Thoughts on Korean Business by Don Southerton

By Don Southerton On February 20, 1986, Hyundai Motor Company began selling the Excel, their latest production model, in the United States. Building on the success of the original 1975 Pony and then an updated 1982 Pony II, by the mid-80s Hyundai was ready to introduce a new front wheel drive X-1 model. They were also confident enough to tackle the world’s largest car market—the United States. Hyundai X-1 Excel Following a common practice in the automotive industry, the X-1 was badged under a number of names depending on the market. For example, in Korea a sedan version was sold as Hyundai Presto, while in Europe the new X-1 kept the original Pony badge.* For Americans, the X-1 would be known as the Excel--with a reputation for low cost, breaking sales records and, sadly, a tainted quality image.   Beginning in 1976 and prior to launching in North America (with Canada in 1985), Hyundai was exporting the original Pony to a number of markets. Today little recognition is giv...

By Don Southerton Some Background Since the early 1960s, Korean firms have entered into partnership arrangements with international carmakers, including Nissan (Datsun), Toyota, Mazda, Fiat, and Ford. In particular, the Korean government and key industrial groups forged these alliances as the best way to introduce advanced automotive technology to South Korea. In 1967, Hyundai Group also entered the auto sector as a result of  both the founder Chung Ju Yung’s early ties to the car repair business and growing government pressure. Entering into a Ford Overseas Assembler Agreement, Hyundai looked to assemble Ford compact cars imported as knockdowns (CKD). Ford, in turn, would transfer technology and explicit knowledge, such as blueprints, technical specifications, production manuals, and training of Hyundai engineers. Following the Hyundai model for taking immediate action and leveraging their background as a construction company, the Hyundai Ford plant was operat...

Don Southerton 2011 My public image is of a passionate Korea-facing global business consultant, coach, trainer, strategist, social commenter, and author.  I’ve also been an avid student and instructor of traditional Korean martial arts for 40 years. During the 1970s, 1980s, and 1990s, I trained extensively in Moo Duk Kwan Tang Soo Do (now Soo Bahk Do) under the Korean system’s Founder and son, the current Grand Master. A highlights of these years included serving as Chief Instructor/ Coach for the United States Military Academy at West Point. Before shifting my interest to academia, writing, and global consultancy work my martial arts schools were nationally recognized leaders in the industry and among the largest in America While no longer an active instructor, nevertheless over the past 12 years as a practitioner I have added a number of complex Chinese forms to my repertoire of over 35 hyung—the traditional sets of combative movements martial artists’ practice to hone the...

By Don Southerton, BCW Editor It has only been a short time since the March 15 implementation of KORUS FTA and some interesting developments have surfaced. I found this WSJ Asia article more than informative, not only because of the FTA, but I was never aware of all the tariffs and VATs on wine.  Like imported cars, VATs add considerable to consumer costs. Korean consumers now are seeking reforms. Koreans Raise a Glass to Unintended Consequences Since free-trade deals haven't brought down wine prices as much as promised, Seoul is now under pressure to deregulate further. By JOSHUA HALL During debates in the U.S. and Korea over ratification of the free-trade agreement, politicians fought over the macroeconomic effects on employment, trade flows and investment. Now that the deal is coming into effect, implications for individual businesses and consumers are just starting to come into focus. One of the most interesting case studies is the wine industry, which is seeing sign...