Chairman Chung Mong-koo, who was officially removed from management when he was named honorary chairman on the 14th, has turned Hyundai Motor Group, a joint-stock company on the outskirts of Asia, into a central company in the global automotive industry. It’s easy to believe that Chung is a second-generation manager who inherited the automobile subsidiary from the late Honorary Chairman of the Hyundai Group, Chung Ju-young, who was an outstanding founder. He has been excellent at creating new businesses from an early age and elevating existing businesses to various levels of quality.
Chung Mong-koo, Honorary Chairman of Hyundai Motor Group, officially resigned from the front line of management when he was appointed Honorary Chairman on the 14th. / Hyundai Motor
President Emeritus Chung Mong-koo was born in 1938 and is the second son of founder Chung Ju-young. After graduating from Gyeongbok High School in Seoul and the Department of Industrial Management at Hanyang University, he joined Hyundai E&C as a pyeong employee in 1970. At the time, he was not attracted to his eldest son, the late Chung Mong-pil, president of Incheon Steel, and the late Chung Se-young, the late founder’s younger brother, Chung Se-young, honorary president of Hyundai Industrial Development. At Hyundai Group, he was sent to subsidiaries under the ‘Second Army’ and took on the role of creating new businesses. Honorary President Chung Mong-koo was recognized for his skills while leading Hyundai Motor Service, which was founded in 1974, and took over Hyundai Precision Industries (now Hyundai Mobis), which was established in 1977.
At the time, Hyundai Precision was a container manufacturer. With the expansion of container shipping and more cases of domestic exports using containers, Hyundai Group entered the related business, which was carried out by the honorary chairman Chung Mong-koo. Hyundai Precision Industries, which started in Wonhyoro, Seoul, where sunlight is not good, has grown into a company with a 40% share of the global container market in a short period of time. It is the success of the container business that Honorary Chairman Chung Mong-koo is seriously recognized for for his management skills both within and outside the Hyundai Group.
Chung Mong-koo, then president of Hyundai Precision Engineering (far left), looks at the 1991 Galloper prototype vehicle. / Hyundai Motor
Since then, Hyundai Precision will become a company in the field of transportation equipment parts, such as auto parts, railway vehicles, machine tools and aviation. In 1989, when he entered the SUV (sport utility vehicle) business, Honorary President Chung Mong-koo also began a relationship with automobiles. Although he received technology and blueprints from Mitsubishi, Japan, he expanded his understanding of the automobile industry by unpacking and assembling cars one by one during the SUV development process. Launched in 1991, Galloper took over the SUV market immediately by shaking up the SUV market where Ssangyong Motors and Asia Motors (now Kia Motors) were.
Hyundai Motor Company, which used to be ridiculed for its poor quality in the United States, was revamped to its present appearance when Honorary Chairman Chung Mong-koo took over the leadership in earnest in 1999. JD Power, an American quality survey company, selected Hyundai Motors last in the 1998 and 1999 new car quality surveys. At the time, local dealers urged Honorary President Chung, who visited the United States, saying, “The car is not good enough to sell. “. President Chung, who returned to Korea after hearing dire criticism at the time, halted the production line and indefinitely delayed the launch schedule for the new car. Additionally, a company-wide quality meeting chaired by Honorary Chairman Chung was held. Until that time, Hyundai Motor Company had set increasing production numbers as its top priority, but Honorary Chairman Chung abandoned this goal and made quality improvement an absolute priority.
Honorary President Chung Mong-koo, who visited the Kia Motors plant in Slovakia in 2016, is analyzing the vehicles produced. / Kia Motors
In 2004, Hyundai Motor Company managed to sulk the Sonata in first place in the midsize sedan category in JD Power’s Initial Quality Survey (IQS). By extending the product’s warranty period to a ’10-year, 100,000-mile warranty ‘, Hyundai Motor Company quality was impressed with American consumers. At the time, the ‘two-year 24,000 mile’ warranty was common, but due to Hyundai’s success, competitors also extended the warranty period and mileage.
Hyundai Motor Company has established a standard factory building system that can build high-quality and uniform production plants around the world in a timely manner. He also built the world’s largest R&D center to expand the company’s inherent competitiveness. Global supplier growth was also promoted through supply chain innovation. It has built a virtuous cycle ecosystem for the Korean auto industry by expanding the competitiveness of auto parts manufacturers.
The main story of the management of Hyundai Motor Group by Honorary Chairman Chung Mong-koo. / Graphics = Kim Ranhee
Honorary President Chung’s on-site management played an important role in the process. Honorary President Chung visited the factory and checked the quality in detail. In August 2002, during a test run of a Kia Opirus export vehicle, he noticed a tiny noise and ordered the shipment to be stopped and replaced with a quiet engine. In that case, there was a view that the cost would increase dramatically and the shipment would be delayed by about 40 days, causing losses, but Honorary Chairman Chung said, “It doesn’t matter if it’s quality.” When President Roh Moo-hyun visited Beijing in 2003, SARS (acute respiratory syndrome) was breaking out and everyone was dying. However, Honorary President Chung took the whole of a week before President Roh’s visit to China to rehearse directly at the Beijing factory. Senior Beijing officials also met and coordinated.
Hyundai Motor’s global management is also a good example of Honorary Chairman Chung’s driving force. In July 2001, Honorary President Chung decided on local production in the United States. Hyundai Motor Company built a factory in Brumont, Canada in 1989, but suffered massive losses and withdrew. Although the business prospects are unclear, the plan to build a factory in the United States was made a reckless gamble. However, President Chung did not bend his will and said: “It is impossible to reach the world top 5 without the US market.”
When President Roh Moo-hyun (far left) visited China in 2003, Honorary President Chung Mong-koo (second from left in the front row) first arrived at the Beijing factory a week ago to prepare for the event. . / Hyundai Motor
In the business world, Honorary President Chung is regarded as “a bearish appearance, a snake head, and a fox activist.” He said that his intellect and finesse, which made the ‘calculated adventure’ possible, were important factors in the momentum that was not limited by short-term interests could be successful with high probability. Hyundai Motor Company, Kia Motors, Hyundai Precision and Hyundai Motor Service merged, and Hyundai Motor Group, along with Hyundai Steel and Hyundai E&C, has been converging without internal disruption, thanks to the leadership of Honorary Chairman Chung.
Meanwhile, this leadership continued to try to enter the integrated steel mill business in the 1990s, resulting in a conflict with the government. Hyundai Motor Group acquired the former Dangjin presentation office from Hanbo Cheoldang in 2004 and entered the integrated steel mill business. It also gave rise to a high-ranking executive staff pattern that was unpredictable. The appearance of frequent executive greetings and re-employment from those who have ever retired at any time increased their grip, but it is an assessment that has caught up in the formation of a systematic management organization culture that can be called ‘Hyundai Motor System. ‘.
Hyundai Motor Group Honorary Chairman Chung Mong-koo and Chairman Eui-Sun Eui (left to right) are walking. / yunhap news
As of September 2000, Hyundai Motor Company and 10 subsidiaries, including Hyundai Motor Group, had assets of only 34 trillion won, and by the end of 2019, Hyundai Motor Group has transformed into a group with 54 subsidiaries and a total of 23, 37 trillion won in assets. Key companies, Hyundai Motors and Kia Motors, have established themselves as the top five global automakers in the global automotive industry, with complete vehicle production facilities in 10 countries and annual sales of more than 7 million units.
The reason Hyundai Motor Group has been constantly taking on new challenges and developing is the result of the strong reflection of the business side of Honorary Chairman Chung. However, this is also a task of overcoming for President Eui-sun Eui-sun, who became the next president of Hyundai Motor Group. This is because stepping out of the shadow of a true entrepreneur is a daunting task for future managers. At the same time, President Eui-Sun Eui must transform the organization into a future mobility company.
