Friday, March 18, 2011

Hyundai Founder Commemoration

By Don Southerton, Editor
To honor the 10th anniversary of the passing of Hyundai founder Chung Ju-yung, the Hyundai family groups are collectively commemorating the patriarch in a memorial services and  photo exhibit.  The Hyundai founder was not only a highly successful industrialist, but also a nation-builder and forward thinker.

Korea Times notes

Chung Ju-yung, third from right in the front row, shakes hands with an employee at Hyundai Motor’s research center in Hwaseong, Gyeonggi Province, in 1999. Next to him is his son, Hyundai-Kia Automotive Group Chairman Chung Mong-koo.

By Kim Tae-gyu

Under the leadership of late founder Chung Ju-yung, Hyundai Group climbed to become Korea’s No. 1 conglomerate but the empire showed signs of slowly crumbling after his death at 85 on March 21, 2001. 

A long and tumultuous life was marked with both success and tragedy and he lost two sons before his passing. The six sons and one daughter remaining went on to divide the company. 

In early 2000, Chung chose his fifth son Mong-hun as his successor to head the Hyundai Group while entrusting only the automotive sector to second son Mong-koo. The eldest son died in a car accident in 1982.

Strife amongst the siblings, considered “princes,” splintered the group into three separate parts.

Mong-koo took charge of Hyundai Motor while Mong-hun became the sole chairman of Hyundai Group as the official successor of Hyundai Group, which controlled Hyundai Engineering & Construction (E&C) and its North Korean businesses.

Chung’s sixth son Mong-joon took over Hyundai Heavy Industries. 

The division prompted the conglomerate to forfeit the economy of scale as well as its pole position to Samsung Group even to this day.

The misfortunes of Hyundai Group culminated in 2001 — just before the death of founder Chung, the group lost its managerial right on debt-stricken Hyundai E&C to creditors through a debt-equity swap. 

Worse, the group lost its leader later the same year as Mong-hun jumped to his death from his office in Seoul in the midst of a police investigation on slush funds involving North Korean businesses. 

A family of champions, it wasn’t long before the siblings of the tycoon soon got back on track.

Together with Kia Motors, which Hyundai acquired in 1998 in the aftermath of the Asian currency crisis, Mong-koo catapulted Hyundai Motor to become a leading global automaker. 

In 2001, the two outfits combined to churn out 2.46 million cars for a turnover of 34.8 trillion won. During the past decade, their sales have more than doubled to 5.74 million last year for 60 trillion won in 2010.

Hyundai-Kia Automotive Group is now the world’s fifth-largest carmaker and aims to crank out 6.33 million vehicles this year to break through the significant 6 million mark. 

The Seoul-based outfit also successfully signed an agreement with creditors to take over Hyundai E&C in a fierce competition against Hyundai Group, currently headed by his sister-in-law Hyun Jung-eun, the widow of the late Mong-hun. 

It appears Hyundai Automotive will emerge as the ultimate successor of founder Chung as far as the conglomerate is concerned — automobile and construction were the two start-up industries. 

With 40-plus subsidiaries and more than 100 trillion won annually, Hyundai-Kia Automotive Group now ranks the nation’s second-largest chaebol, closely trailing Samsung Group. 

Hyundai Heavy Industries (HHI) has also grown into the world’s primary shipbuilder with sales reaching 22.4 trillion won last year for an operating profit of 3.4 trillion won. 

With 28.9 trillion won in total assets HHI aims to jack up sales by 20 percent this year to 26.9 trillion won. 

In comparison, Hyundai Group has struggled greatly since 2001. The termination or contraction of many North Korean businesses further weighed down on the group in recent years.

Led by widow Hyun, however, Hyundai Group maintains solid performances thanks to flagship affiliates as Hyundai Merchant Marine, Hyundai Elevator and Hyundai Asan.


  1. North Korea Sends Condolences
    JoongAhn Ilbo notes...

    Hyundai Group said yesterday that North Korean leader Kim Jong-il sent a personal condolence message to commemorate the 10th anniversary of Hyundai conglomerate founder Chung Ju-yung’s death.

    Ri Jong-hyok, vice chairman of the Korea Asia-Pacific Peace Committee, met with senior officials from Hyundai Asan on Friday at the company’s Mount Kumgang office and conveyed the message from Kim.

    In addition, the chairman of the Korea Asia-Pacific Peace Committee, Kim Yang-gon, visited the Hyundai Asan offices in Kaesong on Saturday and delivered a wreath.

    Some analysts believe the moves are part of recent efforts by Pyongyang to improve ties with Seoul, which could include the revival of the Mount Kumgang tourism business, which was blocked by the President Lee Myung-bak.

    Ri said that message from Kim Jong-il, which was addressed to Hyun Jeong-eun, Hyundai Group chairwoman, and other family members, said, “Chung was a pioneer for the reconciliation and cooperation of the two Koreas and has worked tremendously hard for the unification of the Koreas. We pray for his soul and wish the best for the businesses that the entire Hyundai family is involved in.”

    Due to procedural problems, only the red ribbons from Kim Jong-il’s wreath, which read “In memory of Chung Ju-yung,” will be displayed during a memorial service today at Chung’s burial site in Changu-ri, Gyeonggi.

    Chung first visited North Korea in 1989 and met with Kim Il Sung, the founder of North Korea, to discuss joint business projects. Chung originally came from a village in what is now North Korea.

    In 1998, Chung personally delivered 1,000 heads of cattle to North Korea and received permission to establish tourism to Mount Kumgang, including building a hotel and resort complex there.

    However, Mount Kumgang tours were suspended in 2008 by the South Korean government after a female tourist was shot to death there by a North Korean border guard.

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