Sat, Aug 25, 2001 - Page 9 News List

Steering an empire through troubled times

The owner of the Union Group and `The Liberty Times,' Lin Rong-san, says that cuts in taxes on business would make Taiwan a more attractive proposition for investors. Conversely, he thinks that investment by China in Taiwan will be ultimately negative

By Andy Liang and Vicky Tien 梁永煌,田習如

It is hardly unusual to see news reporters working overtime. But one rarely sees the owner of a newspaper staying until the early hours of the morning. The owner of The Liberty Times (自由時報) and The Taipei Times (台北時報), Lin Rong-san (林榮三) is one of the rare exceptions. At a time when The Independence Evening Post (自立晚報) and The Taiwan Daily (台灣日報) are experiencing financial crises, when there are frequent reports of lay-offs and pay cuts at the China Times (中國時報) and United Daily News (聯合報), The Liberty Times stands out as a beacon of stability.

At the Lunar New Year, The Liberty Times gave out bonuses of four months' salary to employees. For the Dragon Boat Festival, it distributed bonuses of a quarter of a month's salary. Such generosity inspires curiosity about the financial prowess of Lin's Union Group (聯邦集團), and says much about Lin's management style.

During this interview with Andy Liang and Vicky Tien, Lin said that the keys to his management style are conservatism and stability. With most of his businesses targeting Taiwanese markets, Lin is voluble in his warnings about the downside to the industrial exodus to China at a time when Taiwan faces financial crisis.

The following is a summary of the interview with Lin as it relates to his management of the Union Group, The Liberty Times, and the Taiwan economy.

Question: Many say there are the similarities between Taiwan's current financial crisis and the oil crisis of 30 years ago. You experienced both. What is your view?

Lin Rong-san: The nature of these two crises are different. The oil crisis occurred simply because of problems with oil [supplies] and the time was short. The economy rebounded in a year or so. But the current financial crisis is global. The problem is complicated by a sophisticated mixture of factors within Taiwan. Plus, 30 years ago, capital in Taiwan was not allowed to leave the island. Now, huge amounts of capital are flowing to China, making the extent of the crisis far deeper than the oil crisis.

Question: What do you think are the major causes of Taiwan's current financial crisis?

Lin: There are many factors. Some have international roots and others domestic origins. The former are beyond our control. We have no excuse for the latter, however. Industry-wise, the disorderly conduct of some workers, in the name of environmental protection, has worsened the business environment.

Next, members of the Taiwan media overly glorify China. China's problems cannot be seen through the media. In contrast, most coverage about Taiwan is negative. Taiwan's industries therefore hold illusions about China, which causes a massive emigration to China. The emigration in turn causes serious capital outflows and aggravates the crisis. Of course, perhaps the media's negative coverage is intended to compel action by the government. But the opposite is often achieved. If the media continues to blacken our own country and society, Taiwan can only become worthless. Such conduct not only endangers the country and society at large, but also indirectly harms ourselves.

Question: In this economic recession, the real estate sector is suffering extreme pressure. You are also in the real estate business. What is your view about the sector's future?

Lin: [In this business ...], if a firm had NT$10 billion in capital and another NT$10 billion secured from loans five years ago, it would be unable to stay in business now. If it had NT$10 billion in capital and NT$2 billion secured from loans, and it was now able to convert the capital into cash, then it would be able to survive now. In addition, those who have a proportion of real estate holdings leased out, and therefore have steady incomes, may also survive.

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