The lesson of borrowing money for a lifetime of the late President of Hyundai
Hyundai is an auto company that is no stranger to most of us. Currently, this global car company has a market capitalization of more than 37 billion USD. However, not everyone knows that Chung Ju Yung – the founder of Hyundai experienced many difficulties to start a business and turn the company into a car giant.
Here is the story of the founder of Hyundai:
Efforts to get out of poverty
Chung was born in 1915, in Tongchon (present-day North Korea). At that time, this place was annexed to Japan. As the eldest in a family of eight children, he was forced to drop out of school before going to high school to work and earn money to support the family.
Even so, the hard manual work made him want to escape from a difficult life. At the age of 16, he walked nearly 20 km to another town and got a job at a construction site. Here, despite working long hours every day, the remuneration he received was not high. However, thanks to this, he discovered a passion for civil engineering.
Young Chung Ju Yung (Photo: Internet).
However, it was shelved when Chung was found and brought home by his father. At the age of 18, he once again “escaped” to Seoul (169 km from Tongchon) with his feet. Unfortunately, he was tricked by someone who promised to find a job but cheated him of all his money. With no money left, he was forced to return home.
Despite the difficulties, he still did not give up the idea of escapism. The third time, he decided to take the train to save effort and faster. In order to have money to buy tickets, he recklessly stole his father’s cows and sold them. Arriving in Seoul, he applied for a job related to accounting. His aim is to learn more about corporate finance. But just a few months later, he was forced to return to Tongchon by his father.
With a strong desire to escape poverty, Chung once again fled to Seoul and worked for a rice shop. When the owner became seriously ill, unable to continue the business, he decided to put all his savings to buy back the shop and become the owner at the age of 22.
To have start-up capital, in addition to working hard, Chung also lived very frugally. When he worked for a rice shop, he got up early to walk there instead of spending 5 won on the train. Because of walking a lot, his shoes wear out the soles. However, he did not give up, but added a base and continued to use it. He also did not buy clothes, but only a few sets that he wears over and over again from day to day.
Thanks to that lifestyle, when the owner fell ill, he had the capital to buy back the rice shop. After going through many difficulties, his career journey has officially begun.
Build Hyundai Empire
Chung’s first challenge came two years later, when the Japanese government implemented a rice rationing in 1939. Eventually, he had to stop the business. Then he opened an auto repair garage. In just four years, the repair shop had 70 employees.
But the challenge does not stop there. The Japanese government forced his garage to merge with a steel mill. During World War II, he temporarily moved back to his hometown, and began planning to use the money he earned.
After the war ended, Chung combined his passion for civil engineering and his knowledge of automobiles to found Hyundai Motor Industrial in 1946 and Hyundai Civil Industries in 1947.
A Hyundai factory at the present time (Photo: Internet).
At that time, Korea was trying to rebuild and industrialize after the war. Thanks to his business acumen, Chung has skillfully placed his business ventures at the heart of this endeavor. Even the naming of the company was calculated to suit the times. Hyundai means modern.
After a period of operation, Hyundai won a number of lucrative government contracts. For 20 years after World War II, the company was responsible for developing much of the transportation infrastructure in Korea.
Chung is the one who put Hyundai on the world map with international contracts. In 1965, the company was awarded a contract to build a Thai highway. Then they completed the industrial port of Jubail in Saudi Arabia. At the time, it was the largest construction project of the 20th century. By the 1980s, Hyundai was the largest and most successful conglomerate in Korea.
In 1976, the company launched the Hyundai Pony – a car using only Korean technology. Having achieved success in South America, this model continued to penetrate the US market in 1986. There, it was renamed Excel and set a record as the most sold car model in the first year with 126,000 units.
Hyundai Pony car (Photo: Internet).
Despite his great success in the construction and automobile sectors, Chung decided to step down as chairman of Hyundai in 1987. Nevertheless, he still strives to promote tourism projects to introduce Korea to international friends. . In 1992, he ran for President of South Korea but was unsuccessful.
Prior to the 1997 Asian financial crisis, Hyundai’s annual sales exceeded $90 billion. Chung once owned 6 billion USD and was the richest man in Korea.
Paying the old debt
In 1998, Chung (then 84 years old) returned to his hometown of Tongchon, bringing with him 1,001 cows. He said: “The cow I stole in the past has become 1,000 cows. My debt is finally paid off.”
The founder of Hyundai died in 2001. At that time, he owned 4 billion USD. For many people, Chung’s success lies not in this fortune but in his important contributions to Korea.
For those achievements, Chung was awarded a medal from Queen Elizabeth II of Great Britain. In 1982, he became the first non-American businessman to receive an honorary doctorate in business from George Washington University.
In Korea, he held the chair of the Confederation of Korean Industry for many consecutive years and was one of the participants in negotiations to help Seoul win the right to host the 1988 Olympics.
Success philosophy
Chung once shared that one of the important factors for his success is the spirit of “nothing is impossible”. There is a famous story about Chung that when he entered the shipbuilding industry, he had financial difficulties. So he went to Barclays bank and gave them a 500 won bill (equivalent to only 0.5 USD).
This banknote, although not high in value, shows a ship manufactured in the 16th century with the implication that Koreans can also build ships. As a result, Barclays lent Hyundai $50 million. Thanks to that, Chung solved the financial obstacle and turned the company into the largest ship manufacturer in the world at that time.
Chung Ju Yung (Photo: Internet).
Even when he became a rich man, he still maintained the habit of thrift, not buying unnecessary luxuries. The businessman also regularly advises his employees to live frugally, at least when buying a house, spend more freely. According to him, they should practice saving from the smallest things such as not smoking, drinking, not buying too much…
Encountered many difficulties in his career, but Chung still managed to overcome. It was his credibility that helped him stand firm in the marketplace. Once, when conducting the Koriong bridge construction project, Hyundai fell into a loss and was in danger of bankruptcy.
To keep his credibility, Chung decided to sell his house and liquidate his personal assets to complete the project. This took Chung and the company many years to pay off the debt, but thanks to that, Hyundai was later trusted by the Korean government and its partners, assigned to many large and small projects.
“It’s never a failure, it’s all just a challenge” is the immortal motto as well as the conclusion for what he has experienced in his life. For him, “Luck and bad luck all come to people equally. The most important thing is to make constant efforts and know how to seize opportunities”.
Source: Inc, Medium
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