중앙데일리

Coping with an unpredictable state

[The faces inside KOREA’S CONGLOMERATES : Hyundai]

Apr 27,2009
Hyun Jeong-eun (54)
  • Hyundai Group chairwoman
  • Bachelor’s degree in sociology, Ewha Womans University; Master’s degree in human development, Fairleigh Dickinson University
  • The Kaesong Industrial Complex has long been a symbol of cooperation on the Korean Peninsula, and since the North launched a rocket earlier this month, the business park has been at the center of a downward spiral in inter-Korean relations. North Korea cut off and reinstated travel through the border without warning, preventing employees from returning home. And when the Lee administration met for the first time in bilateral talks with the North on Tuesday, they took place in Kaesong - and ended in 22 minutes.

    One roadblock: the North’s refusal to allow access to a South Korean man under detention by the North; he works for a company called Hyundai Asan. To invest through storms like these takes patience few businessmen possess.

    But the head of Hyundai Group, which owns Hyundai Asan, is a woman: Hyun Jeong-eun.

    And on April 15, as the North expelled international inspectors from its nuclear complex at Yongbyon, the chairwoman wasn’t at home worrying. She spent the afternoon in drizzling rain at the opening ceremony for Hyundai Asan Tower, the world’s tallest elevator tower, in Icheon, Gyeonggi. The tower is named after the pseudonyum of the late Chung Ju-young, the founder of Hyundai Group, once Korea’s largest conglomerate. After a trip on the elevator, Hyun, the late founder’s daughter-in-law, inspected the Chung Mong-hun R&D Center, a laboratory on the tower’s first floor named after the group’s former chairman, who committed suicide in 2003 during a slush fund scandal.

    Mong-hun was the fifth son of the founder and Hyun’s husband. She inherited the post after his death. Hyun has promised as a manager to support competent subsidiaries of the group, and her involvement in the construction of the 205-meter tower, with its five elevator cars, is a good example.

    “When we [the Hyundai Elevator Company] asked for active investment in technology to build the elevator, the chairwoman asked us why we didn’t come up with the idea earlier,” said Song Jin-chul, president and CEO of Hyundai Elevator, an affiliate of Hyundai Group and the country’s biggest elevator maker by sales.

    Hyundai Elevator spent 75 billion won on research and development to build the tower. Since Hyun took the reins in 2003, Hyundai’s eight affiliated companies - Hyundai Network, Hyundai U&I, Hyundai Asan, Hyundai Research Institute, Hyundai Securities, Hyundai Logistics, Hyundai Merchant Marine and Hyundai Elevator - have all received support that helped lift the group’s overall sales 135 percent, to 12.78 trillion won last year. The group’s operating profit has also jumped 74 percent from 2003 to 760 billion won last year. Those numbers have drawn notice worldwide.

    Hyun was selected as one of the world’s “100 Most Powerful Women” by Forbes magazine in 2008. As a reason for ranking her 73rd, Forbes noted that she “grew the company solidly.”

    The Wall Street Journal also included Hyun as 36th on its “50 Women to Watch 2007.” The WSJ observed that under her leadership, the group has performed well. It also described her as “the person with the best chance to persuade North Korea to open up its economy.”

    Considering that her only professional experience before being named chairwoman was charity work, industry experts have been surprised by her success, especially since she took control of the group under the worst possible circumstances. Her husband, Chung Mong-hun, killed himself after being indicted for paying money to North Korea to help Hyundai Asan gain a foothold there. The founder of the group had long harbored a dream of opening businesses in the North, where he was born.

    The original Hyundai Group, now split into many parts, dates back to 1947, when Chung Ju-young established Hyundai Togun, now Hyundai Engineering and Construction. Ju-young and his family later expanded into shipbuilding, automobiles and retailing, among others. By the 1990s, the group owned 49 subsidiary companies, its rise paralleling that of the Korean economy.

    Hyundai Asan Tower, the world’s tallest elevator tower, opens in Icheon, Gyeonggi, on April 15. Hyundai Elevator, an affiliate of Hyundai Group, spent 75 billion won to build the tower, which is 205 meters tall and has five elevator cars.
    But during the Asian financial crisis and after Ju-young’s death in 2001, the group started to fracture. Some subsidiaries were sold off, with different family members taking over each new firm. Chung Mong-koo, the second son of the founder, took over Hyundai Motor, the nation’s largest carmaker, while Chung Mong-joon, the founder’s sixth son, became head of Hyundai Heavy Industries, the world’s largest shipbuilder. Today a National Assembly representative, Mong-joon remains as an adviser. The remains of Hyundai Group focus on elevator and container service businesses and Hyundai Asan, the biggest investor in North Korea, which runs tours of Mount Kumgang and promotes the Kaesong Industrial Complex. Hyundai Group hopes to reach 34 trillion won in sales by 2012, and to get there it plans to buy back Hyundai Engineering and Construction, the original Hyundai company that split off in 2001.

    But Hyundai Heavy Industries, another spin-off from Hyundai Group, is also trying to purchase Hyundai Engineering and Construction. Industry experts say Hyundai Group is trying to recapture its old glory as one of Korea’s dominant conglomerates by purchasing its former subsidiaries.

    The key figures in that push are below.

    Ha Jong-sun, an ex-lawyer and Hyundai Group’s president of planning and development, was named to the post in 2008, after serving as president of Hyundai Marine and Fire Insurance Company. He returned to Hyundai after being arrested for bribery during Lone Star’s acquisition of Korea Exchange Bank in 2003. Kim Seong-man, president and CEO of Hyundai Merchant Marine, also took his post in Jan. 2008. Since then the company has broken its sales record, posting 8.003 trillion won for last year. After acquiring his master’s degree at the University of Michigan, Kim had worked at Cincinnati Electronics.

    Choi Kyung-soo, president and CEO of Hyundai Securities, is a former professor of business administration at Keimyung University who joined the company in April 2008. Though his division saw a 22 percent fall in net profit for 2008, it is in the midst of a transformation into a comprehensive investment bank with a focus on wealth management and corporate financial services. Cho Kun-shik, a former vice minister of unification, became president and CEO of Hyundai Asan in August 2008. He is an expert on North Korean studies, with a degree from the University of North Korean Studies at Kyungnam University and a background as former vice minister of unification.

    Song Jin-chul has been president and CEO of Hyundai Elevator since April 2007. Since then the company has become the nation’s No. 1 elevator maker. Park Jae-yung was named president and CEO of Hyundai Logistics this year, before which he worked for Hyundai Engineering and Construction and Hyundai Merchant Marine. The company aims to expand its logistics businesses and construct the country’s largest shipping terminal. Since July 2007, when Yi Ki-seung was named president and CEO of Hyundai U&I, which provides IT services to logistics companies, sales have increased by 50 percent. Kim Joo-hyun has been president and CEO of Hyundai Research Institute, one of the nation’s leading private think tanks, since 2004. He is also the director of the Association of Korean Economic Studies and the managing director of the Korean Finance Association.

    Hyundai Investment Network, headed by Hwang Hyun-taek as president and CEO, focuses on securing new business opportunities, with a specialization in investment and management of energy and mineral development and social infrastructure.

    A stone plaque marks the Chung Mong-hun R&D Center, a laboratory on the tower’s first floor named for Hyundai Group’s former chairman, Hyun’s husband. [YONHAP]
    *“Faces inside Korea’s conglomerates” is a weekly series about key figures in major conglomerates to help readers understand Korea’s business world.



    By Lee Eun-joo [angie@joongang.co.kr]


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