Short 2-minute video on Global Collaboration: an early stage cultural savvy approach. Timely as so many JVs, MOUs
Questions? Comments? Inquiries?
mailto: dsoutherton@bridgingculture.com
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Tag Archive for Hyundai Motor
Global Collaboration: an cultural approach
Quick Assumptions
It’s easy for those new to Korea business to make quick assumptions. I often have to remind myself lessons learned, too. Over time those engaged in projects find there are complexities often rooted deep within in the culture — requiring context, recent and past. This is a normal learning process.
As an example, I’ve also found it very valuable over the years to work with a number of Korean Groups, and the affiliates companies. (I define an affiliate is one of the many family controlled subsidiaries that chaebol typically operate across diverse industries. These can include in-house IT, Marketing, Construction, Design, Sales, and Financing.)
What stands out is how the Culture vary between the Korean Groups — and even within a Group and it affiliates. Perhaps moving among Groups and affiliates sometimes in a single day, I see and experience the subtle differences more than most. This can range from the tangibles like building design, workspace layout, dress code and amenities to intangibles such as what one can sense in day to day employee engagement, morale and openness to new ideas. In other words, the working of one Korean company or agency can differ lots from another.
In particular, there are even Culture differences, such as; 1) in Korea between the domestic HQ and their own local affiliates; and 2), in Korea, between the domestic teams and their own in-house overseas divisions; and 3) between the HQ operations in Korea and the company’s overseas affiliates.
Digging deeper, I feel recognizing what is common between the companies’ counts, too. This can include intrinsic Group values and norms shared across the organization, or even more common general Korean business practices and expectations.
This all means when a Korea related issue surfaces we have to look at with several colored lenses. Candidly, that’s how I pull apart situations, provide context, and a solid work-through when supporting clients as a mentor and their Korea business strategist. Again, watch out for quick assumptions.
Here as always… Don
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Globalization and Trustworthy Management
Each weekend I turn my thought to sharing topics on Korea business. This week it’s my article on Globalization and Trustworthy Management from Korea Herald titled:
‘The Tall Man’ and the Globalization of Hyundai Construction
Hotel Architect Bill Swank opens Chaebol to West through Trustworthy Management
Bill Swank The Tall Man
Bill was the first westerner hired by the Hyundai Group.
The story was written in 2013, but still timely.
Bill passed away in February 2014. It was an honor to know him. Bill was a huge advocate for my work.
Bill was the first westerner hired by the Hyundai Group.
Article Link
Hyundai Motor Group Chaebol Reform
As a follow up to news on Hyundai Motor Group chaebol reform, we are seeing some interesting developments. First Samsung is one of the few Groups yet to reform their shareholder structure. That said, I feel they will adopt one similar to Hyundai’s recent plan– a hybrid from the traditional Korean Holding Corp. model.
For starters and some clarity regarding the spin-off and merger within the Hyundai Motor Group Chaebol reform, Hyundai MOBIS, the new de facto holding company still plans to further beef up its core auto parts business.
That said, operations for both domestic Korea modular and A/S parts will move over to GLOVIS as announced—overseas operations will remain under MOBIS.
In particular, MOBIS as the Group’s nerve center will focus more on R&D, and investing in future growth drivers like autonomous vehicles and connected cars.
Next… and getting lots of media coverage and in my opinion nothing that radical.
On Wednesday, Elliott Advisors, a hedge fund sponsor subsidiary of the U.S. fund, called on Hyundai Motor Group to step up its efforts to overhaul its governance structure after announcing it had acquired more than US$1 billion (1.05 trillion won) worth of stocks in three key affiliates of the Korean automotive group.
“While this step is encouraging, more needs to be done to benefit the companies and stakeholders,” Elliott said in a statement.
The hedge fund sponsor also called for a detailed roadmap to further enhance the Korean auto giant’s corporate governance, optimize balance sheets, and enhance capital returns at Hyundai affiliates.
Elliott Advisors said in the statement it looks forward to engaging with management and other shareholders directly on these issues and offering recommendations regarding the proposed plan.
In response, Hyundai said it will make continued efforts to enhance shareholder value and the worth of its affiliates while focusing on better communicating with shareholders.
I’ve also seen HMC sources note they plan to meet with Elliot teams during an upcoming investor event.
Again foreign investment in Korean publically held companies is nothing new.
For example, HMC’s total foreign ownership is about 46% of the Common Stock. Kia is at about 38%.
Elliott Advisors is estimated to own only a combined 1.4 percent stake in Hyundai Motor, Kia Motors and Hyundai MOBIS.
One more thing…
Did you have an opportunity to review my detailed 5 Page Report on Hyundai Motor Group Chaebol reform…. If not I please contact me… as has been very well received.
I’m also available to comment and answer questions as always…
DS
Weekend Read 5: The Hyundai Advantage
Don Southerton Hyundai Expert
I’d like to share the story behind what has become a cornerstone for Hyundai and Kia Motors.
Please enjoy this weekend’s read, “The Hyundai Advantage, Creative Marketing and America’s Best Warranty—The Story Behind”
“A bold creative marketing ’10-year / 100,000-mile Warranty’ program was first introduced in the U.S. in 1998…not by Detroit’s Big 3 or the growing number of Japanese brands, but by Korean automaker Hyundai Motor.”
Here is the LINK http://www.bridgingculture.com/assets/advantage1998.pdf
In my trip to SoCal this week, and KMA, HMA, GMA, MPA and HCA, many were asking about previous Weekend Read 1-4. No problem, go to: Case Studies
http://www.bridgingculture.com/what-we-do.html
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New For 2014: Strategic Services
A Note from Don Southerton
While my services have been well received and highly valued over the past decade, in 2013, I began shifting focus from training programs and coaching leadership to a deeper role with a few select clients.
In other words, rather than standing outside the organization and giving advice, counsel and perspective, I actively facilitated and supervised projects that addressed the companies’ pressing needs. This approach, built upon my understanding the nuances of Korean-based business and their companies, has proven to be extremely successful for my clients.
This new role was driven from ten years’ of listening to teams and leadership share (and, at times, vent) challenges. Frankly, after listening to this dialogue, I felt that this expanded value-added approach—one clearly within my skill sets —would serve my clients well.
As we begin 2014, I look forward to supporting you and would like to discuss how this new service can help you meet your firm’s strategic challenges.
Dsoutherton@bridgingculture.com
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Korea First Mover in COVID Recovery
South Korea: A Roadmap to COVID-19 Economic Recovery — Industry and Automotive First Mover
Apr 27, 2020
In this second segment COVID-19 recovery series, following up on the first, we look at how Korea as a first mover could be a model for best practices in maintaining the industrial workforce and preserving jobs.
Like most of the world, government intervention is the cornerstone of South Korea’s recovery. South Korean President Moon Jae-in has announced a massive relief package worth billions for South Korea’s key industries disrupted by the coronavirus pandemic.
Preventing layoffs and creating jobs have become the top priorities for the government.
The funds are meant to help them weather the crisis, which the Korean president characterized as the worst since the 1997 IMF financial meltdown, and to help maintain employment. Moon also unveiled an additional job protection program to cushion the COVID-19 impact on the country’s overall job market. This includes new job creation in the digital sector.
Drilling Deeper
A significant portion of Korea’s economy and the backbone of the country’s employment is from export-driven sectors, especially in hard-hit key industries that include aviation, oil refinery, shipping, shipbuilding, and car production.
Noting the huge task for Korea amid global downturns with much of the country’s employment driven by export-driven sectors such as automotive, how Korea preserves its workforce and jobs will take considerable effort and savvy.
As in past crises, senior government officials recently met with a group of top chaebol executives. The participants included Samsung Electronics, Hyundai Motors, SK Holdings, LG Corporation, and Lotte Corporation. Although closed-door meetings, they seemed to have centered strongly on persuading the leading employers to maintain employment in the face of coronavirus-related challenges.
The Auto Sector
In a separate round of talks, senior officials from five local automakers and nine auto parts manufacturers met with the Ministry of Trade, Industry, and Energy.
The five domestic automakers, Hyundai Motor, Kia Motors, GM Korea, Ssangyong, and Renault-Samsung account for 150,000 jobs in Korea. Within their supply chain, their roughly 8,850 partner companies employ 240,000 workers.
An upswing in local sales is welcome news considering Hyundai, Kia, and the other automakers have weathered many challenges over the past few months.
According to the Korea Automobile Manufacturers Association, the auto industry officials said they need a total of $34 billion to maintain their workforces, operate facilities, and keep up with fixed costs for the next three months. With $10 billion already secured, the local automobile industry asked the government to provide $26 billion in emergency loans to save automakers and associated companies struggling from the impact of the coronavirus pandemic.
Automakers also requested tax cuts to overcome the pandemic’s negative impacts on sales and production.
As a condition for the funding, the government pressed the automakers to maintain their employment numbers. To make up for overseas losses and boost domestic sales, the government will also expedite the order of 8,700 EVs and make an advance payment of up to 70 percent.
Strong Local Demand
Still, we are seeing strong demand in Korea’s domestic auto market. As COVID-19 cases have been dropping without mandating drastic measures such as a nationwide stay at home and remote work, Korean customers are again venturing back into auto showrooms.
Hyundai’s domestic sales in March hit their highest level in more than four years, up 80% from February 2020. Much of this was driven by attractive discounts and installment payment plans, as well as a cut in consumption tax. Hyundai also noted robust local pre-orders for new models like the Elantra and Genesis G80.
An upswing in local sales is welcome news considering Hyundai, Kia, and the other automakers have weathered many challenges over the past few months.
In February, Hyundai and Kia had to suspended operations — hamstrung by a lack of Chinese sourced parts with the coronavirus outbreak crippling China’s industrial output. As COVID-19 peaked in Korea some plants also closed briefly as a safety precaution.
More pressing, although local sales are a cushion, little has prepared the automakers for the drop-in demand overseas and the unexpected halt in their global production facilities.
Although domestic production in March was at 95%, with the slump in global sales and demand taking hold, we are beginning to see Korea’s production, too, take drastic moves. For example, Hyundai halted production for 4 days of the sport utility vehicles Palisade, Tucson, Santa Fe, and Genesis GV80.
Sister firm Kia Motors, too, is looking to suspend 4 of their Korean plants with a mix of closures to keep inventory levels manageable and stay flexible to overseas demands.
As an additional countermeasure, Hyundai Motor and Kia Motors have decided to halt all their domestic factory lines from May 1 for Korea’s Labor Day to May 5 for the nation’s Children’s Day — both public holidays. Korea’s other car brands and related industries are mulling similar moves, too. Some suppliers are now considering extended shutdowns into mid-May.
Preserving the Workforce
Noting the huge task for Korea amid global downturns with much of the country’s employment driven by export-driven sectors such as automotive, how Korea preserves its workforce and jobs will take considerable effort and savvy. It will be a difficult balance between mitigating business losses while holding on to jobs.
For one, as Korean groups have shifted manufacturing overseas, the lesson from COVID-19 is to have a less concentrated supplier and production base which ultimately means spreading things around. This does not, however, help Korean employment.
Next, government funding is but a part of the solution, more so may be an agile and scalable production model — one that can grapple with and carry on through the unforeseen and disruptive times. Again, countermeasures need to be in place as new situations unfold.
With unemployment spiking globally, the lessons learned if Korea as a first mover can successfully maintain their workforce in the wake of the crisis will be of the greatest interest as regions and nations emerge from COVID-19 — many facing the same tough challenges.
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As always here for your comments, thoughts and questions. Open to interviews, webinars and new business opportunities.
Don