Auto group says move is a show of resolve, but ruffles Hyundai Group
Hyundai Motor Group has set up a new office for chairman Chung Mong-koo at Hyundai Engineering and Construction, in an apparent move to emphasize its control over the builder.
“The chairman will be using the old office used by the late chairman (Chung Ju-yung), and it represents his resolve and the importance of Hyundai E&C as a member of the group,” a Hyundai Motor Group official said. He added that the chairman’s office at the group in southern Seoul will be maintained.
Hyundai Motor Group, which is now promoting the construction business as one of its top three growth-engines, also unveiled a new corporate logo for itself on Thursday.
However, industry watchers say that the move is related to the symbolic meaning Hyundai E&C holds for Hyundai conglomerates.
Chung’s taking of his father’s office is clearly ruffling feathers at Hyun Jeong-eun’s Hyundai Group, which unsuccessfully competed for Hyundai E&C with Hyundai Motor Group, according to one industry source who declined to be identified.
During the process, the two conglomerates had resorted to legal action against each other on a number of charges including defamation in what many called yet another family feud as the group chairwoman is the widow of Chung Mong-hun, brother of Hyundai Motor Group chairman.
While Hyundai Group’s public relations officials declined to comment, sources inside the conglomerate said that the group was “not happy” about the developments regarding the new office.
The opening of a new office for the chairman, who went to work at Hyundai E&C building for the first time in 11 years on Friday, is not the only move that could be interpreted as Hyundai Motor Group’s tightening of its grip on the builder.
On Thursday, Hyundai Amco vice chairman Kim Chang-hee was appointed as Hyundai E&C’s CEO to serve with Kim Joong-kyum who will continue to hold the CEO’s post.
Hyundai Motor Group chairman Chung Mong-koo (center) walks along with executives including Hyundai E&C CEO Kim Joong-kyum (third from right) at the builder’s office in Seoul on Friday. (Kim Myung-sub/The Korea Herald)
Having worked for Hyundai Motor Co. for nearly 30 years, Kim is said to be a “Hyundai Man” through and through, and he also headed the auto group’s team for Hyundai E&C acquisition.
Further clinching his grasp over the construction company, Chung on Friday vowed Friday to make an all-out effort to help develop Hyundai E&C into a leading global company.
The pledge came after the group completed its acquisition of Hyundai Engineering & Construction Co. on the same day by paying the remaining 4.46 trillion won ($4.06 billion) out of the 4.96 trillion won deal.
“Everyone at Hyundai Motor Group will give their full support to help you realize all your abilities and potential,” Chung said in a meeting with Hyundai E&C officials.
Hyundai E&C, the country’s largest builder, is considered to have formed the basis on which late Chung Ju-yung built his business empire, which gave rise to a number of smaller conglomerates including Hyundai Motor Group and Hyundai Group.
The construction firm fell under the joint management of its creditors following a debt for equity swap in 2001. Hyundai Motor Group was selected a preferred bidder in January and signed the deal for the takeover in early March.
With its acquisition of the country’s largest builder, Hyundai Motor Group, also the parent of South Korea’s top two automakers, Hyundai Motor Co. and Kia Motors Corp., now has 50 affiliates with combined assets of 126 trillion won and 184,000 employees, the group said.
“Hyundai Motor Group’s massive global network spanning nearly 190 countries throughout the world, along with the global competitiveness of our group’s other units, will all serve to reinforce Hyundai Construction,” Chung said.
By Choi He-suk (firstname.lastname@example.org