By on December 21, 2016

Dave Zuckowski, Hyundai

There’s room at the top at Hyundai Motor America after the sudden firing of CEO David Zuchowski, insider sources claim.

According to Automotive News, Zuchowski, who joined the company as sales chief in 2007 before taking the top job two years ago, didn’t achieve internal sales targets. As such, he’s reportedly out the door, replaced by an interim leader.

It might be hard finding someone to replicate Hyundai’s sizzling post-recession sales performance.

Sources close to the matter claim the automaker’s U.S. dealer body was informed of the firing last night, with company employees notified this morning. Until the automaker finds a replacement, executive vice president Jerry Flannery will take the helm of Hyundai’s American operations.

The automaker roared back from the recession with huge sales gains, but the rebound eventually dwindled. According to TTAC sales guru Timothy Cain, Hyundai’s U.S. sales increased 24 percent in 2010, 20 percent in 2011, and 9 percent in 2012. Sales then slowed, with 3 percent growth reported in 2013, 1 percent in 2014, and 5 percent last year. The past 11 months shows a 1.3 percent sales bump in a flat market.

Not bad for a challenging marketplace, but not good enough for the powers that be at Hyundai.

“Growth has stalled,” said Cain. “But that’s partly the nature of rapid growth. You can’t keep growing that way. And they had production limitations on crossovers that is improving.”

He adds that Hyundai’s incentive spending hovers around the industry average.

The automaker’s fuel-efficient small cars were a hit during a prolonged period of high gas prices, but things have changed. Passengers cars represent an ever-shrinking minority of new vehicle sales as pump prices remain low. And, while Hyundai’s crossover lineup continues to enjoy healthy sales increases, its small car lineup has taken a big hit.

Clearly, Zuchowski got the message, albeit too late. Last month, he announced two new utility models — a subcompact (due in 2018) and sub-subcompact crossover — as well as a revamp of existing models. The compact Tucson will grow slightly, while the Santa Fe Sport is due to grow in size and take on a more rugged look. The larger Santa Fe will grow into an eight-passenger model and ditch its name.

While this could indeed put wind in Hyundai’s sails, it seems the move comes too late to save Zuchowski’s job.

[Image: Hyundai Motor America]

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77 Comments on “Hyundai Fires Its American CEO for Not Keeping the Good Times Rolling: Report...”


  • avatar
    True_Blue

    It’s a canine cannibal world. Shows growth in a stagnant market, builds during a recession, “missed sales targets”, adios.

    • 0 avatar
      romanjetfighter

      Not only missed sales targets, but didn’t change the business model fast enough. How many of the buyers in 2009 returned since then? Probably not enough!

      http://www.autonews.com/article/20160523/RETAIL07/305239957/zuchowski-to-dealers%3A-get-with-the-times

  • avatar

    The upper trim 2006 Sonata in dark blue with beige interior looked good. The refresh made it look like a Buick and the redesigns looked like catfish. Can’t they go back to ripping off Audi?

    • 0 avatar
      a5ehren

      Gotta buy a Kia for that. Hyundai seems to be aiming for Toyota/Lexus.

    • 0 avatar
      gtemnykh

      The NF Sonata is definitely a very decent car. I’d argue the interior in them is actually a nicer place to be than a 07-11 Camry, at least in terms of material quality.

      A coworker has an ’09 4cyl. It’s had more than a few issues crop up once it crested 115k miles or so (trans control module, fuel pump, door handle, some suspension rattles) that gives me some pause, but a clean low mile V6 Limited would be tempting.

      As I recall the V6s don’t have limiters on them, a guy was caught on a speed camera going like 147mph in a rental V6 Sonata.

      • 0 avatar
        Coopdeville

        Coincidentally (or not), my extremely reliable to that point ’09 began falling apart at 110k. Suspension I blamed on deferred maintenance but some weird engine problems went undiagnosed even after several different mechs had a go at it. Regardless of that, it just didn’t *feel* like a car I wanted to dump long-term maintenance money into. I had no hesitation switching to Toyota.

        • 0 avatar
          gtemnykh

          Hmm similar sound experience then. My brother diagnosed an NF with a really scary unintended acceleration problem traced back to something in the transmission electronics (or a signal from trans?)

          There have also been some issues noted with rear control arm mounting points rotting prematurely.

          Too bad, I like the styling inside and out, and they are comfy cars to ride around in.

      • 0 avatar
        brettc

        We had a transmission control module failure 3 times on our 2001 Accent. We dumped it at about 40K miles and bought a Jetta TDI. I thought Hyundai had improved drastically since that 2001 Accent, but maybe not?

  • avatar
    whynot

    I think a big problem is Hyundai’s styling. It looked great when it was fresh and new, especially compared to many of Hyundai’s previous efforts.

    Now though? The problem with stylish and daring is it quickly gets old and looks ridiculous, dated, and ugly.

    They also really need to work on their suspension and steering feel. It still lags hard behind others.

  • avatar
    tonycd

    Hyundai’s revolving door for U.S. executives keeps revolving.

    They seem to be like baseball managers, hired to be fired. Methinks if I wer in line for one of those positions I’d think long and hard, and get a contractual guarantee of the money, before I’d say yes.

    • 0 avatar
      romanjetfighter

      They change so much and grow, it’s almost as if they think they need a someone with more experience to lead the now-different company in a new direction. Hyundai now has the Genesis brand.

    • 0 avatar
      JimZ

      I read it as they have a “glass ceiling” for non-Korean execs, similar to Japanese companies. If you get above a certain level, you’re either a useful bureaucrat (e.g. Jim Press @ Toyota) or needed to put a “Western” face on upcoming unpleasant cuts (Howard Stringer @ Sony.)

    • 0 avatar
      indi500fan

      In many ways, high level industrial execs ARE a lot like sports managers / head coaches. Once you attain that level and get fired, it’s much easier to find a job at a similar level somewhere else.

  • avatar
    DeadWeight

    This stuff is simple (really), yet auto executive, consulting & thinktank wunder-brains can’t grasp it.

    Hyundai (and Kia) have flatlined and lose market share for the following reasons:

    1) They are no longer competitive to Japanese & American makes/models in terms of price. PRICE MATTERS. When Hyundai was 86% as reliable, well trimmed, assembled and finished, with MORE standard features as Toyota, Honda (though Honda,’as I learned yesterday, has dropped like a rock in terms of reliability rankings), Mazda, at 70% of the segment-competing price, with a 10 year/100,000 mile warranty to help ease reliability doubts, their market share grew.

    Now that a Sonata is as much or more than an equivalently equipped Camry, Accord, etc., and the same is true of an Elantra, a Santa Fe, a Tucson, an Azera, to the competitor in the Toyota/Honda ranks, where’s the competitive advantage?

    2) Hyundai/Kia still can’t properly manage suspension geometry/tuning for whatever reason. Their vehicles are harsh when they shouldn’t be, wallow when it’s inappropriate, are floaty when it’s untimely, and have discordant suspension behavior between the front and rear wheels.

    3) The design and exterior aesthetics strides that Hyundai made from the 99s to late 2000s has either stopped, or in some cases, reversed course with some truly bizarre styling elements (one could plausibly argue that in other cases, such as the nee Sonata, the current gen is worse than the last gen, which managed to clearly leapfrog the Accord and Camry).

    4) Not only has Hyundai reliability not improved, on a relative basis, since the late 2000s, Hyundai and Kia have earned a popular perception of giving owners a hard time on honoring warranty claims.

    This $hit is not complicated. I realize Hyundai (and Kia, owned in part by Hyundai) is a large bureaucratic Chaebol, but it can’t possibly be slower and more layered than Toyota in terms of decision-making.

    Now pay me 11 million per year, plus large stock grants annually, and a huge pension plan/golden parachute, and require all underlings to bow deeply to me before and after each discussion, and I will grow Hyundai’s market share rapidly.

    • 0 avatar
      whynot

      It feels weird to agree 100% with everything DW is saying.

      • 0 avatar
        tonycd

        whynot, I was thinking exactly the same thing.

        Not that the U.S. CEO was ever empowered by the actual powers in Seoul to do a damn thing about most of it.

      • 0 avatar
        gtemnykh

        Haha yep, I wanted to write out the exact same thought but DW beat me to it.

        What’s the impetus to buy Korean when they’re missing the value quotient? The vast majority of people will pick the “Honda” or “Toyota” badge instinctively when price/features are equal. Guaranteed resale, a reputation for reliability (even if the Hyundai turns out to be equally well built over the long haul).

        • 0 avatar
          yamahog

          I owned an Elantra and that thing was a hassle. I had more problems in 20k miles with the Elantra than my family has had in 400k miles of Toyotas (A highlander, first gen Tundra, and my LS).

          Water pump had a defective bearing, seized caliper, a roll bar came undone, it rattled really badly below 0, and the reverse gear worked intermittently or would grind a few times before choosing to work. And it was a total PITA to work on compared to a toyota – the underbody cladding was held on with self tapping screws, they used 4 different bolt sizes where toyota might use 2, but the sheet metal was excellent and the paint was pretty good.

      • 0 avatar
        Adam Tonge

        DW is a smart man. He just gets angry sometimes.

        • 0 avatar
          DeadWeight

          My New Year’s Resolution is two-fold: 1) To finally figure out “what it all means,” and 2) Dial down the rage in response to what I view as total incompetence and incompetent people (which/who will always be present).

        • 0 avatar
          Eyeflyistheeye

          All of the regulars at TTAC are pretty intelligent people. As for pleasant, well-mannered, open-minded, unbiased… I’ll leave that up to others to judge for themselves.

    • 0 avatar
      DeadWeight

      I have no fixed paradigm by which my views on any given subject have to conform and be filtered trough, like mashed potatoes.

      I’m truly an independent and free thinker.

      I judge each and every case, question or issue based upon fiercely rational constructs.

    • 0 avatar
      VoGo

      Hyundai’s biggest problem is that they insufficiently anticipated the crossover market. CR-V, RAV-4 and Escape have grown while Hyundai watched. No one cares about sedans anymore.

      • 0 avatar
        romanjetfighter

        Not as badly as VW. They have many variants and their trims span many markets and target a wide range of customers.

      • 0 avatar
        DeadWeight

        VoGo, they have the crossover bases covered and have for some time.

        They could TRY and go into premium Audi/Lexus/Acura territory with one larger than the Santa Fe with a price tag to match, but I’m not so sure that would generate significant additional units of sales for them, annually, and it is a tall order at this point given their relatively poor popular perception/branding (they are struggling with the launch of the Lexus-fighter Genesis/G90 crap for the same reasons).

        They have the Tuscon, Santa Fe, and Veracruz, which is as many as Honda has (HRV, CRV, Pilot).

    • 0 avatar
      SCE to AUX

      Hyundai market share:
      2011 = 5.1%
      2012 = 4.9%
      2013 = 4.6%
      2014 = 4.4%
      2015 = 4.4%
      2016 YTD = 4.5%

      Mr. Zuchowski got the axe for Hyundai’s performance, not Kia’s. Kia’s market share is virtually unchanged (not growing, to be sure), but Hyundai has given up over 10% of their piece of the pie in 5 years.

      Kia market share:
      2011 = 3.8%
      2012 = 3.8%
      2013 = 3.4%
      2014 = 3.5%
      2015 = 3.6%
      2016 YTD = 3.7%

      • 0 avatar
        jthorner

        SCE to AUX should have written the original TTAC article. The author missed the fact that Hyundai’s market share has dropped and instead focused on sales growth. Growing slower than the competition in a hot market is indeed a way for the US CEO to get fired, especially when his background is on the sales side of the house.

    • 0 avatar
      xtoyota

      DEADWEIGHT….You don’t know what your talking about… I have owned several different Hyundai models since 2004 and Never Had Warranty work on them…Several friends also own Hyundai products and have experienced no problems other then standard maintenance….
      As far as suspension problems they are no worse than most cars
      I can write a book about Toyota and their fantastic quality and how wonderful they
      honor warranty problems…………..
      I DON”T THINK YOU EVER DROVE ANY OF THE CARS IN THE HYUNDAI LINE UP
      Talk is cheap and you do a good job at that

      • 0 avatar
        yamahog

        Dude,

        I owned a Hyundai and it was terrible – it had more time in the shop and more failures than 400k miles across 3 Toyotas in my family – a brand new 2008 Elantra.

        You’re welcome to disagree with DW or me or anyone else but you’re crazy if you think Hyundai is Toyota’s quality peer.

        • 0 avatar
          Jagboi

          co-worker of mine had a 2012 Santa Fe. At 35,000 km it literally ground to a halt at the side of the road with crankshaft failure. Dealer put in a replacement short block, but messed up the transmission somehow (didn’t support it properly during the engine removal was my guess) and a week after being returned from the replacement engine it was in for a replacement transmission when that failed. A week after it was returned the fuel pump failed. Then he sold it and bought an Escape as he had no confidence in the Hyundai anymore.

          At first the dealer tried to blame him and deny warranty coverage, but he had always had it dealer serviced on schedule, so was harder to wiggle out of covering an obvious failure. It left a bad taste anyway.

      • 0 avatar
        JimZ

        you need to take a cursory look at statistics, and realize that you having one or two good examples doesn’t mean the population as a whole is the same.

  • avatar
    White Shadow

    Does the guy in the picture have Trump-inspired hair or what?

  • avatar
    PRNDLOL

    Carpet doesn’t match the drapes.

  • avatar
    romanjetfighter

    Customers can now afford mainstream and even luxury brands. They don’t need to go for value brands. Gas is cheap and they just announced two subcompacts and invested so much into hybrids. Low profit margins. Dependent on volume. Fail. Not to mention the EPA fuel economy scandal. They also went conservative on the designs of some models. Maybe they’ll get a CEO who has connections to the Trump team and cut a deal. Like a few more plants in exchange for lowered tariffs and huge tax breaks.

  • avatar
    OldManPants

    I hate to see anyone with a Polish name get canned.

    • 0 avatar
      DeadWeight

      You say Czarnina, they say Seonjiguk 선지국

      • 0 avatar
        JimZ

        coincidentally I just got back from H-town with the family’s haul of kiełbasa krajana and mielona and pierogi.

        • 0 avatar
          DeadWeight

          I’m not Polish, but I have friends who are, as well as straight-up Italian, Jewish, Greek, Lebanese (all Christian for some reason, likely because they are 2nd and 3rd gen), Armenian, Turkish, and mutts of all kinds of mixes.

          People outside Michigan would be shocked at the diversity of the metro-Detroit area. And with that comes some genuinely awesome authentic restaurants, bakeries, etc. – the Korean and Polish restaurant/bakery scene is hopping in the 15 mile & Dequindre area.

          • 0 avatar
            JimZ

            Lebanon has a large Maronite Catholic population, and a lot of them came here. A lot of the Mediterranean delis outside of Dearborn and Hamtramck are Catholic owned.

          • 0 avatar
            Adam Tonge

            Most Maronites have left Lebanon. I guess there are still half a million or so, but the population is way less than it was.

          • 0 avatar
            Adam Tonge

            When we going to lunch DW? I’ve mostly been working by Sterling Heights Assembly Plant lately. Let’s grab a sub at Ventimiglia Market or get some pirogi over at 15 and dequindre.

          • 0 avatar
            JimZ

            ah, Wawel. I need to get back there sometime; but rarely have an excuse to eat out. I’ve settled on Srodek’s on Jos. Campau for my kiełbasa ever since Markowycz’s closed a few years ago, but Polish Market right across from Wawel has some good varieties.

          • 0 avatar
            DeadWeight

            Chung Ki Wa

            Polish Village Cafe

            Star Deli

            Steve’s Back Room

            Pegasus (I so miss Laikon)

            Central Kitchen

            Mabel Gray

          • 0 avatar
            Adam Tonge

            I’m always down for some Chung Ki Wa

          • 0 avatar
            JimZ

            can I come?

            ;)

          • 0 avatar
            AoLetsGo

            I’m not Polish either but when we go visit my cousin with advanced MS at Oakmont we always get some Polish food near 15/Dequindre. It does not compare to the home cooked Ukaraine and Russian food we get at the older relatives but not bad. My small company booked out Mabel Grey for our Chistmas Party and it was amazing.

    • 0 avatar
      Zackman

      “I hate to see anyone with a Polish name get canned.”

      You’re just talking about one guy.

      At least it’s better than what the Russians and Germans did to the entire country!

  • avatar
    mmreeses

    an ‘expat executive’ (Trump hairdo guy) can only do so much.

    Hyundai is pushing to be premium when the public clearly doesn’t feel the same way.

    Need another crossover.

    Hyundai’s picked all the low-hanging fruit for sales. need to convert the faithful Honda, Toyota, Ford, Chevy, Dodge buyers. that ain’t easy.

  • avatar
    Turbo Is Black Magic

    I’m sure he got a nice golden parachute. Enjoy retired life Dave.

  • avatar
    eggsalad

    Step 1 might be to sell its cars with $%^&(&* spare tires in them. I get that eliminating it games the MSRP and curb weight, but it just looks cheap as heck.

    Step 2 might be to fix the dealers. This time last year, I was negotiating with a dealer on a leftover ’15 Accent Sport. The lot was full of ’16s already. They blew the deal by NOT giving me the “spare tire kit” at their cost. That ’15 sat on their lot until August of ’16.

    • 0 avatar
      SCE to AUX

      I paid full price for a donut spare in my Optima Hybrid, and the dealer absolutely wouldn’t throw it in to make the sale. I already had a good deal (25% off MSRP), so I caved. No regrets, but a slightly bitter taste.

  • avatar
    RedRocket

    Hyundai is a shitty company, to be blunt. They make disposable cars and once things start to go wrong, you are on your own. Their warranty claim record is terrible, though that may in part be due to their shady dealers as much as corporate. But they both do their best to weasel out of taking responsibility when things break.

  • avatar
    EX35

    I owned a 2004 Hyundai Elantra. Terrible car where I had to threaten to file a lemon car suit just to get the dealerships (I went through three) to honor warranty repairs. Never again.

  • avatar
    nickoo

    I would buy a hyuandai genesys if the price were right, but the price ain’t right. I would rather buy a chrysler 300 and save $$$ for a very nice car.

  • avatar
    OldManPants

    They seem to be doing OK in China. They and Kia combined sell 9 different models of SUV there.

    koreaherald.com/view.php?ud=20161018000811

  • avatar
    brn

    From about 2005 to 2014, Hyundai made great strides. They went from pretty much junk (We had dealers for both and Kia was definitely higher quality) to being highly competitive with other brands. During that rise, they were the media darling.

    Since then, they’ve managed (at best) to stay with the competition. What they are doing no longer stands out. The media still likes Hyundai, but the praise isn’t at the same level.

    This is why Hyundai sales have leveled off and David Zuchowski isn’t to blame.

    • 0 avatar
      RedRocket

      When Krafcik was the US CEO he wined and dined auto “journalists” like it was his day job, and perhaps it was. That was how they got such favorable reviews for such ordinary cars. I think a lot of those stories were written from the private Hyundai box at Dodger Stadium or the Staples Center. Add in numerous junkets with plenty of swag, food, booze and god knows what else and the resulting coverage was no surprise. He also came up with the genius move of paying people to post positive comments on sites like this.

  • avatar
    namstrap

    A few months back my old car died, and I started looking for a small hatchback. I found a 2006 Hyundai Accent Sport on a used car lot and bought it. It’s the 2005 body style, but it’s registered as a 2006. So far so good. I’ve only had to replace a defective brake light switch. I’m impressed with how it runs and how it rides.
    A local auto parts store had a fleet of them, some with over 400,000 km on them. Hopefully mine will be as reliable.

    • 0 avatar
      brn

      We’re talking anecdotal after a few months? My Turn!

      Not a few months. I picked up my 2000 Mercury brand new. It still looks and runs great. Aside from maintenance (brakes, tires, battery, etc), it’s had a wheel bearing and the alternator replaced. Sold it to my neighbor a couple of years ago. The only thing he’s done is de-fog the headlights.

      We did trade in our other 1997 Mercury three years ago. 200,000 miles and aside from maintenance, we paid way too much for some suspension work. It’s a beast otherwise. Traded it in for a 2010 Mercury with 90,000 (135,000 now). Did have to put $18 into the 2010 last year for a sensor. Hinting at the need for exhaust work in the next couple of years.

      I’ve put 70,000 on my other car (Ford) so far. $22 for a windshield washer pump (POS pump should last longer than that). Looks and drives so well, that it’s indistinguishable from brand new (even the motor is still clean).

      Anecdotal is fun.

      As much of a doodle as I’m being, I really do hope your Hyundai treats you well. Cars are generally a lot better than they used to be. I suspect you’re a pretty good person and I wish you the best. The is just internet forum banter.

  • avatar
    Richard Chen

    Getting deja vu from this Businessweek back in 2008 (https://www.bloomberg.com/news/articles/2008-03-05/my-way-or-the-highway-at-hyundai):

    “For years, executives in the U.S. have been telling their counterparts in Seoul that the two brands are not strong enough to sell for much above the price range of $12,000 to $25,000. But their warnings have been ignored. Chung believes that going upscale is essential for Hyundai and Kia. The weak dollar has hurt profits, and concessions made to the Korean unions are eroding the company’s cost advantage. So both Hyundai and Kia have launched a slate of vehicles priced near or above $30,000. In 2005, for example, Kia released the Amanti (Ahn’s limo) with a mandate to sell 20,000 a year.

    The company didn’t come close to hitting that number, selling just 5,500 of the sedans, priced between $25,000 and $30,000, last year. Still, nobody expects Chung to heed the advice of some American managers and pull back. “The top-down management style hasn’t changed at Hyundai,” says Lee Hang Koo, auto industry specialist at the Korea Institute for Industrial Economics & Trade. “This is bound to lead to cultural clashes with Americans. We’ve seen management churn in the past, and there’s no reason to believe it will stop.”

  • avatar
    BobinPgh

    Donald with a goatee! Looks like his next job will be in Washington.

  • avatar
    Zackman

    I would have fired the guy, too. Goatees went out with Mark McGuire, plus goatees make you look like a scumbag on just about any level.

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