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http://www.businessweek.com/magazine/content/08_11/b4075048450463.htm


My Way or the Highway at Hyundai
The Korean carmaker and its Kia subsidiary are trying to move upscale in the U.S.—but culture clashes, management turmoil, and strategic discord are making for a bumpy ride

On the morning of Monday, Feb. 4, about 20 of the top executives at the Irvine (Calif.) headquarters of Kia Motors America left their warm offices to stand outside in near-freezing cold. They were awaiting the arrival of Byung Mo Ahn, the president of Kia Motors. The group organized itself into a receiving line and stayed in formation for more than 15 minutes until Ahn arrived in a chauffeur-driven Kia Amanti sedan.

Although some of the executives were shivering, it would have been bad form to return inside: Standing to greet top brass is customary at Hyundai Motor, Kia's Korean parent. After spending a full week in Irvine, Ahn performed another ritual that has become common at the company: sacking the American leadership team. On Feb. 8 he axed Len Hunt, president and CEO of Kia Motors America, and Ian Beavis, marketing vice-president.

It marked the fourth shakeup in three years for Kia's American operation. The U.S. unit of Hyundai, meanwhile, has churned through four top executives in five years. Many of the departures have come at awkward times. Hunt and Beavis got the news at the airport as they were about to fly from Irvine to an annual dealer meeting in San Francisco. According to several sources, Hunt's predecessor, Peter Butterfield, was dismissed during a dinner meeting with dealers at the Bellagio Hotel in Las Vegas—between the entrée and dessert. The companies declined to comment on any of these executive departures.

The management shakeups at the American divisions of Hyundai and Kia—two once-separate manufacturers that are now essentially run as one company—come at a critical period. Both brands, which were originally marketed to American consumers as utilitarian econoboxes, are trying to move upscale and sell sedans that can compete with Cadillac and BMW. They are also banking on rapid growth in the U.S. Next year, for example, Kia is opening a plant in Georgia that was built on the optimistic assumption that the company could sell at least 370,000 cars in the U.S. annually. But sales momentum has been slowing. Kia sold 305,000 cars in America in 2007, 13% shy of its target of 350,000. Given their aggressive growth plans, both Hyundai and Kia "need North American auto expertise," says James N. Hall, president of 2953 Analytics, an auto industry consultancy near Detroit.

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The one thing I don't get is that Hyundai and Kia are essentially parallel brands that seek the exact same market with little differentiation. GM is routinely criticized for badge engineering but Hyundai does the exact same thing without attempting focus its brands to different sub-markets.
 

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Hyundai and especially Kia are overshooting themselves. Expecting to sell at least 400,000 units annually and then punishing those executives that failed to met projections is not the proper way of trying to grow your business. It's sad when Len Hunt was fired from his job because the "head" of Hyundai didn't like the commercial of the president's day ad.
 

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I take a perverse delight in knowing that Hyundai and Kia are run in a feudal manner, one in which no one can comment that the emperor has no clothes. While they've been successful thus far, and they've demonstrated that damaged brands can be repaired-are you listening, GM?-as the article points out, I'm not so sure that the foundation is as solid as it was just a few years ago; dumping cars into fleet is not a good thing. Even Detroit has come to appreciate that.

It will be interesting to see if Hyundai and Kia keep plugging along or if the cracks in the foundation bring them down at least a bit. I'd love to see Hyundai and Kia trip.
 

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Holy crap, they are arrogant.

And their management style is 10 times worse than Ford's before Mullaly came along.

They expect to make both Hyundai and Kia luxury car brands? First they have to not be viewed as discount car makers, then as upscale brands beofre they can be full-fledged luxury manufacturers. That will take decades.
 

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I have had to deal with Korean Hyundai Engineers and Managers, not fun, extremely arrogant. They think they are Toyota. Having dealt with Toyota though I can honestly say Hyundai doesn't have a clue, I look forward to the day they crash and burn.

However, there is allot of good people working in Alabama that deserve some credit.
 

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Their arrogance is what will ultimately prevent them from making it in the US as big as they want to.

This is America, not New Korea...... Once they get someone in there with balls who will get the right team and tell the Korean to back off and let him do his job, they'll do fine. However with their culture, this is damn near impossible.
 

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I think that they need to drop the delusions of grandeur and turn Hyundai into a Toyota chaser and Kia into a youth brand.

They have a good thing in the Picanto, Rio and Cee'd in terms of styling that has youthful appeal. The Sportage and the Magentis need to take a leaf from the RAV4 and Accord Euros book respectively.
 

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I have had to deal with Korean Hyundai Engineers and Managers, not fun, extremely arrogant. They think they are Toyota. Having dealt with Toyota though I can honestly say Hyundai doesn't have a clue, I look forward to the day they crash and burn.
not crash and burn but only crash and being buyed by.......Ford. The irony was Hyundai beginned by building British Ford Cortinas under licence before switching for Mitsubishi models and Kia built it once the Mazda 121 aka Ford Festiva/Aspire. Ford almost buyed Kia in the late 1990s but due to the pressure of some groups in South Korea, Hyundai taked the big stake of Kia.
 

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I doubt they think much more of the typical white Alabaman factory worker.
This is true, I think this is more than just an issue of arrogance, After the comments by member yardbirds1969, I have a feeling that this is a company whose owners and business culture views themselves as somehow superior human beings who can do anything they damn want.
If they can sumarily dismiss senior managers like that, imagine how they would treat a line worker! UAW needs to get in there and fast.

Anyone would be insane to work at Hyundai
 

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Ian Beavis, marketing vice-president.
Cool... heh...heh heh... heh... heh... heh heh...
 

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As long as hyundai sells POS accents beside their new genesis or whatever, there screwed. It will always be the "I can't afford a bmw or lexus so I got this instead." brand.

They should have started a third brand or better yet, buy jaguar from tata. Instant credibility.

Hyundai is the automotive equivalent of the fake rolex.
 

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I take a perverse delight in knowing that Hyundai and Kia are run in a feudal manner, one in which no one can comment that the emperor has no clothes.
Surely, Gm executives (or friendly Ford family) made a clear-cut case for superior management based on their last 10-20 year performance.
Toyota and Honda management are more close to Korean counterparts than North Americans and WOW (gasp) it worked!
May be, just maybe handling your company like a family (rather than a source of that golden parachute, arranged no matter what) works better...
 
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