South Korea

Legacy in Jeopardy

Hyundai president Chung Ju Yung’s death on March 21 marked the end of an era for both the northern and southern ends of the Korean peninsula. Hailed as one of the major tycoons responsible for transforming postwar Korea into a prosperous nation, Chung created South Korea’s largest industrial group from a modest car-repair shop and was known, during his life, as “the living embodiment of the Korean economy” (semiofficial news service Seoul Yonhap, March 21).

More important, in recent years he had played an essential role in engaging North Korea by pioneering tours from South Korea to the North’s famous Mount Kumgang—an effort that was more symbolic of reconciliation than it was profitable; the company lost US$400 million in the project.

Hyundai, which was run with a Confucian emphasis on family, is now in the hands of Chung’s sons. Unlike their North Korean-born father, however, the sons have no sentimental attachment to their northern neighbor. Mong Sun, the fifth son and president of Hyundai Engineering and Construction (HDEC) and the North Korean ventures, may just pull the plug on the Mount Kumgang project.

That HDEC might pull out of North Korea spells trouble for South Korean President Kim Dae Jung. Kim’s engagement policy has been driven in part by Hyundai’s involvement with the North; without it, reunification plans could suffer a severe setback. For this reason, the Kim administration has been trying to coax Hyundai Motors into taking over the ailing Hyundai Engineering tourism ventures.

South Korean newspapers have reacted with indignation at the government pressure, since Hyundai is not only a private firm, but a key component of the national economy. Seoul’s Joong-Ang Ilbo (Apr. 10) said, “If companies invest in the North, where profitability is still questionable, at a time when many of them are struggling to stay alive, we will have more corporate failures littering the Mount Kumgang landscape.” Seoul’s conservative Chosun Ilbo (Apr. 9) expressed “shock at the latest news about Hyundai” and called it “truly stunning [that] the government could now be secretly pushing Korea’s largest automobile maker, Hyundai and Kia Motors, into dangerous investments in North Korea.”

The independent Dong-A-Ilbo, also based in Seoul, predicted economic disaster on a larger scale if Hyundai Motors were to take up the North Korean ventures. An editorial on April 9 opined, “Foreign investors’ trust in the Korean government and the Hyundai auto firm would plummet, and the nation’s economy would face a crisis with the prospective nonviability of the nation’s largest car maker.”

President Kim and his administration may have to look elsewhere—perhaps pressing other South Korean conglomerates, or even the Unification Church, to take Hyundai’s place—since, according to reports, Hyundai Motors has already refused to go north.