I was pleased to see Hyundai Motor America recently highlight a quote attributed to Hyundai Group Founder Chung Ju-yung. It shared the Founder’s “Desire for Better.” Born in November 1915, the Korean entrepreneurial businessman passed away on March 21, 2001.
I’ve also been asked to share more on Chung Ju Yung.
Chung Ju-yung—Hyundai Founder and Honorary Chairman
Growing up in rural Korea during the Japanese Colonial era, the future founder of Hyundai, Chung Ju-yung, exhibited entrepreneurialism early in life. Breaking free from Korean agrarian tradition that the eldest son remain at home to tend the family lands, young Chung’s desire to enter business led to his operating a rice store and then an auto repair business while still a young man. Following the liberation of Korea from Japan in 1945 and unshackled by draconian Colonial rule, Chung Ju-yung re-entered the auto repair business and soon after formed a construction company. He named these businesses Hyundai, which means Modern.
The Early Years
After several years of prosperity and capitalizing on expansion opportunities, Chung Ju-yung was suddenly forced to abandon the Seoul-based auto repair and construction companies in 1950 when North Korea invaded South Korea. Along with thousand of other refugees, Chung Ju-yung and his extended family fled to the last bastion of resistance, the southern coastal city of Busan. There an opportunity to provide housing for the American military surfaced and soon Chung Ju-yung was back in business as a contractor. No construction job was turned away—big or small.
In the years following the end of the Korean War in 1953, Chung Ju-yung and Hyundai established themselves as a reputable construction company. Working mostly for the Americans and the South Korean government, Hyundai struggled with extremely limited resources to restore Korea’s war-battered infrastructure. A key project drawing considerable public attention was the rebuilding of Seoul’s single bridge spanning the Han River. To thwart the advancing North Korean army, the bridge had been destroyed by the South Koreans on the third day of the Korean War. In the spirit of nationalism, Chung Ju-yung repaired the bridge “at cost.” This drew strong local accolades, while establishing the previously little known Hyundai as a major Korean construction company in the eyes of the public and the government.
Hyundai and the “Miracle on the Han”
Fueled by a wide spread perception of post–war government mismanagement and corruption, in 1961 South Korea witnessed a military coup led by General Park Chung-Hee. In the wake of the coup as South Korea struggled to recover from the devastation of the conflict and an ever present and looming threat from North Korea, the new regime saw the need for rapid social and economic development. To spur this rapid economic development the authoritarian South Korean government teamed with a number of the Korean family-run businesses commonly referred to as chaebol (chae= wealth, bol = family). The new regime managed in a quid pro quo relationship, providing the chaebol with subsidies, cheap credit and protection against foreign competition. This arrangement also limited Unions, which kept labor cost low. Korean chaebol that met the authoritarian government’s bold mandates gained additional work. In a climate where failure was not tolerated and success rewarded, Hyundai was among the most successful. Moreover, Chung Ju-yung gained a reputation for iron-will, determination, and a “can-do” spirit where “even the impossible was possible.”
By the 1970s and 1980s, the South Korean economy began to focus on export-driven heavy industry. Chung Ju-yung continued to diversify the company by entering key sectors, including shipbuilding and auto manufacturing. In many cases, Hyundai divisions were the preferred suppliers to others within the Group—ranging from concrete to steel. By the 1980s, Hyundai was South Korea’s largest and most successful conglomerate with projects across Asia and the Middle East. To many Hyundai symbolized South Korea’s rapid economic growth often referred to as the “Miracle on the Han”—the Han River bisecting the greater Seoul area. Interestingly, and rightfully pointed out to me after one of my lectures, most of Hyundai’s operations were centered in Ulsan on the southeast coast of the peninsula.
The extended Chung family, which included Chung Ju Yung, his brothers, in-laws, children, and nephews, oversaw a considerable empire. Over time some of the brothers and brothers-in-law eventually formed their own Groups. These included the Halla Group (cement, construction, auto parts), the Sungwoo Group (cement, auto parts, accessories, batteries, resorts), Korea Flange (flanges, forging, auto parts), Hyundai Industrial Construction and Development (housing construction), Hyundai Oil Refinery, and the KCC Group (auto paint and glass). In turn these affiliated Groups provided products and services as preferred or exclusive suppliers.
These Chung family business ventures actually follow Korean norms with the eldest son (jang ja), in this case Hyundai, assuming responsibility for younger siblings and their families (the affiliated family owned companies). This norm still impacts business as the Hyundai Motor Group continues to support and nurture the smaller companies.
Nation-Builder to Philanthropy
Late in life, with his family members and a loyal team of experienced managers running day-to-day operation of what had grown into a business empire, Chung Ju-yung’s interests shifted from nation building to philanthropic activities.
The above from my book Hyundai Way—Hyundai Speed. ( Link https://www.amazon.com/Hyundai-Way-Donald-G-Southerton/dp/1495968723 )
To close, within the Hyundai Founder’s nation-building / philanthropic work, three efforts stand out…
First, the Seonan Land Reclamation Project--In the 1980s, Chung Ju Yung carried out a massive land reclamation project in Seosan, South Chungcheong Province, to help the farming industry. I see parallels to Henry Ford’s support for agriculture research and development later in his life…
Next, the Asan Hospital / Asan Foundation-- The name of the foundation comes from the village of Asan-ri in Tongchon County, Gangwon Province, which was the hometown of Chung Ju Yung. http://www.asanfoundation.or.kr/af/eng/main.d
And finally, the 1988 Olympics – Despite many in Korea who felt it “impossible,” beginning in 1981, Chung began pursued the IOC to secure the 1988 Summer Olympics over Japan and other contenders. He eventually convinced the IOC that Korea had the resources and the ability to host the international sports event, at times relying on heavily on Hyundai’s extensive overseas network.
Questions, Comments, Thoughts…. Just ask.