Seoul Man: A Memoir of Cars, Culture, Crisis, and Unexpected Hilarity Inside a Korean Corporate Titan (27 page)

And if you thought the U.S. military and federal bureaucracy love acronyms, well, you’ve never been to Korea. My wife Rebekah’s Korean staff at the U.S. embassy was amazed that she had never heard of “BGM,” as in “Who’s going to bring the BGM to the party?” That’s “background music,” of course. I bounced this off my Korean team members and, of course, they knew what BGM was. They asked: “Don’t you?” I said that, yes, Americans know of the concept of background music but we had never felt a need to come up with an abbreviation for it. Just doesn’t seem to come up in conversation that much.

Now, thanks to the ubiquity of smartphones, Asians are leading the way in all but eliminating written language. Texting apps got bigger faster in Asia than in the U.S. and are the preferred method of communication. As a journalist, I covered a lot of new technology, and I never saw “uptake,” or widespread acceptance of new technology, like I saw in Korea.

KakaoTalk launched as a free messaging app in Korea in March 2010. Within three years it was installed on 93 percent of the smartphones in Korea. American kids drive grown-ups crazy with text language—“SMH” and “LOL” and so on—but Asian kids and adults are way beyond that. They’re speaking in pictures only—emojis and the like. Americans use emojis to punctuate text conversations with clever little emotional icons. Asians are having entire text-free conversations in emojis only. The Japanese
messaging app Line allows users to type in text and Line translates it to a smiling face or frowning face: you type “Happy birthday” and it picks an image. I note that the logical extension of this trend means we’ll eventually be communicating feelings only, not ideas. My wife points out we’re returning to hieroglyphics.

In the end, when it came to “my” language, I still stood watch over official Hyundai documents, such as press releases. But in every other case I just went with the flow. I had spent my life using language to make a living, and chose that path because language fascinates me. It was interesting and usually fun to learn what foreigners were doing to English. It was mind-blowing to me that a Korean and, say, a Turk who each learned English as a second language might understand each other better than I would understand either of them when they spoke English. There’s a sort of global English out there, and native speakers must learn it to do business when they are away from home.

16

CAR OF THE YEAR

On the lunar calendar, which is observed throughout East Asia, 2012 was the Year of the Black Dragon. A rotation of twelve animals populates the lunar calendar, so the Year of the Dragon comes once every twelve years. In Chinese astrology, the dragon is the luckiest symbol. Once every sixty years, the Black Dragon appears, its rareness intensifying its power, or so goes the marketing spin. So, if you were a believer in the Chinese zodiac, 2012 should have been a very good year.

As it happened, 2012 was shaping up pretty well for me and for Hyundai. A little more than a year after my hiring, I was finally figuring out the folkways of Hyundai. I’d hired a Korean tutor to make an attempt at learning the language. Hyundai sales were up and the brand was humming along. I was learning how to manage my team, working with the more enthusiastic members and working around those I was simply unable to win over. During my first year and a half of marriage, I had spent more
waking time with my team leader, Ben, than I had with my wife. And like a couple that took a while to understand how to make their marriage work, Ben and I were starting to wear off each other’s rough edges and sync up better. I had made a couple good friends at work. Eunju was one of the only female executives at the Hyundai Motor Group. Both outsiders, she and I bonded pretty quickly. She was Korean but, as the daughter of a diplomat, had grown up and lived mostly overseas. She spoke Korean, but it wasn’t her best language. She had the cultural advantage at work that I did not have, but I had a gender advantage she did not have. She was direct and hilarious, and we had plenty of good meals together. The other was Jinho, probably the best friend I made at the company. A middle-aged manager, Jinho was soft-spoken and savvy. He had worked overseas for Hyundai and had a fine mastery of English. He helped me through many rough patches, from showing me how to make a winning PowerPoint presentation that would persuade my boss to approve an idea to dispensing sage career advice.

For the first time at Hyundai, I felt like an executive—that is to say, someone who leads and produces results.

The Black Dragon’s mojo started working for Hyundai almost from the very beginning of 2012. At the Detroit Auto Show in January—in the very hall where Hyundai had announced its upstart and improbable vision of becoming a premium automaker one year earlier—the Hyundai Elantra shocked everyone by winning the coveted North American Car of the Year award, one of the world’s most important auto prizes. I crowded into the basement of Cobo Center in downtown Detroit with about five hundred other auto industry types for the 7:30 a.m. awards ceremony, a yearly ritual in the U.S. auto industry. Everyone expected that the winner would be the Ford Focus parked in front of us, sitting beside the Elantra and the other finalist, a Volkswagen Passat.
The Focus had been the media darling of the season and received strong praise for its performance and handling.

I was so convinced we wouldn’t win that when the envelope was opened and the emcee said, “Hyundai Elantra!” I experienced a nanosecond of aphasia and was certain he’d said “Ford Focus!”

All two dozen or so Koreans in the room cheered. The rest of the room gasped. It was completely unexpected: everyone thought the Elantra was a B-plus car across the board, while the Focus had A-level road chops. But the jurors were impressed with Elantra’s overall package and premium features not found in similarly priced rivals, such as heated rear seats.

Elantra goes a long way toward explaining how different today’s Hyundai is from yesterday’s Hyundai and why the company has the ability to execute its upmarket strategy if it maintains its will. The Car of the Year Elantra was a pivot point between Hyundai, a car sales company, and Hyundai, a brand company. This award represented several big strides on Hyundai’s climb up the premium brand hill. The company’s wins were starting to accumulate into a noticeable pile. I started getting queries from automotive journalists suddenly keen to write about us. They all had the same questions: “How are you doing it? What is Hyundai’s special sauce?”

Elantra’s tale began in 2007, when Hyundai’s designers were battling with Hyundai’s formidable finance teams. Hyundai’s finance department almost always got the last word in any interdepartmental argument. That’s how Hyundai became one of the world’s most profitable automakers, according to
Forbes
and other business publications. To understand how impressive it was that the North American Car of the Year Elantra even existed, you need to realize that every car you see on the road from every automaker is a compromise between designers, engineers, and
product development teams. And then finance has its say. It is like this at every automaker.

To illustrate what I mean, I’ll exaggerate a bit for effect, but it’s not much of an exaggeration.

If automotive designers—at Hyundai, Ford, Fiat, wherever—had the last word, every car would look like the Batmobile. It would have $900 pavement-chewing, gas-guzzling twenty-two-inch tires. (Most car tires are about seventeen inches and you know what they cost.) The wheels would be pushed out to the edges of the chassis to create a wide, aggressive look, making it impossible to park. Every car would have a belt line—or the bottom of the side windows—raised so high that the windows would be mere slivers of glass, impossible to see out of but unquestionably sleek. It might have a matte finish instead of a glossy one. Great look, but you have to wash it by hand. Every production car would look like a futuristic concept car: gorgeous, but way too expensive and impractical.

If engineers had their way, every engine would be turbocharged and every suspension would handle like it belonged on a Formula 1 racer, partly because it used forward-looking radar to sense the road surface ahead and make driving-feel adjustments automatically. The car would be built with exotic, superstrong materials, making it safe and light. Inside, eye-tracking and gesture-recognition sensors would allow the driver to change songs, turn up the volume, and raise cabin temperature by looking at holographic logos on the windshield and waving their hand in front of the dashboard. At the Detroit Auto Show in 2013, Hyundai showed a concept car that had all these gesture- and eye-tracking gizmos. Someday your car will, too. But right now they’re too expensive.

It is the job of the product developers to bring the designers and engineers back down to earth to create a car that contains
as many of the features and cutting-edge pieces of technology as possible but remains cost-competitive with its rivals in its particular segment. The product developers will tell engineers, for instance, “We know you want a sealed underside to the car to decrease drag and gain incremental gas mileage, but doing so will push its price too high above its competitors. So, no.”

And it is the job of the finance teams to crush everyone’s dreams to keep the company’s overall profits high. Even at Hyundai, where the chairman is treated like a demigod, even he usually defers to Finance, because they’re the minders of profit and loss. It’s the rare case when the call comes from the top floor that overrides Finance.

In the case of the new Elantra, in 2007 the finance guys were telling the designers to simply give the car a less expensive face-lift and be done with it. The designers, meanwhile, were pushing for a complete redesign, like the Sonata was getting, based on the company’s new image-making Fluidic Sculpture design principles. Standard throughout the auto industry, cars get a complete makeover about once every five years, a time period known as a car’s “cycle.” About halfway through that cycle, cars get a “face-lift,” which usually means only a new grille, some new wheels and taillights, and maybe some new features inside. (America is the world’s only market that perpetuates the fiction of new models every year. Nowhere else in the world is a 2016 Honda Accord or 2017 Chevy Malibu marketed.)

A merely face-lifted Elantra would make cost sense. A complete redesign would be expensive and cut into the already thin profit margins that every automaker endures on their lowest-priced cars.

At every point in Hyundai’s history up to this moment, this decision would have been a slam-dunk for the finance guys: face-lift only. But not this time. Hyundai’s designers insisted. If Flu
idic Sculpture is truly going to be a brand design going forward, and if Hyundai really wanted to create a consistent family look—like Audi, BMW, Mercedes, and even Chevy—and if Hyundai really wanted to become a “modern premium” brand, Hyundai’s designers said, a simple face-lift on the Elantra would not do.

The problem was Elantra’s platform: the car frame, suspension, axles, and basic infrastructure. Hyundai’s designers said Elantra’s platform was too short to accept the bold, curving strokes and character lines that marked Hyundai’s new Fluidic Sculpture. Trying to apply Fluidic Sculpture to a face-lifted Elantra on the current platform would be a design disaster. Generally, customers do not buy ugly cars.

What was required was a new platform. Hyundai shares platforms with Kia to keep down costs, but a new platform—even if it’s shared with a sister car—is extraordinarily expensive. Many parts do not translate from one platform to the next. New platforms require new steel molds, new welding instructions for the robotic welders on an assembly line, new training for workers.

But Hyundai’s designers won the day. Top management decided to invest for the long run, making a real commitment to Fluidic Sculpture, “modern premium,” and—in the largest sense—brand elevation. Elantra’s styling was even bolder than Sonata’s. The deeply creased character lines flowed up the side length of the car and ran seamlessly into taillights that curved organically around the car’s rear corners. You were sure it was a coupe, from the aggressive angle of it, but saw four doors. And, through some alchemy of physics, the designers had given the Elantra—solidly slotted in the compact car segment—so much interior room that it was classified by the U.S. EPA as a midsize car, like Sonata.

It was Oh Suk-geun, Hyundai’s former chief designer at the time, who proudly told me the Elantra story along with a re
porter. A trim, smiling, slightly elfin figure with black-rimmed glasses who grew up loving Aston Martins, Oh was the father of the Fluidic Sculpture design. Up until then, he said, Hyundai had been a fast-follower company. This is how many Asian companies rose to prominence: copying an innovative product developed by another company and making it quickly and cheaply. But with the new Elantra, Oh said, Hyundai was proving it, too, could innovate. Korea was experiencing a pivot point, too. A generation earlier, Japan had evolved from fast follower to innovator. Now Korea, with its curved-screen Samsung TVs and design-leading cars, was taking the next step.

By 2012, when the Elantra’s product developers and designers were starting to figure out what the next version—which wouldn’t come out until at least 2015—would look like, they went through the customary process of benchmarking competitors to see what they needed to improve on the Elantra to bring it up to its rivals’ level. For the past forty years, Hyundai had gone through this process with every car, taking small steps toward the industry’s best cars but remaining far behind.

One of Elantra’s product executives told me about this process and said, “Now, when we’re benchmarking this Elantra, we can’t find any competitors.” It was said with a sort of amazement, not arrogance. This was how far Hyundai had come.

The decision to go all in on Elantra paid off in spades. Awards are nice, but they don’t sell cars. The product must sell itself. The new Fluidic Sculpture Elantra, which debuted in 2011, quickly became Hyundai’s best-selling car worldwide. It increased the previous Elantra’s selling power so much that, by the end of 2011,
Forbes
magazine reckoned the Elantra was the second best-selling car in the entire world, behind only the ubiquitous Toyota Corolla.