Seoul Man: A Memoir of Cars, Culture, Crisis, and Unexpected Hilarity Inside a Korean Corporate Titan (11 page)

Lily rode around with us on base in our Hyundai, sitting or lying happily in the backseat. She became well known to the young Korean women who worked at the drive-through window at the Burger King. To the young ladies who worked there, Lily was beautiful and exotic—a Korean
jindo gae
owned by Americans. And maybe a signal that the
waygookin
were trying to fit into their new country.

So it quickly came to pass that, two months after arriving in Seoul, Rebekah and I spent our first Christmas as a married couple on a U.S. military base in East Asia, 10,000 miles from our friends and family. We found a very good English-speaking, Bible-teaching church near the base that turned out to be the most multicultural place we frequented in Seoul: Americans were joined in worship with Koreans, Indians, Africans of many nations, and representatives of several other nationalities. If you survey Koreans, you’ll find about one-quarter identify as Christian, another one-quarter as Buddhist, and the rest as “none.” An ancient shamanistic tradition that focuses on luck still runs through the culture, as it does elsewhere in Asia. Many minimize its role in modern Korea, but not a few expectant mothers still consult fortune-tellers to determine “lucky” birth dates for their unborn children and schedule cesareans accordingly. I knew one young Korean man who, following two accidents as a small child, was taken by his father to a fortune-teller who gave the boy a new, “luckier” name.

Rebekah and I sent a photo Christmas card of us and Lily posing in front of the fireplace in our home. You don’t have to look very closely to see that my smile has the hint of a struggle to it. It took all my effort to restrain Lily in one position for the one-sixtieth of a second required to take the photo.

We hosted our first Christmas party at our house. We were able to buy a seven-foot live Christmas tree from the Boy Scout troop organized on the base, another nice reminder of home. In typical American style, we invited friends from different spheres of our lives. I invited my Korean team and a fellow Korean executive from Hyundai who had befriended me. Rebekah invited American and Korean embassy staff she worked with. We invited people from our church.

We set out a serve-yourself buffet. Koreans call this a “standing
party” to differentiate it from a dinner party. The first sign I knew something was a bit off was when the senior Korean women on my team—professional, accomplished women—prepared a plate of food for the Korean executive in attendance. My team leader got him his drink. I was a little offended by it, especially the American feminist in me. I wanted to say, “You don’t have to serve him. This is a party. We’re not at work; everyone’s the same.” But I didn’t. Confucianism doesn’t take days off. Even if you’re not at work, your boss is still deserving of your service and respect.

The second tip-off was that none of my team members brought spouses or dates. As far as they were concerned, this was a work party at an executive’s house.

If it weren’t obvious by their actions, I came to understand that the Koreans were not comfortable at this kind of a party. Almost no one on my team mixed with any of the other guests.

I turned to a more senior member of my team who, like Eduardo, patiently fielded my relentless and frustrated questions about his culture, and asked him what was going on. “Sir,” he said, “we don’t go to parties where we don’t know everyone.”

I told him that an American party is considered a success if strangers meet and strike up friendships or other relationships. He explained that most Koreans make their friends for life in school; Korean colleagues I knew even attended grade-school reunions. Sometimes Koreans made friends early on in their workplace, he said, but not always.

“But how do you make friends as an adult?” I asked him.

“We don’t, sir,” he said.

This was also Lily’s first party. We let her mix with the guests for a little while, but it made some people uncomfortable. So we parked Lily in a bedroom. Which was fine until we heard a scratching sound. We went to the bedroom and found Lily chewing at the door, trying to get out where the people were.

Ike, my KATUSA team member, loved dogs and volunteered to stay in the bedroom with Lily and occupy her while everyone else enjoyed the party.

He stayed with her for more than an hour until Ben, my team leader, determined the team had put in a dutifully long enough appearance, and they all left. I came to understand: the Korean sitting alone in the bedroom with the wild dog had more fun than any other Korean at the party.

5

DETROIT: SHOWTIME

It was a bitingly cold early morning in Detroit in January 2011. The wind drove wispy snow devils across the empty suburban parking lot outside my hotel as the gray sky brightened. I watched the icy show for a bit, silently repeating parts of a speech in my head, and then got back to dressing for the day. On the television in my room, a reporter was speaking from the floor of the Cobo Center, the vast convention hall in downtown Detroit. Already, a flurry of activity had commenced behind and around the reporter as workers finished setting up for the biggest, most important motor show in America.

This was the stage Hyundai chose to launch its transformation from auto industry joke only ten years earlier to premium brand. It would happen today, in a speech by Hyundai’s vice chairman, son of the chairman and grandson of Hyundai’s founder. In many ways Detroit was the first big step on Hyundai’s uphill climb. Success or failure here would be the first signpost in
the company’s quest to change the way people thought about it. The environment could not have been more unforgiving and the stakes could not have been higher. The dream was that Hyundai’s less expensive cars would rival those of Volkswagen and that its most expensive cars would compete against BMW, Audi, and Mercedes-Benz. This was a daredevil stunt and would be hard to pull off—like, say, a caveman discovering fire on a Monday and inventing the wheel on the following Thursday.

But it was no more audacious an achievement than what Hyundai, and Korea, had already pulled off.

After an armistice was signed in 1953, ending the fighting in the Korean War, South Korea was one of the poorest nations on earth. Indeed, until 1974, Stalinist North Korea, propped up by the communist regimes of China and the Soviet Union, was a richer country, impossible as that seems now. Just as bad, South Korea was a political mess as the people starved and the nation languished.

In 1961, Major General Park Chung-hee, director general of army operations, had seen enough and took power in a military coup. He ruled as dictator until he was assassinated by his own head of intelligence in 1979. (It’s easy to forget that democracy didn’t come to South Korea until 1987.) Chung was the builder of modern Korea and opinion is still deeply divided about him. On the one hand, Korea’s prosperity today is largely owing to the policies he put in place. On the other hand, Park was a dictator who rewrote the constitution to declare himself president for life and tortured political opponents. Pretty much all you need to know about the character of Park Chung-hee can be learned from this amazing story: in 1974 he was giving a speech in Seoul when a Japanese-born North Korean sympathizer burst into the hall firing a gun, trying to kill the president. He missed Park but shot Park’s wife. After the gunman was subdued and Park’s injured
wife was carried from the stage, Park resumed his speech. When he finished, he picked up his wife’s shoes and purse and left. His wife died the next morning.

It is impossible to overstate the dire condition of South Korea when Park Chung-hee took over the government in 1961. A year earlier the South Korean annual mean income per person was $155, slightly higher than Sierra Leone’s and substantially less than Zambia’s. More than 11 percent of the entire population of what would become South Korea was killed during the Korean War. Half of all South Korean housing and 80 percent of public buildings and infrastructure had been destroyed, according to U.S. military estimates. The uncontrolled Han River flooded periodically, killing and displacing war survivors; other refugees who returned to Seoul after the armistice to find their houses destroyed joined others to build shantytowns, called “moon villages,” on Seoul’s mountains. Unclean sanitary conditions led to widespread disease and further deaths. Photos from that time show Seoulites, wearing impossibly large Asian conical hats—the diameter of an umbrella—trying to scratch sustenance from the earth and the Han.

Park Chung-hee realized South Korea had few natural resources; most are in the North. What it had was manpower and an adherence to Confucian ideology. When combined, they provided labor and the required motivational and organizational might. Park had 25 million Koreans dedicated to marching relentlessly and around the clock toward one destination: making South Korea a strong country. Park called them his industrial soldiers. They could make things.

Park decreed that South Korea would grow by manufacture and export. First, by manufacturing things the unskilled labor could master, like textiles. Then bigger and more value-rich items. Shortly after he took over, Park exported coal miners and nurses
to labor-starved Germany for work; possibly in return, Park got a regime-sustaining loan from Germany.

South Korean economic and governmental prosperity would go hand in hand. The banks did the government’s bidding. As it was explained by a Korean friend, “In the old days, if you wanted to start a fertilizer company, you did not go to the bank to get a loan. You went to the president to make your case. If he decided yes, he would call a bank and order them to loan you money.”

This was a climate of enormous opportunity for industrious young men like Chung Ju-yung, who started an auto repair shop in Seoul in 1940, under Japanese colonial occupation. The story goes that Chung would con the Japanese occupiers by telling them they needed new parts for their cars. He’d then take off the old, fully functioning parts, shine them up, put them back on, and charge the Japanese for new parts.

Chung took his earnings from the repair shop and, after liberation from the Japanese, set up the Hyundai Group in 1946, which started life as a construction company, winning government contracts to rebuild Korea in the wake of the war. During the Korean War, Chung was forced to leave Seoul for the southern city of Busan and picked up what work he could from the United Nations forces fighting the North Korean invasion. The war left Seoul and much of the South an impoverished smoking ruin. But that, and generous foreign aid and loans apportioned by South Korea’s new government, provided Chung with his opportunity of a lifetime. He rebooted Hyundai (which means “modern” in Korean) and built dams, the country’s first major highway, and the world’s largest shipyard. He won a contract to build his first ship before he had ever built a ship or indeed a shipyard. He built them both simultaneously and delivered the ship two years early. It was a project of enormous chutzpah and Pharaonic use of human capital and it became the template for the Hyundai that would follow.

Chung and other nation builders—Lee Byung-chull, who started Samsung, and Koo In-hwoi, who launched LG Electronics, originally Lucky-Goldstar—were the Carnegies, Rockefellers, and Vanderbilts of modern Korea. These companies continue to control sectors of Korea’s economy in similar proportion to what America’s Gilded Age oligarchs did in their day.

The Korean plutocrats built their businesses in the same way: assembling massive “groups” of frequently unrelated companies, always with a goal of getting bigger. This was partly to one-up their nearest rival, but it was also because the government would concentrate its economic incentives and direct low-interest loans at the country’s biggest companies in a policy of creating national champions. Focusing on total revenue rather than profit, the
chaebol
piled up debt with easy loans to buy or create company after company. The empire would be passed down from father to son in Confucian fashion.

Chung Ju-yung built the Hyundai Group on ten core values. Number ten is: “Serve our nation and society.”

By 1967 the greater Hyundai Group was made up of affiliate companies that built ships, dams and bridges, nuclear plants, and elevators and provided numerous other sundry products and services. That year it added an automaker to the
chaebol
, founding Hyundai Motor Company. For the first seven years of its life, Hyundai Motor built cars for other automakers; for instance, Hyundai Motor assembled the Ford Cortina, which was sold inside and outside Korea.

In 1974, with help from British manufacturing experts, an Italian designer, and a Japanese engine, Hyundai launched Korea’s first car of its own, the little Pony hatchback. Over the next thirty years, Hyundai became the dominant carmaker in Korea, owning almost the entire market, thanks to government protectionism. Up until that point, Hyundai showed little interest in building its cars anywhere but Korea.

Flash-forward to the 1997 Asian monetary crisis, which began in Thailand and spread across Asia. It hit Korea hard. The debt-laden
chaebol
—their clustered affiliates dependent on one another for cash flow and saddled with high-interest, short-term foreign loans—fell like dominoes. Twenty percent of the
chaebol
collapsed. One of the Korean businesses felled by the crisis was Kia, at the time an independent automaker. This gave an opportunistic Hyundai the chance to buy Kia out of bankruptcy and instantly capture a near monopoly of the Korean auto market.

During the 1997 crisis, ordinary Koreans tried to help their government out of trouble in ways that seem inconceivable in industrialized nations in the late twentieth century. Thousands gave the government their gold jewelry. To greater effect came a bailout from the International Monetary Fund. The IMF and a liberal Korean government agreed that the
chaebol
were too big, had too much debt, and must be broken up.

By 1999 the Hyundai Group had split into three smaller conglomerates: Hyundai Motor Group, along with its auto-affiliated businesses; Hyundai Heavy, the ship builder; and a smaller Hyundai Group, which got the construction company and other catch-all businesses. Split in one sense, but not all: each of the three smaller
chaebol
, and other family businesses, would go to one of the six surviving sons of Hyundai founder Chung Ju-yung.