The death of former Daewoo chairman Kim Woo-choong, whose catchphrase, “To the world, to the future!”, inspired legions of young South Korean entrepreneurs, has reignited the debate in the country about his legacy. “Chairman Kim”, who died of pneumonia aged 82 in December, strove to be an “automotive Genghis Khan”, says The New York Times. His “mad-rush corporate expansion” in the 1990s came to symbolise South Korea’s rise as an Asian tiger. Yet it all ended in the biggest bankruptcy in the country’s history when his Daewoo “chaebol” collapsed in 1999.
An empire riddled with debt
At the height of his success, “Kim personified South Korea’s unlikely transformation, out of the ashes of brutal civil war, into a manufacturing powerhouse”, says the FT. “But his empire, riddled with fraud and debt, toppled over after the 1997-1998 Asian financial crisis, turning Kim and his reliance on personal ties with politicians and state-backed loans into a symbol of what was wrong with the country.” Although it became known in the West primarily for its cars (Daewoo Motors was eventually sold to General Motors), Kim’s conglomerate straddled ships, oil-rigs, steel-making, home appliances and hotels – at its peak employing more than 300,000 in 110 countries. Yet it all began with a humble one-room textile company, founded in 1967 when Kim was 30, with just five million won (roughly $5,000) in capital, says the Nikkei Asian Review.
Born in Daegu in 1936, Kim’s early life was scarred by the Korean war. When he was a teenager, his father – a school teacher turned provincial governor – was kidnapped by Communists and taken to North Korea, says The New York Times. Kim worked his way through high school and college, selling vegetables and ice tea on the streets, “acquiring the marketing gumption and savvy that would later mark his career”. When he began Daewoo, his family connections, including those with Park Chung-hee, who became the country’s authoritarian ruler in 1963, stood him in good stead, says the FT. Kim then expanded aggressively, first at home through mergers, then abroad. In 1992 he was the first South Korean businessman to visit North Korea, later opening a joint “inter-Korean�� venture.
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An unhappy fate
Kim lived a spartan life: he slept at his factories, never took a day off, never drank and never played golf. He 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 therein lay the seeds of both his own, and his country’s, downfall. When the Asian crisis hit, and banks began calling in loans, Kim’s empire crumbled and South Korea sought a $58bn bailout from the IMF. His own “unhappy fate” was to flee overseas to avoid a criminal investigation, says the Nikkei Asian Review. When a Fortune reporter caught up with him in 2003, he found Kim to be a shadow of his former self: “a frail old man in loose trousers and bare feet”, chain-smoking Marlboro Lights.
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In 2005, Kim returned to Korea to face the music, receiving an eight-year prison sentence for accounting fraud. He was pardoned three years later and never fully accepted responsibility for Daewoo’s collapse, blaming “economic bureaucrats” for its downfall. The Daewoo brand name “has largely disappeared in South Korea”, says The New York Times. Still, Kim lives on in his way. “Dozens of executives” who began their careers with him and who still call themselves “Daewoo men” lead South Korean companies today.
