OWNER OF HYUNDAI

Chung Ju Yung (1915-2001) founded Korea's Hyundai Group, which remained his country's most powerful chaebol, or family-run conglomerate, for years. Chung's assemblage of corporate entities, which he was said to run by relying heavily upon his famous iron will, included the automaker Hyundai as well as large construction, shipbuilding, and electronics concerns. In his later years, Chung entertained political ambitions and ran for president of South Korea.

Stole Family Cow

Chung Ju Yung was born on November 25, 1915, in Tongchon, located in the northern section of Korea, then annexed to Japan. At the time of Chung's birth, Korea had been under harsh Japanese colonial rule for five years; the northern regions would eventually fall under communist domination as North Korea in 1948. Chung was the oldest in a family of eight that eked out a living on the land, and he was forced to abandon his education after grade school in order to work to help support his family. He attempted to run away on two occasions, and after stints on a railway construction site and as a dock worker, he secretly sold the family cow and fled from home with the money. After walking to Seoul, one of Korea's larger cities, Chung found a job working at a rice shop as a bicycle delivery person. He eventually bought the business, on credit, but harsh Japanese military rule made owning businesses difficult for Koreans. A small truck and repair garage he established in 1940 languished under the same harsh economic restrictions.

By the end of World War II and the ouster of the Japanese, Chung had begun a family with his wife, Byun Joong Suk, whom he had married at the age of 15 in 1930. Several of his brothers had by now also followed him from Tongchon to Seoul. At the war's close Japan had been vanquished by Allied forces, and Korea prepared for political and economic independence. With a major reconstruction effort underway, Chung moved from automobile-servicing to the construction industry and won several lucrative early contracts from the U.S.-run military government in the southern half of the country. His company's growth was again affected by the outbreak of war as northern and southern Korea battled alongside their respective controlling superpowers between 1950 and 1953. Following the war Chung's Hyundai Engineering and Construction thrived.

Company Expanded Alongside Country

Like those of other large chaebols, the fortunes of Chung's Hyundai group were boosted due to ties with South Korea's political elite. A military junta came to power in 1961 under Park Chung Hee, and the following year Chung's company won the Ssoyangang Dam project; it also built the Kyongbu (Seoul-Pusan) Expressway, South Korea's first major highway, which was completed in 1970. Park was determined to industrialize South Korea in order to free it from dependence on foreign aid, and Chung's business interests continued to expand along with this government policy. In the late 1960s he built an automobile manufacturing plant in Ulsan, on the country's southeastern coast. Initially it built two Ford Motor Company models for the South Korean domestic market, but in 1974 unveiled the first true Hyundai, the Pony. Chung's younger brother, Chung Se Yung, was put in charge of the auto group.

Chung kept expanding his Hyundai chaebol to include 86 companies at its largest. He was known to be a strong-willed business foe, constantly striving to stay ahead of other top Korean chaebols like Samsung and Daewoo. In 1971 Chung met with bankers from London's esteemed Barclays house in the hopes of gaining financing to begin a shipbuilding firm. To quell the bank's doubts, he showed them a 500-won bank note with an illustration of the world's first ironclad ship, built in Korea in 1592. As with all of Chung's other ventures, Hyundai Heavy Industries thrived and within 30 years had become the largest builder of merchant ships in the world. In the early 1980s, worried about the dominance of Samsung in the electronics market, Chung launched Hyundai Electronics, which soon flourished as a maker of semiconductor chips for computers. The tycoon's formidable business skills landed him a post as head of South Korea's Olympic Bidding Committee, and he was instrumental in drafting South Korea's winning proposal to host the 1988 Summer Games. The international sporting event was a turning point in the small, overcrowded nation's image.

A Demanding Boss and Parent

Daily breakfast meetings with his sons, who became top executives, took place at 5:30 a.m., but Chung was oftentimes awake hours before. The Hyundai chief "managed his sprawling industrial empire with an iron hand that befitted a Confucian patriarch," explained Financial Times writer John Burton. "He was said to hurl ashtrays and to slap managers who displeased him." Both Hyundai's automobile manufacturing and shipbuilding concerns were based in Ulsan, and it eventually became known informally as "Hyundai City." In time, South Korea itself would even be dubbed the "Republic of Hyundai" by critics observing the dominance of Chung's brand in all sectors of the Korean economy. The Hyundai name seemed to be everywhere in South Korea. It built trains, bridges, ships, and a plethora of consumer goods besides cars. Chung's close ties with the ruling governments, which were military in character until 1992, helped him battle labor-union movements, especially one at the Ulsan shipyard in the 1980s that dragged on for five years. At the time, South Koreans worked six-day weeks, with little vacation time, and earned some of the lowest wages in the industrialized world. Government riot police finally stepped in to quell the unrest at Ulsan in 1987, but a pro-democracy movement had taken hold countrywide, and the military juntas under Park and his successors were now considered illegitimate holders of power.

Despite his success in South Korea, Chung was interested in expanding his company beyond his country's borders. In the 1970s Hyundai Engineering and Construction bid for and won lucrative contracts for projects in the Middle East, including the construction of a vast oil terminal port facility. In 1985 Hyundai Motors produced its first cars for the American market and within a few years had made South Korea one of just a handful of export nations to hold a share of the U.S. automobile market. Yet Chung was eyeing a market closer to home: the heavily armed, isolated, and repressive socialist state of North Korea, where he still had family. Since the end of the Korean War in 1953, relations between the two Koreas were frosty at best; North Korea spent heavily on defense, and at one time boasted the fifth largest armed forces in the world; South Korea, meanwhile, was home to several thousand U.S. troops stationed at bases and alongside South Korean forces at the tense demilitarized zone (DMZ) that divided the two nations. North Korea maintained that South Koreans harbored a secret desire to be "liberated," while keeping its own citizens in a constant state of high alert by warning them that the U.S. and South Korea were planning to invade.

Returned Home with Cow

In 1989 Chung made a highly publicized visit to North Korea and announced that he would fund a tourism project in the Keumkang Mountains of his home province. He hoped to create a special coastal tourism zone in the east, near the DMZ, as a place where long-separated family members could reunite briefly. The plan fell through, however, and at times Chung, now in his 70s, began to voice criticism over his government's policies toward North Korea. In 1992 he announced he would be giving up several company posts in order to run for president. He launched his United People's Party (UUP) in February of 1992, but was bested by Kim Young Sam, President Roh Tae Woo's chosen successor. Chung won just 16 percent of the vote, but the UPP took 30 seats in the National Assembly. Kim became the first civilian president of the nation since the Korean War, and along with the new mood of democracy - and an impressive hike in the South Korean standard of living - came calls to dismantle the power of the chaebols.

Chung's political ambitions brought trouble for Hyundai. He was investigated and found guilty of diverting some $81 million in company funds to finance his campaign; his three-year sentence was suspended due to age, but several Hyundai officials were jailed and the state rescinded its policy of making favorable loans to the company. The government also began auditing Hyundai and Chung-family tax returns. Chung was still an ardent supporter of reconciliatory policies with the North and in 1998, following reports of widespread starvation in North Korea, he became the first civilian to cross the DMZ since the end of the Korean War. Prior to this moment, all travel between the two countries had to go through a third country, usually the Soviet Union or China. Chung, now 75 years old, walked the last part of the trip on foot. He brought with him 500 head of cattle from his own nearby farm as a gift to Tongchon, remarking that it was a gesture of reparation for taking his father's cow back in 1933. His visit was a major news event in South Korea; "Television networks interrupted their regular broadcasts with live footage of the trucks rumbling through the streets of Seoul on their way north," reported Time International correspondent Stella Kim. "Early Tuesday, the convoy stopped just short of the border, where more than 1 million heavily armed troops face off in a tense armistice… . A Buddhist priest in gray robes walked along the row of trucks, banging on a wooden block and praying that the animals would "survive until reunification.' "

Sons Warred with One Another

Chung met with North Korean leader Kim Jong Il, and within two years a North-South summit had taken place; this time Hyundai agreed to a $942 million investment plan in the north. Yet Chung faced more pressing concerns back in Seoul: a power struggle had erupted between his two oldest sons, with one enlisting the help of a South Korean government determined to break up the powerful chaebols. Chung had fathered nine children in all, but only five were likely born to his wife; the others were registered as part of his family anyway. There were two tragedies: the eldest, Chung Mong Pil, died in a car accident in 1982 and another, Chung Mong Woo, committed suicide in 1990. Mong Pil would have inherited control of the Hyundai empire at some point - the traditional chaebol practice - and the second eldest son, Chung Mong Koo, was thought to be next in line to succeed the father.

As the eldest living son, Chung Mong Koo was made chief of Hyundai Motors in 1998 and Chung gave his third son, Chung Mong Hun, the more lucrative construction and chip businesses. This launched an intense rivalry some say was fueled by the Chung sons' lack of allegiance to their family unit due to long-simmering resentment over legitimacy issues. Soon the infighting at the upper levels of the Hyundai Group reached an unparalleled level of acrimony, as Chung's health grew more frail and family members attempted to acquire control over parts of the business empire via stock deals. In 1999 Hyundai's combined sales stood at $80 billion, making Chung's empire the largest of the five main chaebols in South Korea during the last genuine year of their existence. Chung by then had been ordered to spin off some of the Hyundai businesses by the South Korean government, but the obstinate tycoon refused until debtors forced his hand in May of 2000.

Though he was said to be worth $6.2 billion, Chung lived in a modest home built from leftover construction materials from his company. He walked the three-mile trek to his office in Seoul daily until his health began to falter. He was an ardent fan of the Internet and liked to sing karaoke. He died of pneumonia on March 21, 2001, in Seoul, South Korea. His son Chung Mong Joon served as organizer of South Korea's hosting of the World Cup soccer tournament in 2002. After his death, the elder tycoon continued to generate respect; noted Guardian obituary writer Aidan Foster-Carter, Chung "personified his country's ascent from poverty to global success."

MAYANK SRIVASTAVA
PGDM 1st SEM.
YEAR 2009-11