Kim Woo-choong, Business Luminary Who Founded Daewoo, Dies at 82

1 BUSINESS

Business News - Opportunities - Reviews

 

 

SEOUL, South Korea — Kim Woo-choong, whose catchphrase of “To the world, to the future!” inspired legions of young South Korean entrepreneurs after the devastation of the Korean War but whose mad-rush corporate expansion ended in the biggest bankruptcy in the country’s history, died on Monday night in Suwon, south of Seoul. He was 82.

His death, at Ajou University Hospital, was caused by pneumonia, his family and doctors said.

Although Mr. Kim lived out of public view after the disintegration of Daewoo in 1999, he remained a business legend in South Korea. His rise symbolized the country’s emergence as an economic powerhouse from the ashes of war. Conversely, Daewoo’s collapse in the wake of the 1997-98 Asian financial crisis exposed the country’s structural flaws and signaled that its period of breakneck growth was over.

Mr. Kim built Daewoo from a one-room textile exporter with a five-person staff in 1967 into South Korea’s second largest “chaebol,” or business conglomerate. By the time it collapsed under the weight of $80 billion in debt, Daewoo employed 300,000 workers, generated $67 billion in sales and flooded world markets with cheap cars, ships, refrigerators, garments and television sets.

The brand name Daewoo has largely disappeared in South Korea. But dozens of executives who started their careers under Mr. Kim and still call themselves “Daewoo men” lead South Korean companies today. Thousands of former Daewoo employees, business tycoons and politicians paid tribute on Tuesday and Wednesday at a funeral altar set up at the hospital.

“More than anyone else, he was the face of the era of dramatic economic growth for South Korea,” said Sohn Kyung-shik, chairman of the Korea Employers’ Federation.

Kim Woo-choong was born on Dec. 19, 1936, a son of a school teacher-turned provincial governor of the southern island of Jeju. When Mr. Kim was a teenager, his father was kidnapped by Communists and taken to North Korea during the war. After that, Mr. Kim worked his way through high school and college, delivering newspapers and selling vegetables and iced tea on the streets and acquiring the marketing gumption and savvy that would later mark his career.

To start Daewoo, or “great universe” in Korean, he borrowed $5,000.

Mr. Kim personified the belief that South Korea, a country with few natural resources, had to export to survive. He was the first South Korean businessman to set up offices overseas, in Sydney, Australia, and in Singapore in 1969. At its peak in the 1990s, Daewoo accounted for 14 percent of all South Korean exports.

Mr. Kim claimed to have never taken a day off and to have reported for work the day after he got married. He never drank, never played golf and was always the first to get up from the table after a meal, former Daewoo employees recalled.

Mr. Kim expanded aggressively at home through mergers and acquisitions, taking over 10 businesses in 1973 alone. He also traveled to places few South Korean businessmen or diplomats then went, spending 290 days abroad in a typical year, according to his memoir and former Daewoo aides. He met with the top leaders of Cuba, Sudan, Libya and Vietnam to secure export deals.

In 1992, Mr. Kim became the first South Korean businessman to visit North Korea, at the invitation of its founder, Kim Il-sung. The Daewoo chief called that isolated country “the last market on earth.” He opened the first joint inter-Korean venture in 1995, producing textiles from the North Korean port city of Nampo.

When the Soviet bloc began crumbling in the late 1980s, Mr. Kim went on a shopping spree, buying dilapidated automotive and home-appliance plants in former Communist countries and developing nations. At its peak, Daewoo took over a company every three days, he said in interviews, and he dreamed of becoming, as he put it, an “automotive Genghis Khan.” Daewoo built car factories in 14 countries, including China, India, Poland, Romania and Uzbekistan.

His memoir, “The World Is Wide, and Full of Business Opportunities” (1989), sold one million copies in six months, a record still unbroken in South Korea. Its English version, “Every Street Is Paved With Gold,” was published in 1992. That year, Mr. Kim briefly campaigned for the South Korean presidency.

“You have to be desperate,” Mr. Kim once said, explaining what drove him as a businessman. “If you are desperate enough, the answer will come to you even when you are in sleep.”

Mr. Kim befriended President Trump when Mr. Trump was a real-estate businessman in New York. Mr. Kim’s company Daewoo Engineering & Construction was one of Mr. Trump’s main partners in building Trump World Tower in New York, at United Nations Plaza, in the late 1990s. That relationship led to a license contract under which Daewoo was allowed to use the brand name Trump World on seven tall buildings in South Korea.

The headlong expansion of Daewoo and other South Korean chaebol, like Samsung and Hyundai, fueled South Korea’s rapid economic growth.

Mr. Kim famously said: “If we don’t have technology, we can buy it. If we don’t have money, we can borrow and repay it when we make it.”

But that strategy sowed the seeds of South Korea’s financial meltdown in the late 1990s. The chaebol expanded on borrowed money and corrupt ties with past governments. When the Asian financial crisis hit and banks began calling in loans, Mr. Kim’s empire crumbled. South Korea ultimately sought a $58 billion bailout from the International Monetary Fund.

As Daewoo companies were auctioned off in fire sales, Mr. Kim fled South Korea in 1999 and lived abroad as a fugitive. When a gaunt, ailing Mr. Kim returned in 2005, calling himself “an old fox looking homeward when it’s about to die,” protesters met him at the airport and shouted, “Punish the big thief!”

Mr. Kim was sentenced to 10 years in prison on charges of exaggerating Daewoo’s assets though falsified books, obtaining illegal bank loans and diverting billions of dollars out of the country. He was released in 2007 under a presidential pardon.

Mr. Kim spent his later time in Vietnam, where he led workshops for young South Koreans hoping to open businesses abroad. He also claimed that Daewoo was a scapegoat for the government, forced to dissolve a chaebol to show its resolve to reform big businesses in return for the I.M.F. bailout.

“My big mistake was being too ambitious, especially in autos,” Mr. Kim said. “I tried to do in five years what usually took 10 to 15 years.”

1 BUSINESS

Business News - Opportunities - Reviews

 

 

Leave a Reply