3. Consulting Type
Morgan owns some well-known companies that masters are very familiar with, such as General Motors, US Steel, General Electric, etc., and also financial institutions including JP Morgan, Morgan Stanley, and UK Huifou. According to the calculation of 1929, at that time, the total industrial output value of the entire United States was 72.9 billion, accounting for 48.5% of the whole world, while Morgan's total asset income was 20 billion US dollars, accounting for more than one quarter.
I. Connection Methods of Industrial-Financial Integration
The effective connection between industrial capital and financial capital can be roughly divided into three types:
Example: Japan's comprehensive trading company. Japanese-style comprehensive trading companies have their unique advantages in doing trade, especially in transshipment trade. For example, Mitsubishi is the largest corn distributor in the world, but Japan does not grow corn. Every year, Japan contracts to purchase corn from other planting countries around the world, and then transports the corn to another region for sale in the form of spot or futures. If it is a futures contract, transportation is unnecessary; only transactions between the two places are needed, and Mitsubishi earns the intermediate profit.
This is achieved through debt financing for industrial-financial integration. Simply put, "financing" lends money to "industry". Although there is a loan review process in between, it is relatively convenient internally, so many enterprises are willing to actively become shareholders of commercial banks. As long as your credit is relatively good, theoretically, if you invest 1 billion yuan in a commercial bank, you can borrow at least 8 billion yuan, or even 12.5 billion yuan (if the capital adequacy ratio is 8%). According to the Basel Accord, if the capital adequacy ratio reaches 12.5%, at least 8 billion yuan can still be borrowed.
That is, finance does not directly provide funds to industry but provides relevant consulting services. Consulting services are very extensive, ranging from individual corporate taxes and financial management to capital operations, etc., which is also a method.
The main characteristics of the success of Japanese-style comprehensive trading companies lie in:
1. The ability of capital operations. In the trading process, acting as an investment bank, if a good company is found, it will be introduced; if a good trading company is found, it will be exclusively represented or bought out; if a good product is found, its patent will be purchased and self-built factories will be set up for production, etc., and after the industry passes its golden period, the equity will be sold again.
Mitsubishi is one of the largest conglomerates in Japan, with 29 core enterprises, 9 of which were Fortune Global 500 companies in 2007. The total revenue of these 9 companies was 292.5 billion yen, and the others that did not make it to the Fortune Global 500 were mostly component stocks of the Nikkei Index. The total assets of the entire Mitsubishi Group ranked sixth globally, reaching 158.577 billion US dollars (in 2007).
That is, industrial-financial integration is achieved through equity connections, including cross-shareholding between projects or one party holding the equity of the other. The difference lies in that credit-based connections may not necessarily be shareholders.
II. Typical Industrial-Financial Integration Models in the US and Japan
1. Credit Type
2. Equity Type
1. American-style transition from industry to finance: Morgan Group
2. Japanese-style industrial-financial integration: Mitsubishi Group