Is Hyundai doing another daewoo

Zappo · 29th March 2006, 15:29

And more importantly, was Subbu's exit a well planned one by the man himself because he had a lot of insider info into the state of matters?

In the last two days things have gone from bad to worse at Hyundai Motors, South Korea. The things started happening within 48hrs of Subbu's separation anouncement. For those who are unaware Hyundai Motors, SK the global headquarters of the Hyundai Motors have been raided by the Federal Prosecutors under the charges of massive corruption and embezzlement. Since then things are moving fast and furious. Top execs of Hyundai have been banned from overseas travel. Their CEO has been arrested besides some other executives who were already detained earlier. The latest is that the prosecutors seem to have unearthed a can of worms as more and more slush funds are being unearthed with every passing day. They are now expanding their scopes of investigation. All these comes on top of the news that Hyundai has recorded flat growth in its European car sales.

In View of these facts do you think that Hyundai may be getting down a dark abyss? Could this be the start of a fall of another promising auto manufacturer? And... was Subbu's exit really a fortuitous event or is there more to all these than meets the eye?

Zappo · 29th March 2006, 16:25

Whoa! No response?!! I was wondering why no one has as yet posted this flaring issue... and now that I have no response! What happened people?

kb100 · 29th March 2006, 16:35

This is a shocker!!...

But these things like slush finds are things which no company can do without I'm sure!... Especially when dealing with beaurocracy nothing works like greasing does!

suman · 29th March 2006, 16:40

Zappo my friend, don't be too disheartened with the lack of responses, I guess we're a little shell-shocked by this news that's all! Our local Hyundai reputation will take a battering big time once this news circulates I guess. But, as you said, a timely departure and well planned it seems!

Zappo · 29th March 2006, 16:58

I am just afraid of one thing... it all begins like this. A embezzlement charge somewhere... palm greasing... something innocuous to begin with. And soon it becomes an unstoppable avalanche. Look at the behemoths around the world... Enron, Arthur Andersson... they all did a lot of cover up... and carried on for years till someone got wise to it. And then once it starts the whole ship sinks

Zappo · 29th March 2006, 17:04

Quote:

Originally Posted by kb100

This is a shocker!!...

But these things like slush finds are things which no company can do without I'm sure!... Especially when dealing with beaurocracy nothing works like greasing does!

Yes... but all that works only as long as you are out of the reaches of the law. Once the law catches up the excuses like "without kickbacks nothing gets done" do not hold any water.

Till two days back I was wondering why Subbu left in such a huff wo any clear comments on his future plans or even a proper send-off from Hyundai. Now I know... Subbu obviously wanted to get out before the inferno started gulping down everything. Normally the news of a crackdown on a sysmbol of sovereign pride (like Hyundai is for SK) is not let out till things reach a pass. I am sure the internal problems and probes must have started at least a month before or even earlier. Subbu definitely knew all these because of his position and decided to call it quits when he finally knew that there was nothing left to salvage and that the news will now get out soon.

GTO · 29th March 2006, 17:36

Zappo,

Its a simple case of "bribing". Which major auto manufacturer doesnt? I am by no means attesting this action but it is a harsh reality. Yes, Hyundai is in trouble but to answer the question of this thread - An Astounding NO!!

GTO

ghostrider4385 · 29th March 2006, 17:50

Personally, I don't think the quitting of Subbu is going to help him any. His timely departure from the company is pretty much going to raise questions both inside and outside the company. Which will then lead to enquiries, raids et. al. at his residence, bank, yada, yada. And am pretty sure it IS gonna open just as big a can of worms for him too!

Something similar happened to someone else too. Martha Steward if i'm not wrong. Different industry but same reason. And sure as hell gonna lead to the same consequence.

Godspeed.

Alok.

kausu · 29th March 2006, 18:10

if all this is true then...hyundai is goin to go down the drain for sure...the thing is that i have a hyundai accent and i was thinkin of spending on it...like exterior and performance mods..but now am not sure if i should spend on it or sell it in time!!!!!!

Wheeliej · 29th March 2006, 18:49

In my last company, I had worked in the Asia Pacific office and had to deal with Korean companies. The experience with Korean companies made me decide not to buy any Korean products. Most people do not believe me since they feel that Korean products are good and cheap, but believe me, the amount of corruption and dishonesty I have seen there is truly unbelievable.

busted · 29th March 2006, 19:13

I am just afraid of one thing... it all begins like this.

spadival · 29th March 2006, 19:46

Just an observation.. There have been pages and pages written about Fiat's troubles, here in the forum and elsewhere.

But nobody seems to talk about Ford,GM and now Hyundai's troubles!

Possibly because there won't be any car left to buy if we base our car buying decision on co's financial reputation!

s0uljah · 29th March 2006, 20:35

Quote:

Originally Posted by kb100

This is a shocker!!...

But these things like slush finds are things which no company can do without I'm sure!... Especially when dealing with beaurocracy nothing works like greasing does!

I mean, TATA is the good clean honest company and all, but you think they are on top of the country today because they do clean business ?? Hehe, come on guys. Scams everywhere !!

But getting back to the topic a bit.... I think Hyundai might pull through this, but you never know. Daewooooooops!!

pingme · 30th March 2006, 10:38

I beleive there is a difference, Fiat, Ford and Gm are in trouble due to heavy labor, insurance bills and profits etc. While Hundai here is in trouble due to all wrong reasons!

Financial issues like profit, wagebill etc can be controled not the law! Remember Enron & MCI debacle?

my 0.02 cents

Quote:

Originally Posted by spadival

Just an observation.. There have been pages and pages written about Fiat's troubles, here in the forum and elsewhere.

But nobody seems to talk about Ford,GM and now Hyundai's troubles!

Possibly because there won't be any car left to buy if we base our car buying decision on co's financial reputation!

himanshugoswami · 30th March 2006, 11:04

Quote:

Originally Posted by s0uljah

I mean, TATA is the good clean honest company and all, but you think they are on top of the country today because they do clean business ?? Hehe, come on guys. Scams everywhere !!

But getting back to the topic a bit.... I think Hyundai might pull through this, but you never know. Daewooooooops!!

Agreed, but there is one fundamental difference.

If hyundai goes bust, for indian consumers it is a real bad deal because these guys will just shut shop and leave, a la, Daewoo.

Since Hyundai is a Chaebol in SK, the FIs and the Govt. will do some restructuring and bail out the company for the sake of the economy of the country. Cause hyundai going bust would hit the economyof SK very hard.

In a restructuring, or a strategic sale, the Indian operations may be left out- again a la Daewoo.

However, if TATA were to be in a similar situation, the Indian consumers can at least be assured that tey would be the first ones to get support. It tis the international operations of TATA that would be closed first.

Plus any restructing of TATA would ensure operations continue in India cause whoever buys the assets would make money only if the factories churn out products.

(It is a different matter altogether that if TATA went bust, the Indian economy may nosedive!)

so I guess there is some merit after all in "Be Indian, Buy Indian!"

29th March 2006, 15:29	#1
Zappo Team-BHP Support Join Date: Oct 2005 Location: Hyderabad Posts: 5,922 Thanked: 2,699 Times	Is Hyundai doing another Daewoo? And more importantly, was Subbu's exit a well planned one by the man himself because he had a lot of insider info into the state of matters? In the last two days things have gone from bad to worse at Hyundai Motors, South Korea. The things started happening within 48hrs of Subbu's separation anouncement. For those who are unaware Hyundai Motors, SK the global headquarters of the Hyundai Motors have been raided by the Federal Prosecutors under the charges of massive corruption and embezzlement. Since then things are moving fast and furious. Top execs of Hyundai have been banned from overseas travel. Their CEO has been arrested besides some other executives who were already detained earlier. The latest is that the prosecutors seem to have unearthed a can of worms as more and more slush funds are being unearthed with every passing day. They are now expanding their scopes of investigation. All these comes on top of the news that Hyundai has recorded flat growth in its European car sales. In View of these facts do you think that Hyundai may be getting down a dark abyss? Could this be the start of a fall of another promising auto manufacturer? And... was Subbu's exit really a fortuitous event or is there more to all these than meets the eye?
	() Thanks

29th March 2006, 16:25	#2
Zappo Team-BHP Support Join Date: Oct 2005 Location: Hyderabad Posts: 5,922 Thanked: 2,699 Times	Whoa! No response?!! I was wondering why no one has as yet posted this flaring issue... and now that I have no response! What happened people?
	() Thanks

29th March 2006, 16:35	#3
kb100 Senior - BHPian Join Date: Feb 2006 Location: Bangy Boy! Posts: 1,555 Thanked: 21 Times	This is a shocker!!... But these things like slush finds are things which no company can do without I'm sure!... Especially when dealing with beaurocracy nothing works like greasing does!
	() Thanks

29th March 2006, 16:40	#4
suman Senior - BHPian Join Date: Sep 2005 Location: Kolkata Posts: 4,589 Thanked: 279 Times View My Garage	Zappo my friend, don't be too disheartened with the lack of responses, I guess we're a little shell-shocked by this news that's all! Our local Hyundai reputation will take a battering big time once this news circulates I guess. But, as you said, a timely departure and well planned it seems!
	() Thanks

29th March 2006, 16:58	#5
Zappo Team-BHP Support Join Date: Oct 2005 Location: Hyderabad Posts: 5,922 Thanked: 2,699 Times	I am just afraid of one thing... it all begins like this. A embezzlement charge somewhere... palm greasing... something innocuous to begin with. And soon it becomes an unstoppable avalanche. Look at the behemoths around the world... Enron, Arthur Andersson... they all did a lot of cover up... and carried on for years till someone got wise to it. And then once it starts the whole ship sinks
	() Thanks

29th March 2006, 17:36	#7
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,512 Thanked: 300,697 Times View My Garage	Zappo, Its a simple case of "bribing". Which major auto manufacturer doesnt? I am by no means attesting this action but it is a harsh reality. Yes, Hyundai is in trouble but to answer the question of this thread - An Astounding NO!! GTO
	() Thanks

29th March 2006, 17:50	#8
ghostrider4385 BHPian Join Date: Dec 2005 Location: Hyderabad Posts: 389 Thanked: 12 Times	Personally, I don't think the quitting of Subbu is going to help him any. His timely departure from the company is pretty much going to raise questions both inside and outside the company. Which will then lead to enquiries, raids et. al. at his residence, bank, yada, yada. And am pretty sure it IS gonna open just as big a can of worms for him too! Something similar happened to someone else too. Martha Steward if i'm not wrong. Different industry but same reason. And sure as hell gonna lead to the same consequence. Godspeed. Alok.
	() Thanks

29th March 2006, 18:10	#9
kausu BHPian Join Date: May 2005 Location: MUMBAI Posts: 55 Thanked: 28 Times	if all this is true then...hyundai is goin to go down the drain for sure...the thing is that i have a hyundai accent and i was thinkin of spending on it...like exterior and performance mods..but now am not sure if i should spend on it or sell it in time!!!!!!
	() Thanks

29th March 2006, 18:49	#10
Wheeliej BHPian Join Date: Mar 2006 Location: Bangalore Posts: 284 Thanked: 47 Times	Hyundai In my last company, I had worked in the Asia Pacific office and had to deal with Korean companies. The experience with Korean companies made me decide not to buy any Korean products. Most people do not believe me since they feel that Korean products are good and cheap, but believe me, the amount of corruption and dishonesty I have seen there is truly unbelievable.
	() Thanks

29th March 2006, 19:13	#11
busted BANNED Join Date: Mar 2006 Location: new delhi Posts: 41 Thanked: 0 Times View My Garage	I am just afraid of one thing... it all begins like this.
	() Thanks

29th March 2006, 19:46	#12
spadival Senior - BHPian Join Date: Oct 2004 Location: Melbourne, AU Posts: 1,773 Thanked: 26 Times View My Garage	Just an observation.. There have been pages and pages written about Fiat's troubles, here in the forum and elsewhere. But nobody seems to talk about Ford,GM and now Hyundai's troubles! Possibly because there won't be any car left to buy if we base our car buying decision on co's financial reputation!
	() Thanks