From a penniless farmer boy who was ignorant of business, Chung Ju-yung established the powerful Hyundai (meaning “Modern”) empire, becoming one of the most respected entrepreneurs in the history of Asian business …
At 10 p.m. on March 21, 2001, Chung Ju-yung died. The next morning, the Korean press wrote about Chung Ju-yung, about his arduous startup path and perseverance, his unique concept of governance, and successful parenting of 11 children. His greatness is comparable to that of Konosuke Matsushita (founder of the National Panasonic Corporation). In 30 years, Chung turned Hyundai into a giant corporation involved in most major industries, from construction to shipbuilding to electronics and the automotive industry; providing jobs for more than 170,000 Koreans.
Running away from North Korea
Born on November 25, 1915, in Asan, Tongchon (North Korea), Chung Ju-yung was the eldest of eight children in a poor farming family. Ju-yung’s formal education ended with elementary school when his father asked him to quit school and support their family. After working in the fields, Ju-Yung moved to work on the railway. In the end, Ju-Yung left home to flee to the South. Being arrested twice by his father, Ju-Yung only succeeded a third time, at the age of 16. Ju-Yung paid for his expensive trip to the South by selling a cow that he stole from his father. In Seoul, Ju-Yung found a job in a rice shop as an errand boy and shipper. He managed to save enough money to open his own rice shop. When the Japanese army occupied Korea, it was illegal for a local person to own a food business. To escape the notice of the Japanese soldiers, Ju-Yung acted as an employee driving his own delivery truck.
In 1940, Ju-yung borrowed money to open a car repair workshop, despite the lack of mechanical knowledge or cars. Ju-Yung’s means of transportation was a bicycle. His business then collapsed. In 1946 (after the official separation of North and South Korea), Ju-Yung resumed his car repair business, naming the workshop Hyundai. In 1947, Ju-yung established Hyundai Civil Industries with 11 employees (including an “engineer” who was a mechanical engineer teacher). Thanks to his brother Chung In-yung, who was fluent in English, Ju-Yung won many construction contracts with the U.S. troops in Korea. At the end of the war (1953), Hyundai Construction became one of South Korea’s largest construction companies. Ju-Yung started to target larger projects (including the repair of the Indo-gyo bridge in Seoul). With the company’s becoming more widely known, Hyundai was noticed and invited to participate in many government projects, especially under former President Park Chung Hee’s period. Despite being a renowned businessman in Seoul, Ju-Yung still worked until late into the night and used to walk the 5 km (about 3 miles) from his office to his home, a resting place, and spare storage.
Using a KRW500 bill to borrow $50 million
In 1976, Hyundai introduced its first car, the Pony (Hyundai first exported cars to the United States in 1986). In the early 1970s, Hyundai grew rapidly. With his wife (Byun Jung-Suk), Ju-Yung brought in eight of their sons and one daughter into the corporation. When embarking on shipbuilding, Ju-Yung went to one foreign bank after another to borrow money but was refused by all.
Undaunted, Ju-Yung went to England. Entering Barclays Bank in London, he pulled out a KRW500 bill with the picture of a ship that Korea had built in the 16th century, 300 years before the British launched their first iron ship. Chung Ju-yung emphasized that the Korean shipbuilding industry could have made a great leap forward if there had been no restrictions by the Chosun Dynasty. With the KRW500 bill, Chung Ju-yung received $50 million from Barclays!
The booming oil industry in 1973 was a crucial factor that helped Hyundai grow into one of the giant corporations in the world. Chung Ju-yung quickly realized the opportunity in the Gulf. Before the 1970s, South Korea had no ships larger than 10,000 tons, but the hype about Hyundai by President Park Chung Hee helped bring the first contracts of two 240,000-ton oil tankers from Greece. The later orders came from Hong Kong and Japan. In 1975, the Korean government ordered all imported oil from the Middle East to be transported by Korean oil tankers. Thus, in the late 1980s, Hyundai became the world’s largest shipbuilder.
By the ’80s, Hyundai was Korea’s largest family business. From Hyundai Engineering (construction), Hyundai Motors (car), Hyundai Merchant Marine (shipbuilding), Chung Ju-yung established Hyundai Electronics—which less than 10 years later became the No. 2 computer chip manufacturer in the world. In 1985, he ordered one of his younger brothers, Chung Se-Yung, to establish a car factory in the United States. In 1986, the first Hyundai Excel cars, with Italian design and Mitsubishi engine, made their first appearance on U.S. highways.
Before the 1997 Asian financial crisis, Hyundai’s annual sales exceeded US$90 billion, and Chung Ju-yung with $6 billion in assets became the richest man in Korea. Before transferring chairmanship to his children in 1987, entrepreneur Chung Ju-yung had successfully built the largest shipbuilding company and Korea’s top car company. What is Ju-Yung’s secret? “With initiative, diligence, and ability, I have pushed the corporation forward” – Chung Ju-yung answered the interviewer from Time magazine in 1992.
With an impressive achievement, Chung Ju-yung was awarded a medal from Queen Elizabeth II; and in 1982, he became the first non-American businessman to receive an honorary doctorate in economics from George Washington University. In South Korea, Chung Ju-yung held the chair of the Korean Industry Federation for nearly a decade and was one of the negotiators to help Seoul secure the right to host the 1988 Olympics. Like most self-made billionaires, Chung Ju-yung started to pay attention to politics. In 1992, with personal assets of $4 billion (South Korea’s richest man at the time), he announced his presidential campaign. His Unified People’s Party won 16 percent of the vote and his political career would have probably gone far if Kim Young-sam’s government hadn’t accused Ju-Yung of using corporate funds for the campaign.
Chung Ju-yung built his career, with nothing more than a stolen cow from his father, into one of the most successful corporations in South Korea. And throughout his life, his dream of returning to his fatherland always haunted him. In 1998, he was the first Korean citizen to cross the North Korean border without an accompanying army. He brought with him a cow as if to repay the old debt.
It was one of 1,001 cows (or 500 according to some accounts) donated by Chung Ju-yung to the village of Asan, his birthplace. One of Ju-Yung’s main projects during the return trip was to negotiate with the North Korea government on a tourism project at Mount Keumgang in North Korea. However, Chung Ju-yung died before the whole project was completed.