SEOUL - The drive to reorganize the Hyundai Group and its main holding, Hyundai Motor Co., has taken a bizarre twist with the founder and controlling shareholder announcing he and his two sons would step down from active management.
But his eldest son, chairman of the automaker, responded with a quick refusal: Stepping down, he said, was unthinkable.
The drama began unfolding on May 31, when Chung Ju-Yung, the group's 84-year-old founder and honorary chairman, announced he and his two sons, 64-year-old Mong-Koo and 51-year-old Mong-Hun, would accede to government pressure to separate ownership of the company's big corporations from management and step down.
The announcement, which followed the release earlier in the day of a plan to restructure the sprawling chaebol, or conglomerate, was unexpected.
'In view of current trends and the future of our economy, the time has come for individual (Hyundai) units to take on an independent professional management system that will allow them to stand on their own. Professional management will be the only way for them to survive international competition,' the statement said.
Mong-Koo's office, eight floors below the senior Chung's 15th-floor office in Hyundai's headquarters in downtown Seoul, promptly issued a statement of its own.
'In order to make Hyundai Motor Co. one of the world's most competitive automakers,' it said, 'Chairman Mong-Koo is going to devote himself to managing the company as a professional.'
According to a company spokesman, Mong-Koo's decision to remain in office was supported by six of eight directors who were asked for a vote of confidence.
But Han Kumhee, an automotive analyst for Merrill Lynch International in Seoul, said Mong-Koo's defiance of his father is unlikely to last.
She said. 'He's vulnerable to pressure because he holds just a 4 percent stake in the motor company, compared with the 9 percent his father owns.'
Mong-Koo's most likely successor is Lee Kye-Ahn, president of Hyundai Motor, she said. Although Lee lacks longtime automotive experience, she said, he is highly regarded for his managerial acumen.
'Many would view Mong-Koo's resignation as a very positive development for Hyundai Motor,' Han said.
'This may not happen overnight, but the separation of ownership and management is inevitable. This will be good news because Hyundai Motor will finally be run as an automotive company, not as part of a chaebol.'