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 U.S.market, 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.
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 U.S.market, 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.)
