Initially I had intended to do just one episode on Hyundai, focusing mainly on the car business and its current leadership, but the story of Ju-yung is just too remarkable to be consigned to a footnote. 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. You name it, they did it. And Ju-yung built it all through wars and military rulers. It's a cracking story — enjoy.
Chung Ju-yung was born in 1915 in a small farming village in what is now part of North Korea. It was under Japanese colonial rule at the time. 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 left 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 and get work on the building sites. But each time his father came and dragged him back — except for the fourth time, in 1934.
He got a job as a delivery boy at a rice store in Seoul.
Within six months he'd 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 operation to Ju-yung on credit. This was 1938. Ju-yung was twenty-two years old. Within a year the business was doing so well that he was able to pay the owner what he owed.
But then in December 1939 it was all taken from him — literally overnight — when Japan imposed laws that diverted all agricultural surplus toward Japan's war effort. With no rice to sell, Ju-yung's company had to close. No compensation.
With what savings he had, Ju-yung set up an automotive repair business. It was a growing sector, didn't need a huge amount of money to get into, and he'd be servicing Japanese military vehicles, which he thought would give it some protection from the state interventions that had killed the rice business.
Garages in Seoul at the time took ten days to complete a standard vehicle overhaul. Ju-yung's shop did it in three, and charged a premium for the speed. His business took off and soon he had 70 mechanics working for him.
Then in 1943, at the height of the Pacific War, the Japanese administration took his business for a second time. His operation was folded into a Japanese steel plant as part of a wartime consolidation programme, leaving him without a company once again.
But he walked away with 50,000 yen in savings — the equivalent of about $11,000 — a significant sum in Korea back then.
At this time, the Japanese military was conscripting Korean workers into forced labor. Ju-yung needed something that would protect his money and 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, bought a fleet of heavy-duty cargo trucks, and relocated his entire mechanical team to the mine site.
However, by early 1945 Ju-yung could see that Japan was going to lose the war, so he sold his subcontracting rights and the truck fleet back to the parent company, recovering most of his 50,000 yen.
It was perfect timing, because three months later Japan surrendered. 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 immediately sent all staff and management from the mine to the dreaded Gulags in Siberia, where they were forced to perform 12-hour days of backbreaking physical labor on starvation rations of basic bread and thin soup. Many died, and the last of them weren't repatriated until 1956.
Ju-yung returned to Seoul. The south was under U.S. military administration and the economy was in chaos — rapid inflation, massive infrastructure damage, Japanese capital and expertise gone overnight. But 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 good rates.
So Ju-yung bought a plot of land and opened the Hyundai Auto Service, a vehicle repair shop servicing U.S. military trucks and equipment. The name Hyundai means "the modern age," or modernity.
But Ju-yung was always on the lookout for new opportunities, and as a result of the war damage, the U.S. military was issuing contracts for civil works — road repair, building construction. These contracts were worth far more than he was making in his auto repair business.
So in May 1947, he founded the Hyundai Civil Works Company with his younger brother In-yung. Now, In-yung spoke fluent English. He managed to get a job as a translator with the Engineering division of the U.S. Army.
That meant he knew about upcoming military construction tenders before they were publicly announced. He negotiated directly with U.S. officers. So Hyundai Civil Works became a preferred contractor.
On June 25, 1950, North Korean forces invaded the south. Seoul fell within three days. Ju-yung, his brother, and his core technical team fled south to Busan, and the company was able to continue operating successfully for the three years of the war because the U.S. military continued to use Hyundai to build barracks, airstrips, warehouses, and pontoon bridges.
With the end of the war in 1953, Hyundai was hired for the reconstruction, and I think the following two stories from around this time best demonstrate how Ju-yung operated and how he managed to solidify his position as the go-to industrialist in South Korea.
The first story is from 1952, when President-elect Eisenhower visited Korea in December to inspect the front lines.
As part of this historic visit, the U.S. military wanted Eisenhower to visit the newly established UN Memorial Cemetery in Busan. The problem was that the cemetery was a bleak, depressing, frozen patch of mud and fresh graves. The U.S. military wanted it to look dignified, peaceful, and completely green for the incoming president and the international press corps.
So they reached out to Korean contractors asking them to lay green grass over the entire cemetery. But this was in the middle of a brutal Korean winter — turf grass was brown and dried up.
Ju-yung realized that the U.S. military didn't actually care about having actual green lawn grass; they just wanted the color green.
So he asked himself: what is green in Korea during the dead of winter? The answer was winter barley — bori. Korean farmers planted barley in the late autumn, and the shoots stayed vibrant green in winter. So the day before Eisenhower's visit, Ju-yung rented dozens of flatbed trucks, drove into the countryside, bought winter barley shoots from local farmers, and had his workers press them manually into the hard-frozen graves by hand, under headlamps, throughout the night. When Eisenhower and his entourage arrived the next morning, the cemetery was a lush, vibrant green.
The second story is from 1953, when the government awarded Hyundai the contract to rebuild the Goryeong Bridge — a 195-meter crossing over the Nakdong River, a critical logistics artery for moving supplies to suppress mountain guerrillas.
This build was an extremely difficult project because the river flooded constantly. And financially, this project could have sunk the company. Hyundai had to take the project on a fixed cost, but because of the war there was hyperinflation, so materials and other costs were rising sharply during the two-year construction. By the time they were mid-project, Ju-yung was spending $2.30 for every dollar the government was paying him. His brother and the company's accountants urged him to default, cut their losses, save the firm. Ju-yung refused. And here's a quote from his autobiography: "A business can bounce back even if it goes bankrupt, but once a person loses credibility, that is the absolute end of it." There's a famous scene from this build — Ju-yung standing knee-deep in freezing mud on the riverbank during a flood, grabbing a wet blueprint and slamming it on the hood of a stalled truck, shouting at his engineers that they will finish the bridge or die on-site.
He took on high-interest private debt to keep the thing funded, and he got the bridge finished on time. As a result, the company — which by now had been renamed Hyundai Engineering & Construction — had grown to become South Korea's number one civil engineering firm.
But then everything changed. For context, because of the Korean War, the economy was heavily dependent on foreign aid, there was a lot of political unrest, and many South Koreans feared that the communist North — then wealthier and more industrialized than the South — might prevail. On May 16, Major General Park Chung-hee seized power in a military coup, arguing that the country needed discipline, stability, and rapid economic development.
For Ju-yung, the coup initially looked like a disaster. Park's new military government launched an anti-corruption campaign targeting businessmen who had prospered under previous administrations. Ju-yung, along with many of the country's leading industrialists, came under investigation.
But while Major Park was an authoritarian, he was also pragmatic. He realized that South Korea needed people who knew how to build roads, bridges, factories, and so on. So Park forged partnerships with the major businesses. Companies that met government export and industrial targets received cheap loans, tax benefits, import licenses, and protection from competition. Firms that failed could lose state support.
This was the beginning of the state-business alliance that would drive South Korea's economic transformation, and this state-directed synergy created what became known as the chaebols — the massive, family-run conglomerates like Hyundai, Samsung, and LG.
And because Ju-yung had already built a reputation for getting things done on time, Hyundai became one of the regime's most trusted industrial partners. But Ju-yung's and Park's partnership wasn't a buddy-buddy one — it was often tense, never equal, but enormously effective — and it helped turn one of the poorest countries in the world into an industrial powerhouse.
The projects that followed transformed both Hyundai and South Korea. Hyundai helped build the Gyeongbu Expressway — 428 kilometers linking Seoul to Busan. The deadline was two and a half years. Ju-yung lived on-site, sleeping in his jeep, personally inspecting roadbeds at three in the morning. Seventy-seven workers died during construction. Against all expectations, the highway was completed in 1970, a year ahead of schedule. As a result, Ju-yung was awarded the country's highest civilian honor.
Now, most of us will know Hyundai for their car business. It started in 1967 when Ju-yung founded the Hyundai Motor Company in Ulsan. He was building major expressways and realized that, in his own words, "if roads are the country's veins, cars are the blood running through them."
Initially Hyundai struck a deal with Ford, assembling the Ford Cortina. The arrangement was a success, and in 1971 Ford and Hyundai were in contract negotiations with the aim of expanding the relationship.
Ford wanted Hyundai to continue just assembling — the engineering knowledge, the design capability, the intellectual property would remain in the U.S. For many business leaders, this would have been fine. But not for Ju-yung.
He couldn't accept that Hyundai would remain what he called a "technological colony."
So he walked away from the negotiations and said that Hyundai would build its own car.
From the outside, the plan looked crazy. South Korea didn't have an automotive industry. There were few if any local parts suppliers. The entire South Korean market only bought about 8,000 cars a year, and here was Ju-yung proposing to build a new factory that would produce 80,000 cars annually.
To many analysts, the whole idea seemed ludicrous. But when you realize that Ju-yung's most famous question was "Have you even tried it?", it's no surprise that he seemed to relish proving the so-called experts wrong.
He recruited experienced car management and engineers from the UK. He hired car designers from Italy. And he secured engine technology from Mitsubishi in Japan. He more or less forced the creation of an entire domestic supplier network by sending Hyundai engineers into Korean companies and teaching them how to manufacture components that had previously been imported. What began as a car project became an industrial development project for the entire country.
Their first car was the Hyundai Pony, released in 1975. It sold 11,000 in the first year. Within the second year, the Pony was shipping to South America, Egypt, and eventually into Europe. And by 1982 they had sold over 300,000 cars.
Another industry Ju-yung entered in the early 1970s was shipbuilding, even though South Korea had no experience building large commercial ships. Again, most observers thought the idea was absurd. Hyundai had never built a shipyard or a ship.
But I love Ju-yung's reply to this skepticism: "Don't you know that the person who thinks a job is possible is the one who is going to get it done?"
Within two years, not only had Ju-yung built the largest shipyard in the world in Ulsan — and it still is the largest — but at the same time they were building the shipyard, they also built two huge oil tankers.
The achievement stunned the international shipping industry, and that single bet helped lay the foundations for what became Hyundai Heavy Industries, today the largest shipbuilding company in the world.
This is really a remarkable achievement. And I think people like Ju-yung — like Musk — first of all have huge vision and ambition, much bigger than most. In fact so big that most people think what they're trying to do is crazy or impossible. And then there's a single-minded conviction in their abilities, and this sets them apart. And I love this quote from Ju-yung: "Conviction creates indomitable efforts. This is the key to miracles."
Then in 1983, Ju-yung set up Hyundai Electronic Industries, moving the group into microchips over the strong objections of his own executives. At its height it became the number one chip maker in the world.
So by this stage, Hyundai was involved in construction, cars, shipbuilding, electronics, engineering, infrastructure, and dozens of other industries that touched every corner of the Korean economy.
How did Ju-yung manage all of this? He'd be up at 3:30 every morning reading newspapers and making calls. By 5:30am, his six sons were seated in silence at a long wooden dining table, waiting to deliver summaries on the various businesses that they managed. Ju-yung would grill them on business operations, lecture them on discipline, and demand absolute perfection. He maintained absolute control over his family and his executives. Managers who missed targets were shouted at and sometimes physically struck — slapped by Ju-yung.
Labor unions were banned, and to quote Ju-yung: "I will not allow unions until dirt gets into my eyes."
Then in 1986, Hyundai entered the United States car market with the Excel. It was positioned as an affordable budget alternative to domestic and Japanese compact cars. It sold 168,000 units in its first year — a record for any foreign car brand's U.S. launch. Fortune magazine named it one of the best products of the year. Hyundai now had a foothold in North America.
However, while Hyundai was prospering, South Korea had been through huge social change and upheaval, beginning with the assassination of Major Park in 1979. The military regime continued under a new leader, but what followed was years of escalating social unrest that ultimately led to the democratic revolution in 1987, which forced South Korea's generals to accept democratic reforms and direct presidential elections.
As a result of these reforms, workers began asking: if Korea was becoming a democracy, why were its factories still run like dictatorships? Because they were. Local governance was basically subordinate to the chaebols. In Hyundai factories, security guards enforced compulsory morning exercises, uniform codes, and on-the-spot haircuts for anyone with hair longer than company standard.
So in Hyundai facilities in Ulsan, where they had a huge presence, workers began forming independent unions. Tens of thousands of workers walked off the job as Hyundai became the center of some of the most bitter labor disputes in modern Korean history. Long strikes shut down shipyards and factories. Riot police were deployed. There were violent confrontations, hundreds of arrests, and fatalities.
Faced with growing unrest, Hyundai management was forced to negotiate and gradually recognize independent unions.
With all of the changes that were happening, Ju-yung could see that a democratically elected government would impose less favorable taxes, new regulations on the chaebols, and that the power and favoritism he had enjoyed up to now would be eroded.
Unsurprisingly, he decided to try to take control. In 1992, he established the United People's Party and entered the presidential race.
But this would turn out to be one of his worst decisions.
Ju-yung authorized a wiretapping operation aimed at exposing officials who were allegedly helping the ruling-party candidate. The tapes seemed to prove his point. The problem was that instead of focusing on the misconduct revealed in the recordings, voters focused on the methods used to obtain them. The wiretapping was viewed as a return to the dark arts of South Korea's authoritarian era.
As a result, Ju-yung finished third, and the new president launched a tax probe against him resulting in a $108 million fine. He was also convicted of embezzling $80 million from Hyundai to fund the campaign and was sentenced to three years in prison. He was 77 at this stage, didn't go to jail, and was granted a special presidential pardon a few years later.
By this stage Hyundai had become a sprawling conglomerate with over 80 companies, and while it was hugely successful, it also had a massive amount of debt — about $50 billion. Banks lent freely because everyone assumed the state would step in if things went wrong.
For years, that assumption seemed reasonable. South Korea's economy kept growing, credit was plentiful, and Hyundai's expansion seemed unstoppable. But like every financial system, it depended on one thing: confidence.
And in 1997, Thailand broke that confidence. For context, Thailand had borrowed heavily, and investors were increasingly questioning whether its economic boom was built on solid foundations. When the Thai government was forced to abandon its fixed exchange rate and devalue its currency, the baht panic spread across Asia.
Investors suddenly started asking the same question about every country in the region: what if the same thing happens there? Money that had flowed into Asian economies stopped. Companies that had borrowed heavily suddenly found themselves in trouble.
South Korea was especially exposed because its largest conglomerates had built their empires on debt. When credit dried up, the entire system seized up and the economy went into a deep recession. The country ultimately needed an emergency bailout from the IMF.
The government forced a huge restructuring of the chaebols. Hyundai was required to separate many of its businesses into independent corporate entities and reduce the web of cross-ownership that tied them together.
The government also ordered the chaebols to abandon the strategy of competing in every conceivable industry. Instead, each group was instructed to focus on a small number of "core businesses." For Hyundai, this meant divesting dozens of operations spanning finance, logistics, retail, petrochemicals, and other sectors.
But perhaps the most controversial reform was a series of compulsory business swaps between the chaebols. The most damaging for Hyundai involved semiconductors. Under government pressure, Hyundai was forced to acquire LG's semiconductor business. Hyundai took on enormous debt to complete the deal, paying a price that many analysts considered excessive. The merger was supposed to strengthen Korea's semiconductor industry. Instead, when chip prices collapsed and the market turned downward, Hyundai Electronics entered bankruptcy proceedings in 2001.
But for the car operations, the Asian crisis brought a huge opportunity. Kia was South Korea's second-largest automaker, but as a result of the crisis it collapsed into receivership in late 1997. Hyundai Motor won the bidding against Ford, paying about $1 billion for a 51 percent stake. Before the deal closed, the state-owned Korea Development Bank wrote off roughly $6.5 billion of Kia's debts, allowing Hyundai to acquire the company with a largely clean balance sheet. The combined entity captured more than 70 percent of the domestic market.
Now, while the Asian financial crisis was happening, Ju-yung — who was 82 at this stage — was focused on something much more personal. You'll remember that as a teenager he fled North Korea by secretly selling his father's prize bull and using the money to buy a train ticket to Seoul. The guilt stayed with him.
So in 1998, while North Korea was in the throes of a famine, he led a convoy of trucks carrying 500 cattle across the DMZ into North Korea. A few months later he returned with another 501 cattle. The event was broadcast around the world.
This wasn't simply an act of charity or a means of relieving his guilt. Hyundai spent months negotiating with both governments. Ju-yung believed economic cooperation could help reduce tensions between North and South Korea, and the symbolic cattle drive opened the door.
For a time, it appeared to work. Hyundai secured exclusive rights to develop tourism and other projects in North Korea, and Ju-yung placed his fifth son and heir apparent, Chung Mong-hun, in charge of this project.
Now there's a whole story around the succession battle during this time, because Ju-yung's health was declining and several of his sons were positioning themselves. I'm going to cover the big split in my second episode on Hyundai, which will mainly focus on Ju-yung's rebellious eldest son, Chung Mong-koo, who took over the automobile business. But that's for the next episode.
Getting back to the North Korean venture, being run by the heir apparent Chung Mong-hun, the whole project never really worked. As you'd expect, North Korea wasn't behaving like a normal business partner — they wanted massive payments just for the privilege of letting Hyundai build there. Hyundai ended up committing close to a billion dollars and they didn't get close to the tourist numbers they needed to make the project viable. So the losses kept mounting, and Hyundai kept the whole thing alive by secretly siphoning profits from its other businesses. Because by this point it wasn't really about the money. It was tied to inter-Korean diplomacy, and it was tied to Ju-yung's legacy.
Then the scandal broke. In 2002, investigations revealed that just before a historic summit in 2000 between the South Korean president and North Korea's Kim Jong-il, Hyundai had secretly wired $400 million to North Korea. The allegation was simple — this wasn't aid, it was a payment to get Kim Jong-il to show up. Hyundai denied it was a bribe. But the company was suddenly at the center of a political scandal, and Mong-hun, the heir apparent, was facing prison time.
On August 4, 2003, he walked into his twelfth-floor office in Seoul, wrote a note to his wife, and jumped from the window. He was 54.
Fortunately for Ju-yung, he wasn't alive to mourn his son's suicide. He died two years earlier, on March 21, 2001, from pneumonia, at the age of 85.
In terms of Ju-yung the man, I don't have much to go on other than that he was an extremely hard taskmaster, both to his sons and his employees, yet at the same time he never held himself aloof. He liked playing volleyball with his men and regularly sat in on training sessions for new hires.
But in terms of his achievements — the companies he created include the world's biggest shipbuilder, the world's biggest shipyard, the third largest car maker in the world, and one of the world's leading engineering and construction firms. It has also evolved to become a leader in AI and humanoid robotics and is the undisputed world leader in hydrogen energy.
But even more importantly, while there are definitely issues around the chaebols and their relationship with South Korean leaders, ultimately Ju-yung played a leading role in lifting South Korea from a poverty-stricken mess to the world's 15th largest economy. He is one of those unique businesspeople — I mentioned it earlier — those with the huge vision, huge ambition, and huge drive that very, very few people have, and it's why he makes for such a remarkable story.
And that brings us to listeners' emails, and this one comes from Derek, who would love me to cover Goldman Sachs. That's a big one, Derek, and I'll likely do a three-parter on that. Thanks so much for the suggestion and for listening, Derek.
And remember, if you have any comments, any corrections, or any story that you'd like me to cover, email me at: info@gbspod.com
All the best, folks.