Hyundai

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Hyundai

 

The giant Korean companies, or chaebols, which got into financial trouble by over-borrowing during the Asian crisis, faced drastic restructuring -- including the country's largest industrial conglomerate. Hyundai Motors, the one piece of the conglomerate that was still earning plenty of cash, became a separate company on 01 September 2000. DaimlerChrysler, which purchased a 9% stake in the Korean carmaker in September and controls two seats on the company's 10-member board. The refusal by Hyundai Motor to give Hyundai Engineering a helping hand was seen as a setback to the company's efforts to scrape up fresh cash to avoid bankruptcy. Hyundai Engineering was laid low by ill-fated construction projects in Iraq and Saudi Arabia. Hyundai Electronics Industries Co. was one of the world's largest makers of computer memory devices.

Both Kia and Hyundai brands have a clear market future within an integrated and restructured Hyundai Motor Company. Since Hyundai completed the acquisition of Kia, following an international auction for Korea's third-largest automaker in late 1998, a steady process of integration has been underway. At the same time, HMC has continued dismantling its links to the rest of the Hyundai Business Group in order to meet its target of independence by 2000. With the Kia integration well underway, the absorption of Hyundai Motor Service complete and the merger of Hyundai Precision's automaking activities due for completion by the end of July 1999, Chairman Chung outlined his plan for what is set to be the world's ninth largest car-maker.

The family-controlled Hyundai company, which used to be South Korea's largest conglomerate, was divided into three sub-groups after the Asian financial crisis. Chung Mong-hun feuded with his elder brother, Chung Mong-koo, who heads another third of the empire, the automaker Hyundai Motor.

Hyundai-Asan, a South Korean conglomerate in charge of joint ventures with communist North Korea, was accused of being a vehicle for transferring a US$100 million to North Korea from the government of former South Korean President Kim Dae-jung. The money was allegedly used to persuade North Korean leader Kim Jong-Il to attend a historic inter-Korean summit in 2000. Besides the troubled Diamond Mountain resort, Hyundai-Asan is building in North Korea an industrial park, cross-border roads and railways. The delay of the projects, due to political tensions, put severe financial strains on the company. The chief of Hyundai-Asan, Mr. Chung Mong-hun, faced corruption and embezzlement charges. Mr. Chun was put on trial on charges of manipulating company accounting records to hide the secret transfers and embezzling more than US$12 million of company money to pay bribes. The 54-year-old executive committed suicide on 04 August 2003. He jumped from the 12th story of Hyundai's headquarters in the center of the city. A janitor found his body in shrubbery near a parking lot four to five hours after his death leap. Investigators said Mr. Chung, in several suicide notes, asked for forgiveness for what he called his foolish act. He urged that economic ventures with North Korea continue. He also reportedly requested his ashes be scattered over a scenic North Korean resort where Hyundai runs a money-losing tourism project. South Korean Unification Minister Jeong Se-hyun, in a domestic radio interview, said he does not think Mr. Chung's death will affect inter-Korean projects.

 

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