Asia

"Hazy had spent some time working at Hughes Airwest and then consulted to the industry. Through resulting contacts, in 1973, Hazy discovered a DC-8 aircraft on sale for $2.2 million from National Airlines of Miami. Gonda heard of a Mexican airline hunting for a plane to use on a new route from Los Angeles to Acapulco. Putting the two concepts together, Hazy and the Gondas acquired the DC-8 and leased it to the airline. The economics worked, producing positive cash flow that enabled the trio to repeat the transaction profitably. They bought a series of turbo-prop planes from Hughes on the cheap—$250,000 each—and leased them to capital-short airlines in Africa. In the early years, the trio scouted for planes they could acquire at a low price and bought only when a leasing deal was in place. That required persuading airlines about the appeal of the aircraft operating lease. Airlines had conventionally bought their own planes or swapped them with each other under temporary leases to handle seasonal travel fluctuations. The significant capital required to buy planes had to be internally generated or borrowed. The idea of airlines leasing from independent third-party owners was new. Most of the trio’s early customers were airlines based in Africa, Asia, and Latin America, starved for capital and attracted to leasing."

"The Newton group had been shunned by the rest of the company, like it was a spin-off. But this curse was partly a blessing. Asking to have the Mac assembled in Asia would be fraught with politics, but nobody really cared where the Newton was built. Baker had freedom. The United States, he says, was bureaucratic and already falling well behind Asia in cost and quality. “If you decided you wanted to contract companies in Asia or in the US, you would hear back from the Asian companies within a day or two,” he says. “Then you’d hear back from the US companies two weeks later.”"

"Jerrold faced serious issues—chief among them was inflated numbers tied to a corrupt purchasing department taking kickbacks. Productivity at the main factory was also poor. We overhauled purchasing, shut down the Philadelphia plant, and moved operations to more efficient locations in Nogales, Mexico; Springfield, Massachusetts for high-end parts; and Asia for low-cost components. By committing to large-volume buys, we cut costs dramatically."

"In Golar, one could fine-tune operations and be creative with financing, but the main figures were set when tied up in contracts over two decades. It's almost like a banking business. Neither Fredriksen nor Trøim are suited for that. Something needs to happen all the time, and Golar is after all in a market that is expected to grow significantly for a long time. World gas production is increasing strongly, we know this not least in Norway, and with high oil prices, gas is very competitive. Everyone expects the USA to cover a larger part of its energy needs with natural gas, Japan will replace nuclear power with natural gas, and in Asia generally, the energy need seems insatiable. Someone has to transport all the gas from the production fields to the market. The conclusion was clear for Fredriksen: ordering more ships."

"Stokes suspected intuitively what Knox knew from experience: the best way to do business in Asia was to use local customs. ‘We were very conscious in Asia of always collecting the money [for the goods distributed],’ says Stokes. The only safe system was the Asian one of having people physically collect owed money on time, like a landlord knocking on doors for rent. The Singaporeans ignored their own hard-won wisdom and tried to introduce the latest Western methods, employing a Harvard graduate who put in an American payment system. It didn’t work. It was a lesson that when in Asia, do as the locals do, something Stokes would remember in China much later."

"No. My return to adventure capitalism needed to bear the hallmarks and characteristics of my past ventures: a business opportunity in a sector like telecoms that I knew something about, but in a territory that constituted a great unknown and fed my curiosity for the new. Asia was enticing but too far away for me to make any meaningful inroads. Africa is going to be a major opportunity but, with all the ventures I looked at there, I decided it was too soon; the necessary infrastructure was simply not there yet. Then I travelled to Latin America and decided that this was a place where I could do business."