{"id":1188,"date":"2017-01-02T12:28:29","date_gmt":"2017-01-02T19:28:29","guid":{"rendered":"http:\/\/www.songdoibdcitytalk.com\/blog\/?p=1188"},"modified":"2017-01-11T12:31:59","modified_gmt":"2017-01-11T19:31:59","slug":"everything-korea-new-year-episode-gazing-back-look-forward","status":"publish","type":"post","link":"https:\/\/www.songdoibdcitytalk.com\/blog\/everything-korea-new-year-episode-gazing-back-look-forward\/","title":{"rendered":"Everything Korea, The New Year Episode: Gazing Back: A Look Forward"},"content":{"rendered":"<p><a href=\"http:\/\/www.songdoibdcitytalk.com\/blog\/wp-content\/uploads\/2017\/01\/gazing.jpeg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-1189 aligncenter\" src=\"http:\/\/www.songdoibdcitytalk.com\/blog\/wp-content\/uploads\/2017\/01\/gazing-300x249.jpeg\" alt=\"\" width=\"353\" height=\"293\" srcset=\"https:\/\/www.songdoibdcitytalk.com\/blog\/wp-content\/uploads\/2017\/01\/gazing-300x249.jpeg 300w, https:\/\/www.songdoibdcitytalk.com\/blog\/wp-content\/uploads\/2017\/01\/gazing-768x637.jpeg 768w, https:\/\/www.songdoibdcitytalk.com\/blog\/wp-content\/uploads\/2017\/01\/gazing-1024x849.jpeg 1024w, https:\/\/www.songdoibdcitytalk.com\/blog\/wp-content\/uploads\/2017\/01\/gazing.jpeg 1072w\" sizes=\"auto, (max-width: 353px) 100vw, 353px\" \/><\/a><\/p>\n<h2 style=\"text-align: center;\">2016 in retrospect. \u00a02017 before us.<\/h2>\n<p><iframe loading=\"lazy\" title=\"Everything Korea, The New Year Episode:\" width=\"530\" height=\"398\" src=\"https:\/\/www.youtube.com\/embed\/g4YARvQtkoQ?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>From a string of weekly trip<strong>s<\/strong> to OC\/ Irvine, California, home to the U.S. HQ offices of Hyundai Motor, Kia Motors, Genesis, MOBIS Parts, Innocean and Hyundai Capital, to somewhat longer trips to a Vegas Dealer Show, NY and LA Auto Shows, HATCI R&amp;D in Ann Arbor, KMMG and the Tier One\u2019s in Georgia and Hyundai in Canada and even longer treks to Seoul, in 2016 I supported leadership across the Korean OEMs and their affiliates.<\/p>\n<p>This said, it was a challenging year for both the western and Korean overseas teams. Bluntly, we all felt the frustration; the common thread&#8212;the need to hit steep sales targets. Layered on top was mounting anxiety from South Korea over a declining export economy and a weakening Won. Not to mention, the political scandals touched to the heart of Korean Groups\u2014their Chairman called into the National Assembly and probed if pressured to contribute monies in exchange for special presidential treatment.<\/p>\n<p>Sadly we also saw the abrupt exit of Hyundai Motor America\u2019s CEO Dave Zuchowski, our long time friend who we advised on all things Korea. Still we are honored to support so many in leadership who come to us for advice and perspective\u2014a role we take with utmost seriousness and hold in deep confidentially.<\/p>\n<p>With 2016 also came new clients and a range of projects, among these working on the PyeongChang Winter Olympics. \u00a0Equally appreciated were the opportunities to share my thoughts and perspective to a wide audience including groups like KOTRA NYC, and in media&#8211; <a href=\"http:\/\/brandinginasia.com\/\" target=\"_blank\" rel=\"nofollow noopener\">Branding In Asia<\/a> who both highlighted work in an interview as well as published a number of commentaries.<\/p>\n<h3>So what\u2019s before us in 2017\u2026Trump, the Korean Presidential Election and Succession?<\/h3>\n<p>\u201cTrump?\u201d\u2014a name and an uncertainty that surfaces often. I constantly field questions from both Korean and American business leadership on the impact of the election and the new administration. Who would know I would be asked to speak in December about Trump to 45 Korea executives. \u00a0I also find it interesting that diverse Trump scenarios tied to possible renegotiation of the North American Free Trade Accord by the new administration were mulled at the Hyundai Motor global strategy summit in Seoul.<\/p>\n<p>Looking forward, trade agreements, US military support for South Korea and dealing with North Korea\u2019s nuclear buildup still top the list. On the trade agreement front, my expectation is at some time during the next year it will be looked at deeper by the Trump administration. However, until there is a South Korean president in office, with the impeachment waiting to be upheld by the Courts, we\u2019ll see no Trump-Korean President summit to drill deeper.<\/p>\n<h3>Korea\u2019s Presidential Election 2017<\/h3>\n<p>What I will be probing for is the \u201ctone\u201d of presidential hopefuls\u20142017 an election year in South Korea. \u00a0One candidate, for example, is already demanding the Chaebol model be dismantled.<\/p>\n<p>In particular, my thoughts were summed up in <a href=\"http:\/\/www.forbes.com\/sites\/frankahrens\/2016\/12\/20\/thanksdonald-five-major-disruptions-ahead-for-asia-in-2017\/#2a22f41f6a19\" target=\"_blank\" rel=\"nofollow noopener\">Forbes<\/a>, a timely December Frank Ahrens\u2019 article remarking it was likely an incoming Korean president could <em>ride into office on a wave of populist anger directed at the nation\u2019s elites. Still, says veteran South Korea business consultant <\/em><a href=\"http:\/\/www.bridgingculture.com\/\" target=\"_blank\" rel=\"nofollow noopener\"><em>Don Southerton<\/em><\/a><em>, \u201ca new administration will need chaebol support to drive the economy and jobs or quickly lose public support.\u201d<\/em><\/p>\n<p>I\u2019d add we have experienced decades of \u201clove-hate\u201d between the Korean Groups and the government. One minute mandating new rounds of regulations such as restrictions on mutual investments and loan guarantees to curtail chaebols\u2014the next minute persuading chaebol leadership to spur growth. The reality is Group support by Samsung, Hyundai, LG, Lotte and SK is needed to create jobs, invest in R&amp;D and support an incoming president&#8217;s initiatives to grow the economy.<\/p>\n<p>Less likely considering the emergence of a more cynical generation that may threaten to upend an old system, nevertheless seeing disruptive politics emerging globally, we could even a new president promising change but openly allied with the chaebol as engines of growth. \u00a0We\u2019ll have to wait and see. \u00a0That said, at least in the short run post-scandal I see Groups coming under pressure in laws and regulations designed to increase financial transparency and accountability of family members.<\/p>\n<h3>Finally the Succession issue\u2026<\/h3>\n<p>What stood out at the recent National Assembly grilling of the top chaebol Chairman, many men in their late 70s, was the targeting of now defacto head of Samsung, who has assumed his father\u2019s role. With the mantle of Samsung now handed to the third generation of the Lee family, we may see similar at Hyundai and the other top Groups. \u00a0In fact, South Korea\u2019s textile giant Hyosung just announced with year-end the ushering in the era of the group\u2019s third-generation management. \u00a0I expect more announcements in the weeks to come\u2026<\/p>\n<p>What will this new generation bring forth? For one, Samsung\u2019s successor Jay Y Lee has promised to abolish the conglomerate&#8217;s \u201ccontrol tower\u201d the Future Strategy Office in response to criticism about the office&#8217;s role in the group-wide business command and control operations. No major decisions such as acquisitions or entering new businesses without the FSO\u2019s scrutiny. \u00a0\u00a0On a side note, Hyundai Motor Group is one of the few groups that doesn\u2019t operate a de facto control tower. Unlike more diversified chaebol, Hyundai core business is automotive with its affiliates already aligned in supporting a common interest.<\/p>\n<p>As for succession at Korea\u2019s second largest conglomerate, Hyundai Motor Group\u2019s heir E.S. Chung continues to take a more visible leadership role. For example, E.S. Chung has sought to break away from the old model of a strictly Korean leadership team to more diverse international team as part of his strategy to better position their brand. More recently he re-structured the annual year-end global strategy meeting of 50 Hyundai and Kia Motors Korean executives from their overseas branches. What stood out was the collaborative, open discussion based structure of the summit vs. an older conservative and hierarchical format in which the head of each overseas branch would give a one-way briefing to the Chairman.<\/p>\n<p>We can assume E.S. Chung will continue to follow his design-loving passion, and consensus-building management style in 2017.<\/p>\n<h3>Summing up<\/h3>\n<p>2017 may be seen as a year of uncertainties\u2014both domestically in Korea and internationally with the potential for a weakening global economy, more disruptive politics and tightening of budgets and spending. \u00a0The later is concerning since cutbacks would only hamper sales in what may be a tough market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>2016 in retrospect. \u00a02017 before us. From a string of weekly trips to OC\/ Irvine, California, home to the U.S. HQ offices of Hyundai Motor, Kia Motors, Genesis, MOBIS Parts,<\/p>\n","protected":false},"author":16802,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[213],"tags":[108,19,163,161,168,171],"class_list":["post-1188","post","type-post","status-publish","format-standard","hentry","category-commentary","tag-bridging-culture-worldwide","tag-don-southerton","tag-donald-g-southerton","tag-korea-consulting","tag-korea-facing","tag-korea-facing-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Everything Korea, The New Year Episode: Gazing Back: A Look Forward - Bridging Culture Worldwide<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.songdoibdcitytalk.com\/blog\/everything-korea-new-year-episode-gazing-back-look-forward\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Everything Korea, The New Year Episode: Gazing Back: A Look Forward - Bridging Culture Worldwide\" \/>\n<meta property=\"og:description\" content=\"2016 in retrospect. \u00a02017 before us. 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