Friday, 6 April 2012


This  article is from report on bussines and Globe and  Mall Magazine  May  2010  issue   by  John  Daly and  Mich  Moxley.

From the outside, Hyundai Motor Co,'s headquarters near  Seoul doesn't look like the home of the World's fastest-growing carmaker. 
The two  21-storey glass towers, linked by an atrium, wouldn"t attrack much attention in a subarb of  Toronto  Or  Vancouver.

Come here at 5:30 in the mornng, however,and you start to see the Hyundai difference. Yes that's an Olympic-sized swimming pool in the basement and, yes ,that's the leadership of the company doing laps or working out in the adjacent gym before they start another marathon day.

And come up to the second floor-if only in your imagination, because outsiders and indeed most employees aren't allowed here--and you'll see another marker of Hyundai's distinct culture : a computerized worldwide command -and control centre that could pass for a set in James  Bond movie.

And then,if you get to the city of  Ulsam,300 kilometres to the southeast on the Sea of  Japan, see how the sheer enormity of  Hyudai's highly centralized manufacturing overwhelms you. Here the company operates the world's largest auto plant,spread over  1,233 acres,producing up to 5,600 cars a day. The place has its own port,capable of docking three  50,000-ton ships at once.

This is not the  Hyundai of the 1980s ,when the brash young company tried to establish a beachhead in  North america by flooding the market with cheap and poorly made compacts.The  Pony and the  Excel became the butt of jokes for years :  Even  David  Letterman piled on,suggesting that the best way to scare astronauts would be to put the company's distinctive  "H" logo on a spacecraft's control panel.

Executives in  Seoul were humiliated by their company's shabby reputation. But they learned from their mistakes. In the 1990s they committed themselves to quality,an intense work ethic,and a centrally directed long-term plan that is now shifting into high gear just as many of  Hyundai's rivals in  Detroit and  Japan are faltering.

By almost all measures ,2009 was a banner year for  Hyundai,and a brutal one for its major competitors.Worldwide, the Korean contender surpassed  Ford to become the  fourth-largest automaker. In the recession-battered, Hyundai was the only major manufacturer to increase sales--climbing by 9% to 675,000 vehicles while total industry sales shrank by 21%. In Canada,Hyundai sold more than 100,000 vehicles,making it the fastest-growing import brand.In  China,the company's sales roared forward by 94%last year.

Hyundai is now just about the only manufacturer that can focus all its energy on the future.Toyota is still struggling to recover from the defective-accelerator scandal that torpedoed its sales and morale,and  Detroit's Big Three are still wrestling with the legacy of two decades of decline.Meanwhile ,Hyundai is pushing ahead with guality and styling improvements to its existing models,as well as introducing upscale new ones,including the Eguus, which arrives this fall and will compete with  Mercedes and  BMW.

And while Hyundai may have lagged in the race for the green car,it;s aiming to leap ahead there ,too.The company's first gasoline--battery hubrid arrives in showrooms later this year. It also has ambitious plans to introduce the holy grail of green cars by 2015--a hydrogen fuel cell-powered vehicle that sells for less than  $50,000 (U,S )

HOW  HAS  HYUNDAI  PROSPERED  IN  RECENT  YEARS  as almost all of its rivals have stumbled?  It has to do with the country where it was born,  THE  LEADERS    WHO  HAVE  RUN  THE  PLACE   AND THE   SAVVY   DECISIONS   THEY' VE   MADE .  

Hyundai  is still a relatively young  carmaker ,and essentially remains a family-run company. That's one big reason it has been able to maintain focus and discipline. The company is olso one of the key actors in the astonishing economic surge in  South Korea since the 1960s. The success story is based on a national  bussines culture that is hard-working,highly   educated, ambitious and export-oriented. South  Korea's growth -- and no small amount of internal controversy--also steams from central economic planning by  authoritarian, pro--U.S. regimes  that  have worked closely with  a  tightly knit network of several dozen family--owned conglomerates called   chaebol. 

The push  began  under  President   Chung-Hee  Park, a general   who  seized  power  in  1961  and ruled  until  his  death  in  1979.   When  Park took over,  South  Korea was an improverished agricultural country   whose  average per--capita income was about  the same as    Ghana's .  Park curtailed  imports ,and channelled loans from foreign lenders and domestic banks into export-oriented manufacturing concerns owned by the  chaebol.  His successors continued these practices until the Asian currency and financial crisis of 1997 forced them to rein in the  chaebol somewhat. But the country's biggest industrial enterprises ,inclunding giants such as  Samsung and  LG ,are still family controlled and supportive of one another.

( Ετσι   έρχεται  ή  άνάπτυξη.  Και  οχι  με  λογια.!! 

Αλλά στην  Ελλάδα άρχίσαμε με παλιανθρώπους και ό κάθε έπόμενος ηταν πιό παλιάνθρωπος άπό τον πρώτον. ) 

It's hard to argue with the results. South  Korea's  GDP  swelled exponentially,from about  $3  billion ( U.S.) in the early  1960s  to  more than  $1  trillion (U.S.) in 2007, or more than  $20.000(U.S.) per capita for the population of  49  million . In 2009 ,South Korea was the world's ninth - largest exporter,ahead of the United Kingdom,Russia and Canada.
( And if i remember corectly its the eleventh largest economy.)

Hyundai grew out of a car repair shop founded in  1947 by  Ju-Yung Chung.  Over the next three decades ,he expanded into other industries, including engineering,construction and-in 1967- auto manufacturing. In 2000 ,a year before he died, Chung split up his holdings among his sons,giving each control of what are now separately owned companies,including  Hyundai  Heavy  Industries Group and Hyundai Asan, a real estate development and tourism company.   

( Και στην Ελλάδα έτοιμες έπιχειρήσεις όπως  Πειραϊκή-Πατραϊκή Εσκιμο και άλλες τις έκλισαν.)  

Mong-Koo (M.K.) Chung became chairman of Hyundai  Motor.

M.K. Chung,now 72,assumed the helm when the automaker was still smarting over the Pony and the Excel. Those two models were hot sellers at the start. Hyundai started exporting the Pony to Canada in 1983. Priced at about $6,500, the Pony sold more than  57,000 units in 1985, making it the no. 1  import model in the country. But the car's exterior and interior finishes were poor,it rusted easily in the Canadian winter and the plastic heater core often froze.

The experience was similar in the  U.S.  When the front-wheel-drive Excel was introduced in 1985. The car was priced at less than  $5.000 ( U.S.) was voted one of the year's  10 best new products in a  Fortune  Magazine survey,and sold more than  168,000 units in its first year. But sales started skidding in  1988 . Part of the explanation for the slide is that  American consumers didn't know anything about  Hyundai at the start,says  Finbarr  O'Neill,who joined  Hyundai  Motor America as general counsel in 1985,and was  CEO  from  1998 to  2003. People just assumed the vehicles were  Japanese guality, he recalls. They weren't.

After the Pony and Excel debacles,O'Neill and Kelleher say that everyone in Hyundai knew that the company needed an overhaul. Although  M.K. Chung didn't officially succeed his father in the top job until 2000, Hyundai executives credit him for laying out a long-term guality strategy and stiking to it.

The company had already started making some improvements in the 1990s. An early milestone was the development of  Hyundai's first proprietary engine,the  Alpha,in 1991. In 1997 the Asian financial crisis triggered the collapse of a third of the  30  largest  chaebol, and exposed inefficiencies in the Korean system.  Among  them:  The country had seven automakers Hyundai bought  a 51% stake in its principal rival, Kia  Motors .  Internally with the 1999 model year  Hyundai was confident enough of the guality of its cars to introduce a  10  year powertrain warranty in the  United  States an industry best-practice at the time.

But Hyundai still needed to do more work to catch up to its overseas rivals in guality. As was the case with  Toyota and other Japanese   manufacturing successes in the 1960s and 1970s,Hyundai didn't spend appreciably more than its rivals on research and  development. Rather the company studied the best technology and processes of its competitors, and applied what it learned.

In 2000 Hyundai adopted the six sigma management discipline. The process uses intense statistical analysis to identify flaws in a manufacturing process. Quality specialists rate processes.

One of the great things about management in Korea is the ability to seek out criticism and deal with it.

That's a striking difference from Detroit whose downfall was a large element of hubriw. And the new attitude was also strikingly different from the  Hyundai of old.

Hyundai now didn't try to race to get ahead as it had done in the 1980s, Models such as the Accent subcompact and the Sonata sedan went through facelifts and mechanical upgrades in the 1990s. When Detroit went  SUV -mad in the late  1990s and hit the jackpot at first  Hyundai did respond with  Santa  Fe,but didn't bet the farm as  Detroit did.

Hyundai was also cautious about joining the rush to lower costs by building new plants in low-cost / high-incentive jurisdictions such as the anti-union southern  U.S. states,

Meanwhile the quality drive started to bear fruit. in 2003  Hyundai tied  Honda for second place in an annual reliability ranking by  consumer reports magazine (Toyota was first ) .In 2004  Hyundai scored a breakthrough in  J,D.Power's widely watched initial quality survey.

Two big hurdles were looming however. First it can take years for quality -survey scores to boost sales. And  M.K. Chung was about to be slammed by a massive embezzlement scandal.

Chung rarely talks to  English -language reporters and he declined to be interviewed for this story. But he's genuinely reveted by Hyundai executives around the world .

The firm sells cars in more than 190 countries.

All of Chung's resources were put to the test in  April, 2006, when he was arrested in  Seoul on charges that he had siphoned about  $100 million ( U.S.) of company money into slush funds to bribe government officials and bankers. He spent two months in jail before being released on bail,was convicted in  February  2007 and sentenced to tree years.

That September a higher court suspended the sentence ,citing  Hyundau's importance to the economy and Chung vowed to keep a promise he made in 2006 to donade  $1  billion to charities. In august 2008 Chung was one of  341,000 executives who received pardons from South Korean President  Myung-Bak  Lee.

Yet the company never stumbled .It has introduced better and more stylish cars over the past five years,building on several long -standing advantages. Among the biggest are cost and price. Hyundai's cars aren;t as widly cheap as they were in the 1980s but they sell for  5%to 10% less than competing models.

Yet Hyundai's most recent reported earnings were a net profit of $ 1.7 billion (U.S.) on sales of $ 18.7 billion for the first nine months of 2009. Toyota posted big losses over the same period and Ford was the only one of Detroit's Big Three to earn a profit.

How does Hyundai build cars so cheaply ?  Management in Korea wouldn't share cost data. Even Hyundai Canada say they don't know those numbers. Still it is possible to identify several factors and dispel some myths.

First many  North Americans assume that Korean autoworkers are less militant than unionized workers here and that they earn meagre wages.  Neither is true.  The basic hourly wage in U.S. plants represented by the United Auto  Workers is about  $28  U.S. an hour but health care and other benefits can double that cost.
Hyundai says  its Korean assembly-line workers with  10  years of experience earn about  $  50,000  U.S. a year based on a 50 -hour workweek.
That coincides with some analysts estimates which peg  Korean wages and benefits at about $22 U.S. an hour . Still the Korean labour cost is substantially higher than the typical  410  U.S. in Mexico and just $3 U.S. in China.

Given the sustantial pay and benefits it's paying in Korea  Hyundai is shifting global production of its small lower  profit margin models to  India.

Στην  Ελλάδα  τα κλείσαται και τα  στειλαται  στην  Τουρκία .  Και οι Τουρκοι παραγουν  2  εκατομμυρια  αυτοκινητα το χρόνο.!!

For bigger higher priced cars however rank and file remuneration is a les decisive cost factor.  I would look more at their world-class efficiencies . The company says three of those efficiencies are its mature and highly competitive parts suppliers in Korea.
Its own proprietary technology  which it owns and therefore doesn't have to pay to license and its centralized control of worldwide production with the very latest information technologies.

There's also the sheer scale of  Ulsan. The five factories that make up the complex can produce up to 1.6 million vehicles a year. But execcutives and industry analysts say that even Hyundai's newer plants use up fewer labour hours per vehicle than its major competitors . On a recent visit to the Asan plant about  100 kilometres south of Seoul where  Sonata and  Azera sedans are made there were only handfuls of workers on long streches of the assembly line  they were overseeing  robots. And the company says its Sonata plant in  Alabama which opened in  2005 requires even fewer workers per car.

The energy and commitment of the managers in Korea is also formidable. Normaly i come to work at 5:30 in the morning. In the gym i can see all the management there says Chang-Hwan Han,senior vise-president, American division in Seoul. We'er in the office by 6:30. We finish late. M.K.Chung reportedly has breakfast with his family at 4:30 a.m.and arrives at the office shortly after 6.

The company is also sufficiently nimble to get jump on its rivals when they falter. Central control can spell bureaucratic inertia,yet executives say Hyundai makes decisions faster than its competitors.Speed is the DNA of our company, says Seong-Hwan Kim, senior vise-president,marketing division. We go after our target.

The heart of Hyundai is the futuristic Global command and Control Centre on the second floor of headquarters. It operates around the clock,and boasts dozens of screens relaying up-to-the-minute data and live video feeds from allof Hyundai's assembly lines and research centres around the world.The company also tracks container shipments from its parts suppliers to its own factories in real time.

Despite the centralization and all the attention to detail in Seoul ,Hyundai  Canada marketing vise-president John  Vermile says the company gives local executives enough autonomy to implement decisions  quickly. A case in point is the Hyundai Assurance program that the company rolled out to U.S. consumers in early 2009 ,as the recession took hold. Buyers could purchase insurance that would allow them to walk away from their dealer purchase plan if they lost their job,or suspend payments for 90 days .

Bernard Swiecki a sevior project manager at the Centre for Automotive Research ,a non profit think tank in Ann Arbor Michigan was impressed by how well thougthout it was. It was very cleverly marketed at the heigth of the economic crisis he says. It wasn't just a sales pitch or a tag line.
Hyundai has also become more comfortable manufacturing abroad. In addition to Korea and the U.S. it now has plants in China ,India, Turkey and the  Czech Republic, and plans to open factories in Russia and Brazil. In the first three months of this year,for the first time ,it sold more vehicles made outside Korea  443.000 than inside  397.000.

Image is at least as important as substanse in the car business ,and for Hyundai its the crucial frontier, Hyundai scored  well again in J.D. power's initial quality survey for 2009,finishing behind only luxury brands  Lexus,Porsche and Cadillac.
Also Hyundai's 2009 Genesis a $35.000 U.S. upscale sedan that competes with models such as the Chrysler 300C and Toyota Avalon,was selected as North  American Car of the  Year by a jury of  50  veteran auto journalists. In Seoul ,executives were particularly proud of that  award. It's another great milestone for us. It gives credit to our brand, says  Seong-Hwan Kim, the marketing head.

Executives hope such plaudits will accelerate the transition in consumers'minds that the company's vehicle quality is as good as,or better than its rivals. With our last -generation product  within the last four years  we got it to the level where we knew we had the beef, says Hyundai Canada 's  Kelleher. John  Vernile adds that quality pays off in customer loyalty.  Last year  53% of our buyers were repeat buyers. That's not far from the best in the industry.

J.D.Power's Finbarr  O'Neill says that Hyundai executives should be proud, because it's getting more difficalt for manufactures to differentiate on quality,and consumers'design expectations are getting higher. The idea of quality problems has started to change from just the mechanical fixing of things,to difficult-to-use, says  O'Neill.

Can Hyundai move further upscale?  It plans to introduce its top-of-the-line  Equus sedan in North  America this fall. The  Equus isn't a volume model. For us it's the first model to go to the  $60.000 U.S. mark, says American  division senior  VP  Chang-Hwan  Han. We want to show our prestige and tachnology to the North American market.

But auto industry analysts think it will be a challenge for  Hyundai to sell the  Equus at its existing dealerships. When Toyota , Honda and Nissan moved upscale in the 1980s, they introduced new brands :Lexus, Acura and  Infiniti. People are sort of accepting a $35.000 to $40.000  Genesis says J.D.Power's David  Sargent. Equus however, is seriously in Mercedes, BMW and  Audi territory. It's a whole different ball game.

Mind you  Hyundai has raised its game at the dealer level,too. Greg  Stewart president of  Pathway  Hyundai in  Orleans  Ontario a suburb of  Ottawa, signed on with the company in 2002. His first Hyundai showroom was a former burger joint . My office was by the washroom, he says.

In 2002 Hyundai Canada asked  Stewart to be one of the first participants in a long-term program to upgrade the look and expand the capacity of its dealerships.The program, which was completed last year, has required a considerable leap of faith by the dealers themselves-- $2.6 million worth on average .As rival manufacturers have struggled to hang on to dealers in Canada over the past two years, Hyundai has expanded, adding  16  in 2009 including about a half -dozen from  GM.

For the moment  Stewart admits he isn't all that excited by the Genesis or the  Equus. I can't see people spending  $75.000 on Hyundai rigth now, he says. He figures that in the time it takes his dealership to sell a handful of Genesises ,he can sell hundreds of  Sante Fes and sonatas. But that's part of the whole point: Because just about all of its departments and divisions around the world are pushing ahead so fast, no one initiative is crucial.

Hyundai can now afford to  dare.!!

Οταν οι Ελληνες  Εφτιαναν  καραβια στου  Σκαραμαγκά οί  Κορεατες δεν έφτιαναν  ουτε βαρκες.
Σημερα οί Κορεατες  κανουν καραβια και οί Ελληνες κανουν  άντίσταση και ανηπακοή.!

Ετσι παράγεται ό πλούτος . Ετσι γίνεται ή άνάπτυξη.. Και πάνω άπό ολα θα πρέπει να έχης κάνη μιας δεκάρας δουλειά στη ζωή σου για να ξέρης πως δημιουργούνται οί δουλειές και ή άνάπτυξη.!!

Και οχι μόνο με λόγια.!!  

( Και στην  Ελλάδα έτοιμες έπιχειρήσεις οπως  Πειραϊκή --Πατραϊκή  έσκιμο και άλλες τις  έκλεισαν.)