge of the ship.”
“I get you, I do; but it’s the last thing I want. I work and play best alone.” Oskar said. “Have you considered what you’re up against? This has been a family company for a hundred ten years, give or take. Fifty under the redoubtable Gustav, then sixty of no-less-redoubtable Galliana, who also, effectively, owns the show. When she dies, which can’t be much longer, her shares will not come to you. You’ll never have control the way she does: executive authority plus private ownership. You’d continue at the pleasure of the board, day by day, if you did pull off the miracle of getting the job.”
“You know the basic ownership structure,” Mikala said. “You and I just got a mess of preferred shares as a positive alternative to non-compete clauses. Our fortunes are forever tied to the fortunes of WMT. But actual ownership, actual control, is entirely held by the Wallner family.” He finished his flute and refilled it, topped off Oscar’s. “But do you know the whole reverse tontine deal from 1957, from Gally’s ascension?”
“I thought it was a now-I-have-to-kill-you family-only secret.”
“Supposed to be,” Mikala said, “but I’ve put it together from: here a piece, there a piece. And, you know, analytics. Until Gustav set up the new deal, he owned all the shares, 100%. A few lenders held preferred shares, but Gus had all the common stock. On his death, he decreed each of his four kids would get 20%, with another 20% reserved for the CEO.”
“So Gally has 40% plus 20% from her ever-compliant sister, total control as long as they agree, and they always do; and the two brothers just 20% each, at least Vernon does. I assume Beale’s widow has his share?”
“Except for the other provision.” Mikala was enjoying the unveiling.
“What? Your shares go back into the pool when you die? That would be a tontine, right, last one standing gets it all?”
“I said reverse for a reason. Control doesn’t concentrate, it dissipates. Each child that’s born to one of his children gets 5% of the parent’s share.”
“So Gally, with three kids,” Oskar said, “has lost fifteen of her twenty. She’s down to 5%?”
“Five plus her CEO twenty, plus Lisette’s twenty. So she’s at 45%. Her three children plus three nieces and nephews, six in all, are five percenters. That’s 75%. The remaining 25% is with the brothers: 15% with Beale’s widow, 10% with Vernon.”
“So Gally can be outvoted if everybody gangs up?”
“Her three children have 15%, so two of them would have to join the gang to make 50%. But the CEO’s the tie-breaker. So she’s pretty much impregnable. Unless she was obviously demented and they all wanted her out, something like that.”
“Then the kid’s kids, do they get 1%?” Oskar asked.
“Nope. Stops with Gustav’s grandkids. That’s one reason they’re all on the boat. It’s been fifty years—time to revamp the structure, as provided in the original deal. They can do anything they want by majority vote. Up till now, they needed two-thirds to change anything.”
“According to the original contract, could the CEO shares go out of the family? Like to you?”
“See, pretty fascinating, right? I don’t know.“ Mikala twirled his champagne flute between his fingers. “I don’t have that piece. Maybe it was never considered. But I’d say yes. If Gally had been voted out, say ten years ago, in favor of one of her brothers, it’s clear the brother would have gotten the shares. Goes with the position.”
“Or to a kid of the brothers? Aren’t they the main contenders, besides you? They’d have their own 5%, plus the 20%, plus the parent’s and/or other sibling’s combined 15%, for 40%. If the parents and other kids stuck together. Meanwhile Lisette quietly still has 20% and no heirs. If they could get her agreement, they’ve got 60%. Meanwhile, even if you got Lisette on board you’d still be down at 40%.”
“But add two kids, or one brother, and I’m at 50%. It’s doable.”
“Well, good luck, I suppose. Unless I’m encouraging the one man who could sink a hundred-year-old enterprise with his fatally flawed vision. That would kill my shares, too.”
“I’m a succeeder, my friend, all my life.” Mikala tossed back the last of his champagne and set his flute on the end table.
“So, what would you do?”
“The 21st century, that’s what I’d open up. It’s what I know, obviously, but the machinists of the day after tomorrow aren’t people, they’re robots. It’s already happening. That’s not at issue. We need to make brilliant robots who can run any machine put in front of them, or brilliant machines that operate themselves.”
“WMT folks will tell you, I’ll tell you, ‘yes, but.’ For small applications, simple tasks, short runs, where you don’t want a ten million dollar tool to have consumed all your capital, maybe a lathe is good, a planer, a boring machine.”
“You know the ports on cars, where mechanics plug the diagnostic link? Put one of those on every lathe. A human can still run it, but so can a robot, 24/7, without paying three shifts or overtime. One year, you use the guys in the aprons, the mechanics. Another year, the mechanicals, if your situation warrants. Point is, build no more tools without AI capability.”
“What happens to this model,” Oskar asked, “when my printers replace all the standard tooling processes?”
“Well, you won’t be competing with me, right? So we’ll be making your printers specifically to handle materials other company’s printers can’t. That’s what Gally wanted you for, machine-tool-capable printers. We can go printer to planer or traditional tools to planer, as tolerances demand. We’ll be in front with both because we can print the hardest steels, the toughest composites and because we retain the capacity for purely mechanical build outs.”
“Don’t under value that retro market, Mikala. There will be backwaters around the world, or within developed countries, or again with the small/simple/short jobs. Some customers will be snowed by the grand vision—keep the mechanics and mechanicals bit, that’s good—and some will simply cost it out. The 100k tool versus the 5m tool, the operator salaries versus technician gods, adapting basic machines to different tasks versus .”
“We won’t kill the retro machines, of course not, not immediately. But I’m talking brilliant, remember. Touchscreen controls any fabricator or plant manager can operate, with no further human brilliant input required.”
“You’re not wrong, Mikala. But my advice to you would be, speaking as the WMT shareholder most important to me, don’t get over your skis.”
“It’s not just Europe, Oskar. The revolution is global, and it’s already happening. Japan’s the current leader with a lot of this stuff; China is itching to leapfrog; Russia is dying for a chance at the front of the pack; Israel’s ready; the Arabs are watching, Africa will be behind for another century if they don’t grab the ring, but they can truly take off if they do. Oh, did I mention Europe. And the US.”
“So, today a billion dollar operation. Ten years, ten trillion?”
“The future got here fifteen years ago. We’re just beginning to wake up to it.”
“Man, you’re good. You’ll need some kind of shtick, like the black turtleneck or the gray t-shirt. Five years to the IPO?”
“I’m going to make you so stinking rich, old buddy.”
“Watch your tips, Mikala. And don’t oversell. Too manic a push will call up every retrograde instinct in the very people you have to persuade. WMT is staid, they’ve got to a hundred-ten by a dogged pursuit of mechanical perfection, not by revolutionary leaps.”
“Come with me, Oskar? I need somebody who gets both the inevitable future part and the grounded present reality part.”
“Thanks; seriously, thanks. But, no. I’m finished with industrial fabrication. I’m looking at bioengineering, medical devices, cultured or printed organs, enhanced human performance, extended life, GMO gene printing. My head’s popping, same as yours, but different stuff. I can’t wait to escape the clutches of WMT and get started.”
Mikala refilled their glasses. “Toast, then. To us, to the future, to WMT with me in charge and you set free.”
“Salud, my friend. L’chaim!”