Hyundai Part 1: Chung Ju-yung, The Founder

**Caemin** (0:10)
Morning, folks, and welcome to today's episode called Hyundai Part 1, Chung Ju-yung, The Founder. And initially, I'd intended to do just one episode on Hyundai, focusing on the car business and its current leadership. But the story of Ju-yung, it's just too remarkable to be, I suppose, consigned to a footnote, because this is a guy who, from nothing, built a conglomerate that at its peak in the 90s was one of the biggest companies in the world, with revenues of $90 billion, 200,000 employees, operating in everything from semiconductors to cars to shipbuilding, to construction, to retail outlets. Like, you name it, they did it. And Ju-yung built it all through military rulers, through wars. This is a cracking story. Enjoy.
So Chung Ju-yung was born in 1915 in a small farming village in what's now part of North Korea, and it was under Japanese colonial rule at that time. And his father was a subsistence farmer. And as the eldest son, Ju-yung was expected to stay and farm, but he had no interest in being a farmer. He ran away four times between the ages of 16 and 19
One time, he secretly sold his father's prize bull and used the money to buy a train ticket to Seoul.
He got work on the building sites, but each time his father came and dragged him back to the farm, except for the fourth time in 1934 And this time he got a job in Seoul as a delivery boy in a rice store. And within six months, he completely reorganized the business. So when the owner's health began to fail, and because his own son was a gambling addict, the owner handed the entire business to Ju-yung on credit. This was 1938, and Ju-yung was only 22 years old. Within a year, the business, it was doing so well that he was able to pay the owner everything he owed him. But then, in December 1939, it was all taken from him, literally overnight. Because this is when Japan imposed laws that diverted all agricultural surplus towards their war effort. So, with no rice to sell, Ju-yung's company had to close. No compensation.
And with what savings he had, he then set up an automotive repair business. This was a growing sector. It didn't need a huge amount of money to get into it. And he'd be servicing Japanese military vehicles. So he thought it would give him some protection from the state interventions that had killed the rice business.
Now, garages in Seoul at that time, they usually took about 10 days to complete a standard vehicle overhaul. Ju-yung's business did it in three days, and he charged a premium for the speed. His business took off. Soon he had about 70 mechanics working for him. But then, in 1943, at the height of the Pacific War, the Japanese administration took his business for the second time. His operation was folded into a Japanese steel plant as part of the wartime consolidation program, leaving him again without a company. But he did walk away with 50,000 yen in savings. That's the equivalent of about $11,000 at that time, which was a significant sum in Korea for then.
Now, also at this time, the Japanese military, they were conscripting Korean workers into forced labor. So Ju-yung, he needed something that would not only protect his money, but also keep his core team of mechanics out of these labor drafts.
So he negotiated a subcontracting deal with a Japanese mining company to handle ore transportation. And then he bought a fleece of heavy duty cargo trucks and he relocated his entire mechanical team to the mine site. However, by early 1945, Ju-yung, he could see that Japan were going to lose the war. So he sold his subcontracting rights and the truck fleet back to the parent company, getting back most of his 50,000 yen. And the timing was pretty perfect because three months later, Japan surrendered and Ju-yung was lucky to have gotten himself and his workers out when he did, because the Soviets were the first to enter the province where the mine was located. And they sent all of the staff and management from the mine to those dreaded gulags in Siberia. And this is where they were forced to work 12 hour days of backbreaking physical labour on starvation rations of bread and thin soup. Many died. So a lucky break. Now Ju-yung, he returned to Seoul. The South was now under US military administration and the economy was in chaos. There was huge inflation, massive infrastructure damage. Japanese capital and expertise had gone over night. But of course, that vacuum was also an opportunity because land and assets that had been owned by the Japanese were now being sold off by the Americans at very, very good rates. So Ju-yung bought a plot of land, opened up another automotive business, this one called Hyundai Auto Service. It was a vehicle repair shop servicing US military trucks and equipment. And the name Hyundai, it means the modern age or modernity.