Dear Hyundai Heavy, That Giant Sucking Sound Is…

Hyundai Heavy Bidding for Hynix Semiconductor. Huh?
When I first saw the headline, I thought that it was a misprint. Hyundai Heavy is certainly one of Korea’s most admired and successful companies. It is the largest shipbuilding corporation in the world. This is not about the fact that it survived a great amount of difficulty when the Hyundai Group faced extinction during the Asian financial crisis during the late 1990s. However, the question was raised when it was clear that Hyundai Heavy was a potential bidder for the bankrupt Hynix Semiconductor: what does Hyundai Heavy know about semiconductors? Shareholders agreed with me, and sold their shares, en masse. Hyundai Heavy stock dropped by 6.3% since the revelation. The monetary loss? A cool $2.4 billion. That giant sucking sound? Money flying out the window.

This is How It Is Supposed to Work
Korean companies have had a very, very unsuccessful record when it comes to large chaebol managing many different businesses. For those too young to remember, Daewoo Group folded, both Hyundai as well as Samsung Corporation were both under a great deal of duress, even fabled Jinro (soju) went bankrupt. It seems that some investors do have a memory that lasts more than a month. Shareholders have an unlimited number of choices, and if there is a fundamental change in prospects for a company, these shareholders can send the message to the company’s management. That message isn’t sent via email, or with a demo. It is sent by owners of shares selling theirs.

What Has been Learned?
It is difficult to say, but we can conclude at least two things. First, Korean corporations have excess capital in large amounts. As a result of external factors (weak Korean Won, increased Chinese demand), and internal factors (greater innovation), certain Korean corporations have risen to become elite corporations in the global economy. While Korean employees are struggling with a very high cost of living, some Korean corporations themselves are not suffering. Second, Korean shareholders, foreign and domestic seem to be flexing their muscles when it vehemently disagrees with management decisions. Korean investors, especially the largest ones like the NPF and the KIC, can purchase investments both inside and outsideKorea. As Korea’s financial markets develop, knowledge of these alternatives will only increase. So, these large investors can invest in other alternatives more easily, given improved skills and knowledge. And now, Hyundai Heavy is fully aware of this, as are other Korean corporations. Hopefully, shareholders of those other large Korean corporations don’t hear the same giant sucking sound as Hyundai Heavy shareholders did.


Re: Dear Hyundai Heavy, That Giant Sucking Sound Is…


I am sorry but I don’t agree with your IDEA. Successful businessmen and investors are those who are risk-taker. The success is just within your heart and not in the other’s imagination. If you are born a winner, you must have to be positive regardless of what other’s thinking of your capability.

I agree with Hyundai Heavy Industries Decision. Good Luck Hyundai Heavy Industries.

I am working for the one of the largest Chaebol the Hyundai Motors Group and I backed-up all Hyundai’s plan to save all former Hyundai Company and regain the previous strength of the Chaebol and continue growing  by continue diversifying.  The success is in the heart. I believe of the late Mr. Jung; you don’t need expertise to be successful. Just follow your dream and follow your heart and move forward. Your passion with perseverance will guarantee your success. From a very poor farmer into a world famous family conglomerate.. A big success of Chaebol.

Only there is little risk of failure but not that much of what you are thinking of. I know HHI could handle this.


On the Other Hyundais………….After few months of management takeover of Hyundai Motor Group to Hyundai Engineering; I agree there is a little changes and slower growth because of different management strategy which is far from the experience but I knew it would be solve soon.

For Hyundai Engineering, a subsidiary of Hyundai Eng Construction (HDEC) which is now part of the Hyundai Motor Group, the changes already took effect after the Hyundai Motor Management takeover. The Hyundai Motor replaced the top management experts of Hyundai Engineering with their trusted people which experience is very far from construction industry resulting to very high pressures to the management but I know they will solve it soon. The argument is the new Management head is hesitant to accept the system of Construction project in the overseas. The arguments heightens, the smile of the faces of the employees are vanished since the takeover.  

For me I agree, ... the Hyundai Motorshave chosen leader who is trustworthy but if the experience is very far from the industry then it could be a big problem because he could not understand what the people sentiment in the industry for many decades experience.  Especially if the new leader is not open minded, then it could result to failure. Construction industry is different from Manufacturing Industry and this is the most important factor that the Hyundai Motors must have to look for. Hyundai Engineering Business in the overseas is just like a temporary business that would end after the project is finished. The Hyundai Motors must have to check this out and make a survey what the people's wants or else, …….

The important is the employees in a team understand each other the team leader must have experience if not, he must be open minded and open to listen the explanations of the experts who are working for how many years in the industry .

Re: Dear Hyundai Heavy, That Giant Sucking Sound Is…

'' Successful businessmen and investors are those who are risk-taker. ''

I think this is a double edged sword. Perhaps initially many well to do people took a chance on their idea and were fortunate enough to make a go of it. With that said. I don't think Bill Gates is rich because he takes risks, he's rich because he saved his money. The same goes for Buffet, he didn't get stupid wealthy by buying mansions and driving Aston Martins in his early years, he still lives in the same house he bought 30 years ago. Now that's wealth.  

As for the world of investing, I wouldn't buy any stock period. Am I missing the boat? probably. Have many people gotten rich playing the korean and other stock exchanges? Sure, have many people lost everything? More than who have made it. I can assure you that.