Sleazy Presidential Scandal Leads to Restructuring Rumors at Hyundai

Matt Posky
by Matt Posky
sleazy presidential scandal leads to restructuring rumors at hyundai

Hyundai Motor Group has received added attention from investors this week over expectations that the family-run business could undergo a major reorganization into a public holding, with the same separate, multifaceted structure as Hyundai Heavy Industries.

News spread that Hyundai Motor could be preparing a restructuring campaign after it issued a disclosure statement last Friday that explained it would be charging Hyundai Steel and Hyundai Glovis Co. 13.9 billion won ($12.4 million) for the use of the Hyundai brand name. This is the first time the company has ever collected from either over the use of its corporate trademark.

It’s uncharacteristic of the automaker, but seeking royalties from companies operating under major holding entities is routine and may be the first step in Hyundai’s changing structure. Under the plan assumed by industry watchers like WardsAuto, Hyundai Mobis, which currently holds the largest stake in Hyundai Motor Group, would be converted into a holding entity — potentially shifting ownership.

However, the Chung family, who founded and maintain control the Korean company, could keep its ownership of the multi-business organization by holding the majority of shares in Hyundai Mobis. In fact, it would actually be easier for the Chung family to simply increase their stake in Hyundai Mobis while it’s still so much cheaper than Hyundai Motor’s. Of course, there is some minor speculation that the trio of Hyundai Motor Co., Hyundai Mobis, and Kia Motors could each be slit into holding and operating entities before being merged into one.

South Korea’s National Assembly is strongly encouraging various family-controlled conglomerates — including Hyundai — to reorganize into better regulated and more transparent organizations. Ideally, the country wants an emphasis on shareholder control and corporate responsibility. This added pressure stems from the recent impeachment of South Korea’s former president Park Geun-Hye, following news that some family-owned groups contributed massive donations to charities in exchange for special favors. Hyundai is among several companies that underwent investigation after the scandal’s emergence.

While the alleged misconduct hasn’t helped Hyundai’s image, speculation over the possible restructuring has driven up the stock prices of all three of its major affiliates this week.

[Image: Hyundai Motor Co.]

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  • Corey Lewis Corey Lewis on Mar 23, 2017

    Koreans are so entrenched in their major 4-5 home market conglomerate brands, this sort of ding in reputation means very little.

    • See 2 previous
    • Aquaticko Aquaticko on Mar 23, 2017

      @Corey Lewis That's due to the way South Korea developed. The government told big businesses to do x. y, and/or z, and big businesses did it in exchange for cheap credit. We talk about wealth concentration being in the hands of a few individuals in the Anglo-Saxon world; in South Korea, it's in the hands of a few corporations, with Samsung (surprise) being far and away the wealthiest, followed by Hyundai and LG, then Lotte and Hanjin (last I heard. Basically all of the country's wealth is in the hands of a few corporations.

  • Corey Lewis Corey Lewis on Mar 23, 2017

    "This is the first time the company has ever collected from either over the use of its corporate trademark." I'm going to charge myself millions... and then move it from account A to account C.

  • Jeff S Some of us don't care either way we are not into this type of car. Most of these will be stored in garages waiting for their value to go up. As someone above noted this is an old body style which is retro 70s Challenger which after researching it came out in the 2008 MY which means a long run for a model that is in its 16th year. I have always liked these but if I bought one I would not spend this kind of money on one probably get the V-6 version and use it as a family car but then I am not into drag racing or muscle cars. For the type of car it is it has a decent rear seat and not too bad of a trunk. Most of us are not going to spend 100k for any vehicle at least currently so its not something most of us will buy and stick in a garage waiting for its value to increase. I am glad that these editions came out for those who can afford them and it keeps a little more color into what has become a very dull vehicle market but then with age I pick the dull appliance like reliable vehicle because that's what I need. Impressive car but not for me.
  • Jonathan The Germans. So organized they can appear disorganized. I agree with some others, classic names like Thunderbird, Imperial, Grand Prix, Ambassador etc. just have more appeal.
  • Bobbysirhan A friend had one when they first came out. He was CFO of some green California company and could charge the Volt at work. At home, the PHEV gave him an excuse to make his wife park her nicer car outdoors while the Volt get their condo's one-car garage. He liked the Volt, and he spent very little on energy during the 'first one's free!' era of EV ownership. Of course, the green company went bust soon after, and he wound up with a job that involved far more driving and ultimately the need for a more substantial car. I drove the Volt once after his wife had made a return trip to Los Angeles, depleting the battery. I don't know what a first gen Volt drives like with a charged battery, but it was really gutless with two adults, a yellow lab, and a dead battery. My other memory of it was that it had a really cramped back seat for a car that was about as large as a Civic. My friend who bought it liked it though, and that's not always been the case for GM vehicles.
  • MrIcky I think the Shakedown is more my speed of the last call editions- but this is impressive.
  • Dukeisduke I tried watching the live reveal last night, but after 15 minutes of jawing by MT+ personalities (and yes, I like Chris Jacobs and Alex Taylor), I turned it off.