Memorable milestones
When founding Daewoo from a textile trading company in late 1967, Kim Woo Choong showed himself to be an ambitious but somewhat overzealous businessman in wanting to play an important role in shaping global trade. Kim kicked off her ambition by jumping into the field of exporting textiles and makeup to the US market.
Kim’s goal is to gain a huge share of the small quota cake that the US has for Korea after only 5 years of Daewoo accounting for 1/3 of the total quota that the US granted to Korea. Kim Woo Choong became a powerful quota distributor.
By 1976 Kim had in hand 11 companies from textiles, garments, finance, machinery to cosmetics. Daewoo or Kim Woo Choong has quickly become a miniature representative image of the rising Korean economy rising to become an Asian tiger.
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By the mid-1980s, Korea entered a catastrophic “price drop” crisis of most of the items. At this time, Korean officials proposed that bringing down Kim Woo Choong’s empire would be as easy as throwing away a pen because at this time Kim Woo Choong’s shipbuilding factory and a number of other companies were on the verge of bankruptcy. product.
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Mr. Kim is relaxing in Vietnam when Interpol was searching. |
However, knowing in advance that Kim had gone abroad to hide, he did not let special agents The government envoy was recalled to the country. When the situation calmed down, Kim returned pledging to soon hand over to more talented managers. But when the economy recovered, Kim’s expansionist ambitions resurfaced.
Encouraged him to enter the auto market. Daewoo participated in an adventure with General Motors (GM) and “taunted” this group by presenting projects and then canceling them. Intoxicated with the ambition to expand and dominate the world, Kim Woo Choong severed his connection with the government and also forgot his promise to shift investment and resign.
Entering the last years of the 90s, Daewoo faced pressure to reform, and secondly. die. A former Seoul bank director who was once a partner of this group said: “At Samsung Group, collective opinion is always highly valued and second is continuous innovation. At Daewoo, the management team has never held a discussion on how we will innovate. It’s all up to Mr. Kim to decide.”
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Daewoo assets – Who buys and sells?
Under pressure to restructure the group in April 1998, Kim decided to sell a number of valuable assets. 7 5 billion USD (including the Shipbuilding Enterprise that he greatly appreciates) to focus more on the automobile and financial business. But Daewoo’s problem is that “no one really wants to buy what they want to sell, no one even bothers to ask the price,” said Lee Namuh, director of a Samsung branch.
Daewoo wants to sell the Shipbuilding Enterprise to a Japanese company for about 4 billion USD. However, this company is planning to cut back because it “consumes” too much capital. Daewoo sold 2 Hilton hotels: a Hilton located in central Seoul for 250 million USD and a Hilton in Kyongju for nearly 180 million USD. Once again, no tycoons or investors showed any interest. The problem here is that the price does not match the real value: an “sky-high” price.
“Daewoo has never had its own brand. They have never been a leader in any field. They also do not invest much in developmental research. Hyundai probably has more debt than Daewoo, but they have real strength, a brand and have invested quite thoughtfully to have optimal technology. You cannot sell at such an unrealistic price,” Mr. Hunsaker said.
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The powerful man is now in the dark under siege by the press and police. |
When searching for buyers of huge assets That became a “needle in a haystack” Daewoo turned to offer to cooperate and share profits with partners. Kim Woo Choong asked Samsung to buy the electronics factory, but Samsung politely refused has no intention of expanding. “The only reason Samsung wants to buy Daewoo Electronics Enterprise is to completely eliminate it,” said a banker in Seoul.
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Canh final silver
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One When unable to assert its strength by selling or transferring assets, it is obvious that Daewoo is teetering on the brink of a financial crisis. To cover up, Mr. Kim announced that Daewoo had earned 10 billion USD after launching shares on the Korean market (accounting for 80% of the total value of shares traded on the Korean stock exchange).
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Intentional amplification and urging of the Government forced Korean banks to open their wallets to lend more than 20 million won to this group. As a result, domestic banks were “half alive” when Daewoo was forced to declare bankruptcy.
< p class="MsoNormal" style="MARGIN:0 0 0">Korean banks are “turning a blind eye” while foreign investors are almost on the sidelines. In fact, there are Korean chaebols (State-owned corporations) that are sought after by foreign investors and invest an amount of more than 50% of the existing capital or more, while Daewoo only receives less than 5%. investments in all areas are being implemented.
The truth revealed
Kim Woo Choong affirmed that Korean president Kim Dae Jung and some other forces asked him to hide his debts to complete the 1999 restructuring with the promise that he would not have to face any court. If there are any problems, he will continue to return and continue to run the Daewoo automobile group. “The president told me exactly that on the phone before it all ended a short time later,” Mr. Kim said in an interview with Fortune magazine.
Mr. Kim added another surprise when he declared on Fortune that his departure was “not Trump’s announcement in 1999 was given the green light by the Government, specifically current President Kim Dae Jung. The President advised Mr. Kim: “Leave Korea and lie low until the political atmosphere clears.” The heat surrounding Daewoo’s collapse subsides.”
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All believe that: “No country will allow a large enterprise like Daewoo to go bankrupt. The collapse of a large chaebol like Daewoo will create negative public opinion about its financial potential. Reinforcing this belief is an announcement from Industry Minister Kang: “Chairman Kim promised to make twice as much effort to cut reduce Daewoo’s debts to an acceptable level: from the current 527% to 200% by the end of 1999 according to the government’s request.
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The Government’s generous support with the desire to revive the world’s most powerful industry has helped him Kim obtained preferential loans “indiscriminately” and did not pay attention to efficiency. A strategy that is more destructive than constructive has been cultivated by the Government for more than 30 consecutive years.
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Last episode: Daewoo and its consequences
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< b style="mso-bidi-font-weight:normal">Tan Long
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