HOW CHUNG JU-YUNG IS TRYING TO REUNITE KOREA
At an age when most men have long since retired, 76-year-old Chung Ju-Yung proclaims he plans to work for 25 more years. Rising before 5 a.m., the honorary chairman of South Korea's giant Hyundai Business Group often starts his day by rereading biographies of powerful men who have changed world history. By 6 a.m., he's on the phone to Hyundai branches around the world. That's followed by breakfast at home with one or more of his seven sons. Then, he and the sons walk 2 1/2 miles to Hyundai headquarters, arriving by 7:40. His typical day ends 16 hours later, ideally capped by drinks with a friend, such as movie star Choi Pul-Am. "I love working, so I never feel tired," Chung says.
Chung's remarkable stamina isn't news to Koreans. The onetime construction worker has been among his nation's most powerful and influential businessmen for decades. Hyundai, which he founded nearly 50 years ago as an auto-repair business, today consists of 42 companies in such industries as construction, shipbuilding, and carmaking. With revenues of $36 billion, it is Korea's second-largest conglomerate, after Samsung.
NEW GROUND. Now, Chung is busy expanding Hyundai into the communist world. After four decades of official hostility between the Soviets and South Koreans, he has broken the ice by cutting deals with Moscow in everything from shipbuilding to Siberian timber. But there's much more going on than the search for a quick buck. For Chung, it's a matter of shaping Korean history. Born in what is now North Korea and with an aunt still living there, his dream is to reunite the Korean peninsula in his lifetime. By forging ties with North Korea's biggest patrons, he aims to step up pressure on that country's isolated regime. "Looking at international trends, North Korea has no choice but to improve relations with us economically," Chung says.
Chung is the chief visionary and articulator of "Nordpolitik," Seoul's strategy for dealing with the North and its communist superpower backers. His first coup was to help engineer the decision to let Seoul host the 1988 Olympics, the opening step in wooing the Soviets and Chinese. In 1989, he became the first South Korean businessman to travel to the Soviet Union, and he again broke new ground when he met with Soviet President Mikhail Gorbachev in the Kremlin last fall. Although Daewoo Corp. and Lucky-Goldstar Group were the first Korean conglomerates to form ties with China, Hyundai is now gearing up for big projects of its own. Next month, on his second trip to Beijing, Chung hopes to open a light-truck plant not far from the North Korean border.
With the country unified, Chung believes, Korea could cut back its hefty military spending, combine the south's industrial expertise with the north's inexpensive labor, and challenge Japan as the region's major powerhouse. "He is motivated by the belief that Korea can be the equal of any country, and especially Japan," says Hyundai adviser Richard C. Holbrooke, a managing director at Lehman Brothers. "This is what Andrew Carnegie must have been like. He is a true businessman-nationalist."
That means putting big bucks where his beliefs are. As part of a plan to invest up to $500 million a year in the Soviet Union, Chung has launched Korea's only major joint venture there--a $30 million timber-development project in the Soviet Far East. He has also cut a pair of deals to build 26 ships. Of the $3 billion in credits recently pledged to Moscow by Korean President Roh Tae Woo, about $500 million will go to Hyundai for modernizing up to 15 plants. Hyundai also signed an agreement for a soap-making joint venture in the Soviet city of Nakhodka. The company is aiming for 50% annual growth in its Soviet business.
FROM SCRATCH. Despite all the roadblocks to doing business in the Soviet Union, fellow Korean chaebol--large business groups--have followed Chung's lead. Samsung, Lucky-Goldstar, and other heavyweights have offices in Moscow. Billboards for Korean products have replaced Communist Party placards in the city.
Chung's influence is a measure of his stature as the grand old man of Korean business. Born in the northern farming village of Asan as the eldest of eight children, "Big" Chung got no further than primary school before running off to Seoul to become a construction worker at the age of 19. "We were proud of him," recalls Chung Se-Yung, the third of Chung's four younger brothers and now chairman of Hyundai group. "I remember when he would come back to Asan by overnight train with boxes of tangerines that we otherwise never saw in our village."By the time Big Chung's family followed him to Seoul in 1943, he had formed a blossoming auto-repair shop. Since most cars were owned by the government, Big Chung regularly made the bureaucratic rounds to collect on his bills. There, he observed building contractors picking up much larger payments. "Construction is an industry where you can start from scratch, so he did," says one of his brothers, known as Little Chung, who is 13 years younger. Today, with revenues of $2.8 billion, Hyundai Engineering & Construction Co. is Korea's largest building outfit.
Unlike Samsung and Lucky-Goldstar, Hyundai's management control remains in the hands of the Chungs--especially Big Chung. Although he made himself honorary chairman in 1987 and turned over formal authority to Little Chung, no one doubts who's really in charge. "Hyundai is still run by a very strong, powerful, charismatic person," says a Korean banker who has lent to Hyundai for years. "If the honorary chairman thinks it's a good project, it'll get done."
With visitors, Chung affects an air of soft-spoken reticence and informality. Decked out in the company uniform, he could pass for any of the group's 200,000 employees. But inside Hyundai he has built a reputation as a socially conservative, hard-bitten autocrat. Because he hangs tough, labor relations at Hyundai companies are among Korea's most tumultuous. Staffers tremble in his presence, or even at his anticipated arrival.
'TOO OLD'? Critics call him an anachronism. "He's had difficulty adjusting from the political style of the 1970s," says a national assemblyman from the ruling Democratic Liberal Party. "He's too old. When the political leadership asks him to do things like provide more welfare to his workers, he refuses." Others wonder if he is tilting at windmills with his Soviet joint ventures. "How can you make money in that kind of country?" asks Goldstar Senior Managing Director Kim Young-June.
Maybe it's impossible. But then, South Korea's opening to the communist giants is already paying political dividends. In April, China told the north that the two Koreas should seek separate membership in the U. N., something North Korea has fervently opposed. For their part, the Soviets recently vowed to withhold uranium from North Korea until it agrees to international inspection of its nuclear facilities. The Soviets have begun demanding that the north pay for Soviet crude oil with hard currency. Feeling the heat, North Korea is making futile overtures to Japan for aid.
Chung runs the risk of making the north even more paranoid--and perhaps openly hostile. But he has no intention of turning back. New alliances between old enemies could solidify and change the face of Asia as dramatically as the fall of the Berlin Wall changed the face of Europe. If that happens soon enough, Chung Ju-Yung just may preside over Hyundai's big-time expansion into what is now North Korea.Robert Neff and Laxmi Nakarmi in Seoul, with Amy Borrus in Washington and Rose Brady in Moscow