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Tip of the Iceberg

Tip of the Iceberg

I have been fortunate throughout my career to receive extensive media coverage in both Korean and Western publications. I feel a major contributing factor is that as a consultant I cover and am engaged in Korean business.

I have a lot to say, and many people seek out my perspective. In fact, in just the past 6 months, I’ve contributed to Korea Times, CNBC, Branding in Asia, Haps Magazine, and Sisajournal-e.com, not to mention releasing a new book and multiple press releases.

Topics often vary — Hyundai, Startup Ecosystems, EV and Critical Minerals, Smart Cities, and insights into the ever-changing Korean business culture.

So why “Tip of the Iceberg?”
As a prolific writer, I enjoy sharing my perspective, but only a fraction of my insights are shared, like the tip of an iceberg.

It’s in my consulting work that I explore the difficulties that companies and teams encounter in greater detail. I have decades of experience providing solutions and workarounds.

All said, for those who follow my commentaries and writings as well as acquaintances — Have a request for an article? — please let me know.
Have a question or opportunity… let’s talk.

Don

The T600 and the Rise of Kia Motors

October 18, 2023 Don Southerton

Over the years I have been fortunate to meet with and interview many of the early Korean and Western Hyundai and Kia teams and leadership. Today’s successes were built upon their struggles and can-do perseverance.

Last week the Hyundai Motor Group posted some amazing photos of the Kia T600 circa 1969. I shared some more details such as in early 1962 Kia’s Shiheung production line launched the first in the line-up–the K-360. Production would continue until 1973 with over 25,000 of the sturdy vehicles sold.

I’d add the T600 would signal Kia’s rise … ( Kia= Rising out of Asia).

From my 2012 Hyundai and Kia Motors The Early Years and Product Development

Kia Motors [Now Kia] Kia Worldwide is one of the world’s fastest-moving global automotive brands. It has earned a reputation as an industry leader in design styling along with a full line of fuel-efficient vehicles that have earned critical acclaim and dramatically increased consumer awareness. Interestingly, the carmaker had early roots as a Korean bicycle and motorcycle manufacturer.

In the early 1960s, the Kia Motors Company moved beyond first bicycle components, then bicycles, and motorcycles to produce a highly practical K360 three-wheel utility truck. Across much of Asia, similar vehicles met a demand for reliable low-cost commercial transportation that could transport goods and products often in tight urban areas.

Based on the Mazda Mazdago design, the K360 also signaled Kia Motors’ long technology alliance with the Japanese automaker with a number of cars and trucks eventually licensed from Mazda.

During this era of budding Korean economic development, strong technology ties with foreign partners were common. For example, other Korean firms entered into partnership arrangements with international carmakers, including Nissan (Datsun), Toyota, Fiat, GM, and Ford. Korean industrial groups desiring to enter the car sector forged these alliances to gain advanced automotive technology and know-how. In addition, the government implemented strong trade protectionism in an effort to build a self-sufficient import substitution economy.

In particular, the Korean Automotive Industry Promotion Law required cars to be manufactured locally versus imported from foreign markets.

When pressured by the government to produce Korea-assembled cars, Kia Motors leveraged its strength as an engineering-based company and chose not to assemble compact cars imported as knockdowns (CKD). Instead, Kia set up a full-scale production plant with considerable local sourcing of parts.

Sohari

In 1973, Kia’s Sohari plant opened with the initial production of a pickup version of the Brisa. Drawing on the ongoing relationship with Mazda, the Brisawas based on the second-generation Mazda 1000, which was marketed as the Familia in Japan.

The T600 and the Rise of Kia Motors
Brisa

In conjunction with manufacturing the Brisa pickup, Kia Motors also began production of 1-liter gas engines. While the competition sourced engines from their foreign partners, this marked the first Korean company to manufacture its own engines. In the first year of production, 65 percent of the parts in the Brisa, including the engine, drive shaft, and clutch, were manufactured in Korea. This local sourcing was strongly encouraged by the Korean Government and the ratio of locally produced parts increased steadily over the years.

In the fall of 1974, the first Kia Brisa S-1000 four-door sedans rolled off the Sohari production line. Overall the Brisa was a success with 75,987 sold between 1974 and 1981. In 1975 the Brisa pick-up also became the first Kia to be exported when a number were shipped to Qatar in the Middle East.

The T600 and the Rise of Kia Motors
Brisa Sedan, Sohai Plant

Oil Shock

Notably, what spurred the Brisa’s early success was actually its small 1000cc engine displacement. Starting in 1973, an international oil shortage forced gasoline prices to skyrocket creating a supply shortage in Korea.

Veteran Hyundai and Kia Motors executive Mark Juhn who began his career with Shinjin Motors noted that the oil shock had a devastating impact on Kia’s rival— a newly formed and much larger General Motors Korea, a joint-venture company between GM and Shinjin Motors.

Mr. Juhn shared that with high gas prices Korean consumers favored the Kia Brisa and its smaller more economical engine over GM Korea’s first production model, the Chevrolet 1700 with a larger 1700cc engine.

Mr. Juhn also pointed out, “I could say the oil shock brought good luck to Kia but GM Korea struggled.”

[For those of you long associated with Hyundai, Mr. Juhn would later in his career head up Hyundai Motor America and was the driving force convincing HMC leadership to approve and support the game-changing 10-Year, 100,000 Mile Guarantee program].

The T600 and the Rise of Kia Motors
Mark Juhn with Don Southerton, Seoul, South Korea

Steady Growth

By 1976 Kia also strengthened its position in the commercial vehicle sector by purchasing Asia Motors based in Kwangju, South Korea. Asia Motors manufactured heavy trucks, buses, and a line of military vehicles. In addition, to meet the growing demand in Korea for cars, Kia even started CKD assembly of the Fiat 132 sedan, along with the Peugeot 604, a larger model sedan.

Government Intervention

Despite Kia’s successes, government intervention imposed new mandates over much of the growing Korean economy. Direct competition was regulated across many sectors of industry. In 1981, Kia Motors was told to stop producing cars and concentrate instead on light commercial vehicles. In turn, more light truck and van models were added, including the 1-ton Bongo, the Ceres pick-up and some larger truck models.

Ford Alliance

By the mid-1980s the Korean Government decided to change policy and relax its restrictions on the car and truck companies. Kia was allowed to return to car production. Working with Mazda’s Ford alliance, Kia Motors began to produce the Festiva (known as the Pride in Korea). Export to the U.S. began in 1988. The venture was extremely successful with 300,000 Festivas being shipped overseas between 1988 and 1993.

Stay tuned!

More to come on my documented early years of  Kia Motors Kia America, and Kia Worldwide and Hyundai Motor America and  Hyundai Motor Group

Earth Day- Earth Week- Earth Month 2023

Earth Day- Earth Week- Earth Month 2023
By Don Southerton

Reflecting on Earth Day, my ties to Green and Sustainability have reached back in time more than a few years. In fact, it parallels my work with Korea. In the mid-2000s, I was an advisor to developing and building the Incheon, South Korea Songdo International Business District. Under the leadership of Green visionary Stan Gale, the city is the global model for urban sustainability.

Earth Day- Earth Week- Earth Month 2023

Envisioned as a Green, high-technology city of the future — at the time, it was one of the world and Korea’s most significant foreign real estate development projects.

Built on reclaimed land and with partners like Kohn Pederson Fox, Cisco, and United Technology, the forward-leaning project also showcased some of the first LEED-certified buildings in South Korea and Asia.

In conjunction with the Songdo IBD project and my work for Hyundai, around 2007 the Songdo team and I had the opportunity for a VIP visit to Hyundai Motor’s R&D. We even got to fuel their 1st Gen Hydrogen Fuel Cell Electric Vehicles (FCEV), and then test drive the vehicles. At this time, Songdo’s leadership was very interested in FCEV buses for the International Business District powered by hydrogen.

Songdo’s innovations were again the subject of my 2013 article for the Korean government’s Ministry of Culture, Sports & Tourism, highlighting the city’s Green accomplishments.
Link: https://www.scribd.com/document/157552923/KOREA-2013-VOL-9-No-08#

I also hosted a 2013 BBC World Service visit to Songdo IBD, showing off its Green smart city capabilities, capped off by an interview with Cisco’s former Chief Global Strategist Wim Elfrink, an early adopter who popularized the term IoT — the Internet of Things. A day later, we visited Hyundai Motor’s Eco Lab and test-drove their 3rd Gen HCEV, a first-of-its-kind production SUV, which was soon launched in Korea and then California.

In the years that followed, as companies I supported moved to mobility and EVs, I, too, shifted my research and work to these new sectors. Electrification has been and continues to be a major part of my work, leading to an ongoing immersion in the sector supporting Korean startup Grinergy and Green lithium battery technology.

This year we’re seeing a heightened level of engagement fueled by the U.S. Biden administration’s funding more eco-friendly and secure sourcing of related Green technologies at the top of the list. See https://www.linkedin.com/pulse/american-made-limits-sourcing-eliminating-dependence-new-southerton/?trackingId=DMW8HonHQV2b1SGG%2B43GmQ%3D%3D

In particular, the focus on Green, Sustainability, and Resilience is this year’s Earth Day, or as one presenter at a recent webinar shared—it’s more of an Earth Week and Earth Month.

Personally, this includes participating in workshops and presentations at the Federal, State, and local levels, including groups like Yale Blue Green (YBG), who are engaged in environmental and sustainability topics and issues, and the Colorado Electric Vehicle Coalition.

This coming week is no different with plans to attend a Live Earth Day event at NREL—the National Renewable Energy Lab headquarters in Golden, Colorado.

Takeaways
As a Colorado DOT electrification expert shared, the questions their office received just a year ago centered on “if” EVs and related mobility were a good idea—to now a heightened acceptance and questions on expanding infrastructure and issues like micro-mobility, battery recycling, and end-of-life—to expanding availability from urban centers to rural and less economically served areas.

More so, as noted above and in my previous article American-Made, Limits on Sourcing, Eliminating a Dependence on China there is a need for better sourcing and sustainability of the raw materials and components used in Green tech.

Finally, as we reflect on Earth Day, in both in my work and pursuits, I find a greater embrace of new Green technologies, fueled by government and private funding and with a growing public interest in sustainability.

Questions? Comments? Have a project in mind or need support?
Urgent requests Text at 310-866-3777 All other Dsoutherton@bridgingculture.com

Grinergy to Exhibit at 2022 UMEX 

Grinergy to Exhibit at 2022 UMEX 

The Abu Dhadi event to showcase drones, robotics, components, and unmanned systems.

Seoul, South Korea. February 16, 2022

Grinergy, a South Korean headquartered lithium-ion rechargeable battery and battery management systems company today announced that they will exhibit at 2022 Unmanned Systems Exhibition (UMEX) and Simulation Training (SimTEX).

The conference set to kick off on February 20th  in Abu Dahbi is dedicated to showcasing drones, robotics, components, and unmanned systems– key applications for Grinergy battery technology. 

Grinergy offers multiple solutions to revolutionize the shortcomings of the conventional lithium battery industry. Grinergy’s proprietary technology offers remarkable safety with improved charging capability. 

For more information on Grinergy at UNMEX or their battery technology applications, please contact Don Southerton at dsoutherton@grinergy.co.kr or +1-310-866-3777.

Grinergy USA

Year-end Promotions, Restructuring, and New Assignments: Korea’s Corporate Culture 2021

Year-end Promotions, Restructuring, and New Assignments:

Year-end organization-wide promotions, restructuring, and new assignments for teams are traditionally a part of Korean corporate culture. Top to bottom within Korean companies they occur sometime between early December and early January, with the changes to senior leadership announced first, and team level changes as a norm made known the week just before or between Christmas and New Year’s Day.

After the Holidays, teams then report back to work. Some assume new roles frequently in departments where they have little experience—requiring employees to acquire new skills—sink or swim.

In the days that follow those shuffled brief their replacements, as staff remaining in their jobs update new management teams on the status of projects and issues.

Meanwhile, others will be en route to assignments in overseas operations; a challenge for those working outside Korea for the first time.

This can also be a challenge for local overseas operations. In particular, it is common for those newly assigned to be unfamiliar or have very limited experience with the many nuances in the localized foreign business, as well as the new role and responsibilities. Not to mention, working outside Korea is in itself a learning curve that can take months and even years.

And I strongly recommend leadership—Western and Korean– have countermeasures in place to mitigate any transitional gaps. They do occur. In fact, over the years I have worked extensively to facilitate smooth transitions.

So, what to look for…
The top Chaebol will and have begun to announce key promotions, which can provide some insight into future trends. The Chaebol usually also comment on whether this year’s promotion number is more or less than in the past and the reasons “why.”

On restructuring, top Chaebol have already announced plans. These can range from granting more independence to business units to consolidating control.

In their restructuring, SK Group elevated a number of executives to vice-chairman level and granting independent decision-making authority to their key affiliates that span from semi-conductor chips, batteries to wireless network, energy, and biotech.

In contrast, Samsung Electronics noted as a shake-up they will merge 3 of their business units.

Samsung also announced several changes in its corporate policies. With the new year, they will employ a new personnel management system. Under the new system, Samsung will abolish a set of requirements before an employee gets promoted to a certain level, such as a minimum term of service that lasts roughly eight to 10 years. Instead, top-performing employees will be eligible for their work performance and expertise be taken into account as key factors for promotion over time in grade.

The Hyundai Motor Group, too, has announced its executive reshuffle. To align with the new Chairman E.S. Chung’s future vision, we see a plan to bring younger faces on the C-suite with a focus on future mobility and on technology sectors such as infotainment, ICT, and autonomous driving. This then means many of the current leadership are stepping aside to the advisory posts.

New Years’ Message
This said, as in the past, with the new year, we can expect leadership will share their 2022 plans in an annual New Years’ company announcement, too. I monitor closely and as they are in Korean will share when appropriate and upon request.

As a final note, for western global teams, I suggest congratulating those who are promoted but also be sensitive to Korean team members who were passed over… or possibly moved to what may be seen as a less strategic assignment.

BTW Time in grade is just a criteria for promotion, or in some cases if a junior is promoted over a senior it is deemed as their time to retire.

Questions? Please feel free to reach out. dsoutherton@bridgingculture.com

Grinergy Top Pick in ‘K-Startup Center (KSC) Demo Day’

Grinergy Demo Day

Translated by Don Southerton

See the original text:

http://www.sisunnews.co.kr/news/articleView.html?idxno=153895

The 2021 ‘K-Startup Center Demo Day’ was organized and hosted by South Korea’s Ministry of SMEs and Startups, and the Startup Promotion Agency.

‘KSC’ is a startup support program for promising Korean domestic ventures and startups looking to expand overseas. 

This event held on Friday December 10th at Banyan Tree Club & Spa Seoul Crystal Ballroom  showcased 7 innovative companies. Participating in the KSC program were Aon, Sentbe, Testworks , Grinergy, GEMotion, HiLocal and Dot. Each company presented an IR pitch through the online platform and were then screening  by VCs. 

The 1st place winner was ‘Grinergy’, which shared their  lithium secondary battery solutions that are capable of low-temperature and rapid charging. 

Sentbee, which introduced their “Digital C2C/B2B overseas remittance payment service’, was selected as the 2nd place. ‘TestWorks’, which introduced ‘Artificial Intelligence Algorithm and Data Solution Service for Learning’, was selected in 3rd place.

“Startups participating in today’s event are promising companies that have been recognized by accelerators from 7 countries around the world,” said Kim Yong-moon, president of the Korea Startup Promotion Agency. “In the future, the Korea Startup Promotion Agency will spare no effort to support K-start-ups to take a leap forward and advance into the global market.”

###

Grinergy Selected 1st Place in 2021 K-Startup Center Demo Day

Congratulations Grinergy on being selected 1st Place in the 2021 K-Startup Center Demo Day.

South Korea Grinergy

What a great honor.

축하합니다

Grinergy is a lithium-ion battery technology company with multiple solutions to revolutionize the shortcomings of the conventional lithium battery industry.

Hangul Day

hangul day

Saturday October 9 is a National Holiday in South Korea — Hangul Day. (As this year the holiday falls on weekend, Monday is celebrated a National Holiday, too).

Hangul Day commemorates the invention and proclamation of Hangul, the alphabet of the Korean language. This commentary will provide some insights into not only Korea, but their native written language. For a online version see https://seoulz.com/how-the-digitization-of-hangul-contributed-to-koreas-economic-rise/

The Digitization of Hangul, the Native Korean Language Script The Hidden Driver of Korea’s Economic Success

We often see terms like “Miracle on the Han,” that highlight South Korea’s economic rise after decades of harsh Japanese colonial rule and then the devastation of the Korean War.

With only determination and its people as resources, Korea became one of the world’s top industrial, export-driven economies. In particular, the main contributions to this success story include the nation’s emphasis on higher education, as well as the role of government and private investment in innovation, technology, and R&D.

Looking deeper, what may be missed is the impact of digitizing the native written language Hangul. Crafted in the mid 15th century during the reign of King Sejeong. Hangul linguistically is seen as a very logical and structured written language script.

Inspired by a vision to make Korea information independent

Jumping forward, it was in the early 1990s that a local Korean company, today’s Hancom, successfully developed a native word processing program for the Korean language.

As Hangul was created so that the common people could accurately and easily read and write the Korean language, so too, the word processing software allowed Koreans to communicate digitally.

Although the Hangul word processing software grew in popularity, by 1998, the company nearly went bust, even though it was considered a national treasure: the Asian Financial Crisis and software piracy had brought the company to its knees.

Rival Microsoft which had only about 15% market penetration in office software at the time in Korea, offered $20 million to Hancom to stop producing its software and instead resell Microsoft’s localized Word program.

For a small investment, Microsoft would have wiped out their main competitor in Korea, one of the few countries in the world that had still resisted wide adoption of Microsoft’s office suite.

When the news of the proposed deal offering surfaced, Koreans united in a national fervor and raised over $10 million through a campaign to save the company.

In addition, the company’s near-bankruptcy brought the issue of software piracy under the spotlight. As a result, Koreans began to pay for their software and more began to adopt and use the Hangul software in Korea.

An Economic Driver

With the rise of globalization, and Korea as a nation leapfrogging economically, experts attribute much of the growth to the streamlining of both government policy and regulations. This was possible with a universally accepted digitalized Hangul well suited to the E-Government transfer of information. E-Government refers to a government that uses technological communications devices, such as computers and the Internet, to provide public services in a country or region.

This has also given Korea a strong competitive advantage — data management critical in the digital age.

Looking forward, South Korea today is at the forefront of AI and Cloud-based technology. That said, one may argue that many under-developed nations, most with their own indigenous languages, too, could follow Korea’s digitalization model.

Globally, South Korea and Korean business are well-positioned to support this and similar endeavors — as the Korean proverb noted — A Rising Tide Lifts All Boats.

Similar Brings Us Together: Global Business 2021

I often say Similar bring us together

similar
Don Southerton

Global business requires colleagues of different cultures to work together on a daily basis.

How we see each other culturally is often in the differences, like language and in similarities such as shared values like family. I like to focus on the later; as differences can pull us apart and similarities brings us together.

Particularly for western teams engaged in all ways with Korean operations, I believe in the importance of deep learning about the workplace in Korea — the 2021 norms, practices, and day-to-day life. They do change and most often we can get fixed on what could have been tainted by here say — or an altogether lack of understanding.

The same learning goes for Korean global teams assigned to support overseas’ operations. They need to become learners — savvy in the wide range of local overseas practices. Expecting global teams to bend to Korean business norms rarely works, too. It just leads to delays and stalled projects.

As I note above, recognizing similarities is one of the most powerful cross-cultural bridges. In other words, how can you relate to the nuances in communications and day-to-day life. This requires identifying the local beliefs, values, expectations, traditions, and culture.

These insights allow us to better understand our mutual teams’ thoughts and expectations.

Outcomes

Although there is bound to be friction between home and host country cultural values, a successful model accomplishes:

1. Awareness and appreciation of both the home and host country with the ability to gain an insight into one’s own personal traits, strengths, weaknesses, attitudes, and interests.

2. Realization of shared values, along with an awareness of and respect for cultural differences.

Call to Action

So, how do you see this applying to you and your own experiences working with another culture’s teams? I’d like to know, so please share.

Dealing with better understanding Korea-facing issues, challenges, or impasses? I provide workarounds and solutions.

I look forward to your thoughts and comments, and with no COVID travel planned have set aside time to discuss one on one.

Always Private and Confidential. Please feel free to FB or Linkedin Message, Text or email to set up a Zoom time.

YouTube

Korean Lunar New Year 2021- Year of the OX

One popular Korean Lunar New Year tradition is 세배 (sebae), which is respect for elders and ancestors. In the ritual families often travel to the family graves to show their respect. 

Korean Lunar New Year 2021

Also common is younger people will bow to their grandparents. They then wish them a happy New Year by saying: sae hae bok mani badeu say yo (새해 복 많이 받으세요. ) Which translates as “Please receive good fortune for the New Year.”

In turn, the elders typically reward this gesture by giving children New Year’s money, or “pocket money” called Sebaet Don, usually new crisp paper money.  

To learn more, go this week’s post in YouTube