By on December 27, 2013

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Automotive News reports that Hyundai CEO John Krafcik will be stepping down from his post as of January 1st, at the completion of his contract. While this would normally be the sort of thing reported by TTAC Staff, Krafcik has been as influential as former EIC’s Bertel Schmitt and Ed Niedermeyer in my understanding of the auto industry.

A month after I was hired on at TTAC, I was tasked with my first press trip as a representative of the publication. The event was the first drive of the Hyundai Genesis Coupe, and it was made clear that I would have to be on my absolute best behavior. Both Bertel and Ed were well acquainted with Krafcik, and a number of Hyundai execs could be counted among the “silent majority” of TTAC readers who check in every day without participating in the comments. This event, according to Bertel, was not one where I would simply blend into the background as another nameless journalist on one of many waves attending the event.

Far from the overly chipper and polished CEO archetype that can be found in the industry, Krafcik always displayed a genuine warmth and interest in people, regardless of their reputation or standing. He was especially patient with me as I struggled to bring myself up to speed on the business and regulatory elements of the car world. Despite his busy schedule, Krafcik would often respond to my short email questions with a lengthy and detailed lesson via telephone as a means of helping to explain the granular side of the industry. Without him, I would not have anywhere near the sort of grasp I do on areas like CAFE, alternative powertrains and the way product planning decisions are made. These lessons have been extremely illuminating for me, and without them, the quality of my work would not be the same.

On behalf of everyone at TTAC, we wish him the best in his future endeavors.

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35 Comments on “TTAC Salutes John Krafcik...”


  • avatar
    Pch101

    Krafcik was part of the team that produced the research for James Womack’s “The Machine That Changed the World,” which studied the benefits of lean production and the Toyota Production System.

    That experience surely played a role in transforming Hyundai’s reputation in the US from being a Korean Lada to a credible player in the import market. But the company has had a tough time in the US during 2013, so it should be interesting to see what happens.

  • avatar
    Lie2me

    Sounds like a good man and a credit to the auto industry

  • avatar
    WaftableTorque

    What amazed me about Mr. Krafcik was his lack of hubris. That normally wouldn’t be a big deal, except it’s a sorely lacking trait among automotive executives. Every time I listen to him on TV, I feel like he not only knows what he’s talking about, but that he knows the limitations of what his organization is capable of and doesn’t try to pull ambitious plans that require back pedaling later. I get the same impression of humility from the interviews I see of Peter Schreyer at Kia. Hopefully the next organization that recruits his talents recognize that you can lead effectively and still be a good person.

    • 0 avatar
      jz78817

      Kim Dan-Ak… er, I mean Dan Akerson… could stand to learn by his example (and that of Mulally.)

      But he wouldn’t, ‘cos he knows everything he needs to already.

      Did Krafcik get put on the list to succeed Ballmer at Microsoft?

    • 0 avatar
      JD321

      Kraficik is a scientist and can reckon physical reality unlike the know-nothing-parasite/lying “perception is reality” MBA sociopaths.

      • 0 avatar
        Pch101

        Er, Krafcik got a masters in management at Sloan (MIT.) In other words, an MBA.

        • 0 avatar
          jz78817

          He’s a degreed mechanical engineer who also has an MBA, which is fine. And actually, if you’re going to rise to the level he has, then you pretty much need to have an MBA.

          The types we sneer at are the empty suits like Akerson or “Minimum” Bob Nardelli whose entire education is in business and management and have little to no technical background whatsoever.

          Which is not to say you can’t succeed at this job if you don’t have a technical background; Bob Lutz is a marketing guy but he’s also a “car guy” who knows when to shut up and listen to his people.

          • 0 avatar
            Pch101

            I seriously doubt that the poster to whom I replied is in much of a position to judge the management of a hot dog cart, let alone an automotive company.

            Engineers do a fine job of building and destroying automotive companies, depending upon the business. There’s no shortage of them, and they can blamed for some spectacular failures.

            In the auto industry, the main enemy of management is complacency. Success ruined GM — it made them smug and overconfident, leaving them too proud to address a changing environment. The old GM was packed to the gills with engineers, and they were part of the problem.

  • avatar
    jz78817

    I remember in the months leading up to the Equus launch, Autoblog ran a piece with a “reader-submitted” photo of an uncamouflaged Equus.

    They were stupid enough to initially write that the photo was “snapped by Autoblog reader Alex Krafcik” and after I and several others called them on it in the comments, they went back and redacted it to “Autoblog reader Alex.”

    Total weak sauce.

  • avatar
    tonycd

    Given Hyundai’s previous reputation for a managerial revolving door, it would be a shame if Mr. Krafcik’s departure means he’s taking the fall for a slow sales year.

    • 0 avatar
      James2

      From what I gather the big bosses in Korea decided to cap production in order to improve quality. Hyundai’s North American plants are already pretty much maxed out, so no big sales gains were possible.

  • avatar
    Big Al from Oz

    @tonycd
    In any instituitionalised organisation such as large corporations the ‘revolving door’ you talk about is good. Especially at the upper rank structure.

    What this achieves, is it doesn’t allow for the cultural rot to set in like what happened to the Big 3 in Detroit and the UAW.

    This is one of the reasons why in military organisations (and governments) command positions are continually in flux.

    Another added benefit is that John Krafcik can put his expertise to use in a completely different business, even if the business is based on a completely different product.

    A transfer of his knowledge and gaining new knowledge can benefit most and himself.

    Just look at Nissan, a Titan with a Cummins, who would have ever thought?

    • 0 avatar
      jz78817

      “What this achieves, is it doesn’t allow for the cultural rot to set in like what happened to the Big 3 in Detroit and the UAW.

      This is one of the reasons why in military organisations (and governments) command positions are continually in flux.”

      Except it was the military style thinking of the “Whiz kids” that led to the legendary Ford fiefdoms and silos. The notion of “you work in this department, you do what you’re told and nothing else” almost killed Ford. And it’s part of what’s going to kill the Japanese electronics industry.

      • 0 avatar
        Big Al from Oz

        @jz8817
        Have you or do you work in the military?

        How it works is like this, it’s quite simple.

        A large corporation requires policies in order for it to function.

        Policies are set by upper management through consultation with the ‘lower’ levels of management. An important aspect of middle and lower management is to liaise with the person on the ‘coal face’ and collect data and formulate methods to meet the policy set out by upper management.

        The ‘toilers’ on the ‘coal face’ operate by instruction, instructions are generally made by the middle managers and pushed up for approval. The upper managers who are responsible for policy, accept or deny these instructions, ensuring they meet the policy or aims of the company.

        The military operates exactly the same as any large corporation in that respect. I’m in the military and I’m termed a manager, it’s my job.

        So, to put it tersely, the top defines direction. The bottom finds way to achieve it. The middle designs a plausible way to achieve the desired results.

        A good person at the top shouldn’t be there to long, as I pointed out sometimes undesirable aspects of their behaviour can alter what goes on below.

        This is a basic model I just presented. Levels of authority is totally reliant on delegation of approval. This also impact any organisation, poor culture can be had if the wrong level or poor manager is placed in the chain or at the given authority when he/she hasn’t the attributes to make good decision.

        This is how the military works, anyway the one I work for. Everyone contributes from the bottom to the top. Everyone is valued.

        It might surprise you how it works. In some ways it is harder to work in the military, but is inefficient as you always have to consider redundancy, which isn’t as big a problem with a ‘civilian’ operation.

    • 0 avatar
      GiddyHitch

      Seems like that revolving door at the top is really working out for GM. Someone should really push old man Buffett out of the driver’s seat at Berkshire Hathaway post haste to unlock some really good returns there for once. /s

      Turnover and infusion of new blood is only a good prescription for a sickly corporation lacking direction and good ideas (hi, GM!). Otherwise, deepening an understanding of one’s business and industry, and execution of long term business plans is something that only comes with continuity in the C-suite.

      • 0 avatar
        tonycd

        Totally agree with your second paragraph, Giddy.

        To see how well a car company runs under the leadership of the itinerant “executive class” that doesn’t come from or understand the auto industry, one need only look to Nardelli at Chrysler or Akerson at GM. Mulally has succeeded at Ford, but it’s noteworthy he at least came in with an engineering background.

      • 0 avatar
        DC Bruce

        I think “Big Al” makes a good point, which you miss. The point is, by nature, we are all prisoners of our own success. GM is as good an example as one could find of this phenomenon. A company’s leader figures out (or lucks into) the formula for success. It works, but because most companies function in a dynamic environment, eventually the formula stops working. “Deepening an understanding of one’s business and industry” beyond a certain point, is a formula for failure. Because that business and industry inevitably will change, for any number of predictable and unpredictable reasons.

        Mr. Big Shot — who devised the formula based on a deep understanding of the business and industry as it existed at that time — is captured by the mental process that created the formula. Even if he recognizes that the formula is not working — which certainly is not always the case — he can’t figure out what to do about it.

        That’s why he needs to be replaced, ideally before the formula stops working.

    • 0 avatar
      billfrombuckhead

      Those that can, do. Those who can’t, teach. ROFL

  • avatar
    VoGo

    Derek,
    Good for you for being a mensch and complementing Krafcik for being a stand-up guy! I look forward to seeing his success in future challenges.

  • avatar
    mitchw

    So this news quietly comes out on a Friday afternoon between Xmas and New Years, and JK wasn’t axed? When few people are paying attention and fewer journalists are working? No drawn out farewell to JK and installation of the new dear leader? Yeah right. They showed John the door. I’ll bet it was the 40mpg claim problem that got him; it hurt the brand with owners.

    • 0 avatar
      jz78817

      if that’s the case, then they’re stupid. their bread-and-butter products are at the end of their cycles, so naturally sales will drop. I don’t know exactly how much of it’s directly attributable to Krafcik, but Hyundai/Kia went from purveyors of junk to credible competitors in one product cycle after he took over HMA.

    • 0 avatar
      GiddyHitch

      It is curious timing indeed, but the first sentence of the article says that his contract is ending. Presumably, Hyundai tried to re-up him but perhaps he’s trying to parley his success there into a more prestigious gig. Or “spend more time with his family.”

      • 0 avatar
        jz78817

        I don’t know how similar Korean business culture is to Japanese business culture, but it’s entirely possible he saw he had no higher to rise in Hyundai because he’s not Korean.

        as much as I dislike the personality type, people who get to that level of management are nothing if not ambitious, and if they see that they don’t have a shot at the top, they leave. Same reason Mulally left Boeing.

        • 0 avatar
          LALoser

          I do not know about Korean automakers, but I have worked with,not for, Korean contractors in several Asian countries, and they are “difficult” at best. The higher-ups can never be questioned, and like the Communist Chinese, a signed contract is still subject to “interpretation”. In the west we would be shocked by the wrong demands, “value engineering”, and disregard of project harmony.
          I have been in more than one scope meeting in PI, Thailand, South Africa and others when a proposal was opened from a Korean company…it was looked at, and promptly dumped in the waste bin.

        • 0 avatar
          Pch101

          “I don’t know how similar Korean business culture is to Japanese business culture”

          The stereotype: all of the hierarchy of the Japanese, but without any of the consensus building. Almost certainly a challenging environment for an American, let alone anyone else.

  • avatar
    Atum

    Sounds like a good guy. Hyundais have been improving and selling tremendously since he came along.

    Now, Wagoner for GM. He was FABULOUS (obvious sarcasm). I accidentally thought the GM CEO in the late 2000’s was named Robert Farago, but that’s a guy here. Oops.

  • avatar
    tekdemon

    I suspect it’s all fallout from the EPA rating scandal but I wonder if Krafcik was really responsible or more the fall guy for something planned by Korean HQ

  • avatar
    WhiskerDaVinci

    Does anyone actually know why he left? I’m not trying to sound snarky, I get speculation haha. I’m just genuinely curious why he left. It seems clear that the EPA scandal was part of it, but maybe there’s more to it than that?

  • avatar
    AGR

    Considering the state of flux of upper management prior to Krafcik, its been miraculous that he lasted so long. The changes have always been sudden, abrupt, at the last minute. They are upholding the tradition.

    Interesting that in Canada, the same guy has been there for decades.

    Besides improving their product, Hyundai has enjoyed several opportunistic events directed in their favor during the past few years. While the future presents a harsher reality.

    From Automotive News on Dave Zuchowski’s appointment to replace Krafcik:

    His appointment, hailed by dealers, puts a more sales-oriented executive at the helm of Hyundai’s U.S. operations at a time when its volume growth is trailing the overall market.

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