Founder and former chairman of the Hyundai Group
Born: November 25, 1915, in Asan-ri, North Korea.
Died: March 21, 2001.
Family: Son of Chung Bong-sik and Han Seong-sil; married Byun Joong-seok; children: nine.
Career: 1931–1934, construction laborer; Bokheung Rice Store, 1934–1935, clerk; Kyongil Grain Company, 1936–1939, founder and manager; A-do Service, 1939–1943, founder and manager; Hyundai Motor Industrial Company, 1946–1987, founder and chairman; Hyundai Civil Industries, 1947–1987, founder and chairman.
Awards: Commander of the British Empire, Queen Elizabeth II, 1977; honorary degree, George Washington University, 1982; Olympic Medallion, International Olympic Committee, 1992; Grand Prize, Korea Academy of Business Historians, 1999; listed as one of the 10 greatest persons in Asia in the twentieth century, Far Eastern Economic Review, 1999 .
Publications: Born in This Land, 1992.
■ Born of a peasant family in what is now North Korea during the period when the country was a Japanese colony, Chung Ju-yung showed an early inclination for entrepreneurship. After surviving the Korean War of 1950–1953, he set up two fledgling companies, one dealing in auto repairs and the other in construction. These companies formed the core of a vast industrial empire that became the Hyundai Group, one of South Korea's major chaebol , or family-owned business conglomerates. As much a nation-builder as an industrialist, Chung believed that businessmen should serve a larger purpose than the narrow mandate of profit; they were, in his view, also responsible for helping develop the strength of a nation and its people. He gave back to his society by setting up the Asan Foundation, whose philanthropic activities ranged from medical support and social welfare programs to research, development, and scholarship funds. Chung was also active politically, working tirelessly at the end of his life to promote economic development and cultural relations between the two sides of his divided country.
Chung Ju-yung was the first son of a large impoverished peasant family in Asan-ri, a village in what became North Korea after the Korean War ended in 1953. He came of age during the Japanese colonial occupation of Korea, which began in 1910 and lasted until the Allies defeated the Axis powers in 1945. Chung's early education was meager. He attended a primary school in Songjon and learned Chinese literature from his grandfather. His formal education ended when his parents withdrew him from school because they needed his wages to help support the family. Rather than submit to the likelihood of a lifetime of poverty, Chung twice tried to leave his village in search of better prospects in the large city of Seoul. In his first attempt to leave home when he was 16, he financed his journey by selling the family's only cow for a small fee. Chung finally succeeded in leaving his village for good in 1931 at the age of 18, when he found work as a laborer at several construction sites. Chung's construction assignments included Inchon harbor, a professional school in Boseong, and a taffy plant in Poongjeon.
After several years of construction work, Chung obtained a position as a clerk at the Bokheung Rice Store in Gyeonseong, a neighborhood in Seoul. Determined to go into business for himself, he established the Kyongil Grain Company, only to have to close it in 1939 when rice rationing was implemented by the Japanese authorities. The 24-year-old entrepreneur then turned to repairing cars via the A-Do Service, a company that he owned jointly with a Japanese partner. That venture lasted four years but was folded into its Japanese parent company in 1943.
Blessed with natural intelligence and a desire to learn, Chung picked up his education informally by reading business documents and the lectures of better-educated associates late at night. More importantly, he hired educated men who could fill in the gaps in his own schooling.
Aware of the business opportunities made possible by the end of World War II and the ousting of the Japanese from Korea, Chung founded two companies in rapid succession after the country's liberation in 1945—the Hyundai Motor Industrial Company in 1946 and Hyundai Civil Industries in 1947. With the former focused on auto manufacturing and servicing and the latter on heavy construction, Chung's business ventures were at the center of Korea's massive postwar drive for reconstruction and industrialization.
Hyundai Civil Industries was responsible for building much of South Korea's transportation infrastructure from the 1950s through the 1970s. It was considered the top company in its industry. Chung won major government contracts, including the Soyang River multipurpose dam in 1967, the Gyeongbu Expressway and a nuclear power plant in 1970, and the Ulsan shipbuilding yard in 1973, among many others. Through the efforts of his younger brother In-yung, who could speak English and was on friendly terms with U.S. Army engineers, Chung won contracts from the American military to build facilities for their personnel.
Hyundai also won major projects overseas. In 1965 Hyundai won the bid to build the Thailand Expressway. In the 1970s the company was granted a major contract in the Middle East. It successfully completed the Jubail industrial port in Saudi Arabia, at that time the largest construction project of the 20th century.
Chung continued to expand his empire into industrial chemicals and shipbuilding, turning Hyundai into one of South Korea's major chaebol . With no experience in shipbuilding, he created the Ulsan shipyard, the largest shipyard in the world. What made this project remarkable was that he set about to build both shipyard and vessel simultaneously, reasoning that the two tasks need not be completed sequentially. With orders from an Italian company, Hyundai delivered its first vessel within three years rather than the expected five.
As South Korea continued to industrialize at breakneck speed, Chung dreamed of building a car using only Korean technology and expertise. Setting his automotive company to that task, he introduced the Hyundai Pony Excel in 1986 amid a burst of national pride. Chung continued to explore new technologies during the 1980s and 1990s, incorporating semiconductors and magnetic levitation train technology into Hyundai's automobiles.
The relentless pace of building the Hyundai empire, often with limited or no previous experience, came at a heavy cost in terms of human lives as well as finances. The Gogryong Bridge construction project in 1953 nearly bankrupted Hyundai. The Jubail project also suffered from the company's lack of experience. The concrete Soyang River dam encountered several significant problems during its construction and drew much criticism of Chung.
Working conditions in Chung's factories were hazardous and led to visible conflicts with workers. Chung, however, never forfeited a project. Although his determination led to an impressive roster of achievements, Korean factories and plants became known as some of the most dangerous in the industrialized world. It was not until the 2000s that the company guaranteed the safety of its employees. Sensitive to criticism, Chung's successors at Hyundai were quick to document the annual increases in corporate funds dedicated to worker welfare throughout the late 1990s and 2000s.
Chung resigned as active chairman of the Hyundai Group in 1987, although he remained its honorary chairman. To everyone's surprise, however, he announced that he was beginning a new career in politics. Chung maintained that economic power was not sufficient to guarantee a nation's strength; it must have wise leadership as well. Ever the nation-builder, Chung declared that South Korea's long-term security and economic competitiveness required unification with Communist North Korea. He thus made the initiation and expansion of economic relations between the two Koreas his short-term project, with national unification as the ultimate goal. Chung's Unification People's Party campaigned under the slogans "Importance of Economy" and "Unified Economy." The Party won 31 seats in the 1992 Korean presidential election, but Chung failed to win the presidency.
Chung retired from political activity after 1992 but decided to work toward his goal through an altogether different channel, namely tourism. The Mount Kumgang Tourism Project and related activities developed tourist facilities around scenic Mount Kumgang in North Korea near the South Korean border. Opened in 1998, the project permitted hundreds of thousands of people to cross the heavily guarded border (the DMZ or demilitarized zone) and visit the site.
Chung also continued his attempts to develop economic relations between the two Koreas. In 1998, at the age of 84, he worked with the government of Kim Dae-jung to stage an economic development summit between North and South Korea, an episode that unfortunately became tainted with scandal. President Kim had determined that relations with the Communist North were best stabilized by offering economic assistance and wanted to provide a $100 million donation as a way to jump-start economic development in North Korea. The problem was that Kim could not find a legal way to transfer the funds. Instead, he turned to his friend Chung, who was himself negotiating a $350 million contract to develop businesses in the North. Kim persuaded Chung to increase his investment by $100 million with money from secret loans provided by the government-controlled Korea Development Bank. The historic South-North summit took place, with Chung traveling across the border in a motorcade of cars containing some 500 "unification cows"—a gift to the North Korean people. But Chung's reputation suffered a severe blow when it was learned that state funds had helped facilitate the event.
Chung also turned to sports to reduce tensions by creating the Unification Basketball Contest, which was held alternately in Seoul and Pyongyang, the respective capitals of South and North Korea. By the mid-2000s, the two sides were holding regular talks on a multitude of issues aimed at reducing tensions in the Korean peninsula. Railway lines and other infrastructure projects linking the divided nation were reestablished. Agreements on various issues ranging from communications facilities to fishing rights were also achieved.
Chung's management style largely depended on the observer's perspective. His admirers in the Korean business community revered him as a father figure. Westerners, on the other hand, saw Hyundai as a tightly controlled organization whose founder took worker complaints as personal offenses. Chung described himself as an older brother or father, but recurrent conflicts between labor and management characterized his tenure at Hyundai. Although Chung took pains to minimize the impact of these conflicts, he nevertheless came to concede the need to address worker issues.
Chung had an abiding faith in the intelligence and diligence of his workers, holding that Korean human resources are second to none. His attitude was that of samgo choyeo , or inviting talented people to do their work patiently before granting them authority and responsibility. Chung's approach was reflected in the core values still held by Hyundai in the early 2000s—diligence, frugality, and love—and implemented by a management policy based on trust. Although Chung was a hard taskmaster, he did not hold himself aloof from his employees. A former laborer himself, Chung enjoyed engaging his men in bouts of Korean-style wrestling and volleyball. He also regularly attended training sessions for new employees.
Chung Ju-yung was widely recognized as one of South Korea's nation-builders. In 1977, he was unanimously elected chairman of the Korea Federation of Industries by his peers. He held that post for a full decade. In 1999 the Korea Academy of Business Historians awarded him its grand prize for establishing businesses. In the 1980s his influence helped reshape the South Korean economy from one dominated by government projects and requirements to a civilian-controlled economy, thus spurring the growth engine that has given South Korea the nickname "Miracle of the Han." The name refers to the Han River, which bisects Seoul from east to west.
Whereas many Korean businessmen of Chung's generation were focused almost exclusively on industrial development and expanding the assets of their chaebol as well as corporate profits, Chung early understood the importance of giving back to the wider community. In 1977 he founded the Asan Foundation, named for the village of his birth. Chung intended to make the scope of its activities comparable to those of the Ford or Rockefeller Foundations.
The Asan Foundation was organized into four major areas of service: medical support, social welfare, research and development, and a scholarship fund. Through its efforts, the Foundation established nine hospitals throughout South Korea, built Ulsan Medical College, and funded the Asan Life Sciences Research Institute. The Foundation also initiated cooperative arrangements between industry and academic institutions by supporting such academic research as the Sinyoung Research Fund.
In terms of sports, Chung lobbied relentlessly over a five-month period for South Korea to host the 1988 Summer Olympics. His success in bringing the Olympics to Korea highlighted the accomplishments of his generation in the eyes of the world and became a source of great pride to the people of Seoul. In 1992 the International Olympic Committee awarded Chung an IOC Medallion for his contributions to sports as a vehicle of international understanding.
Chung fell ill with pneumonia in the first week of March 2001 at the age of 85. He was admitted to the hospital but his condition quickly worsened. He died in his sleep on March 21, 2001. After his death the Hyundai Group was broken up into several smaller companies—the Hyundai Motor Group, Hyundai Heavy Industries, and Hyundai Engineering and Construction.
See also entry on Hyundai Group in International Directory of Company Histories .
Breen, Michael, The Koreans , London: Orion Business Books, 1998.
"Hyundai Founder, Asan Chung Ju-yung: A Giant Who Solidified the Foundation of Korean Economy and South-North Exchange," http://www.asanmuseum.com//english/page/content.asp?main_id=70&sub1_id=10&sub2_id=5&sub3_id=0&sub4_id=0 .
Ward, Andrew, "Lunch with the FT: Kim Dae-jung," Financial Times , June 18, 2004.
—Carole S. Moussalli