The Hyundai Founder Who Put a Country on His Back

Chung Ju-yung built Hyundai because he refused to be stopped. He is known for turning Hyundai into an industrial force that helped transform South Korea. The company built highways, ships, cars, and entire industries. At its peak, Hyundai accounted for 16% of South Korea’s economic output. This episode explores how Chung built Hyundai, how he helped power South Korea’s rise, and how hunger, guilt, discipline, and relentless persistence shaped a man who refused to stop when the path disappeared. ------ Timestamps: (00:00) Introduction (02:40) Running Away from Home (12:15) A Lesson from Bedbugs (17:36) His First Auto Repair Shop (21:22) The Beginning of Hyundai (26:09) The Impact of the Korean War (30:12) The Goryeong Bridge (37:20) Trust and the Korean Government (49:31) Competence Over Connections (55:13) Building a Nation (01:03:00) Building During the Vietnam War (01:10:00) Soyang River Dam (01:14:55) Building an Expressway (01:23:14) Time to Start Making Cars… (01:34:24) …And Ships (01:47:04) The Secret Bid for Jubail (01:57:35) The 1988 Olympics (02:01:33) The Chung Family Dynamic (02:05:00) The Government Crackdown (02:10:00) Crossing the DMZ (02:12:06) Diligence Will Overcome all Difficulties ------ Newsletter: The Brain Food newsletter delivers actionable insights and thoughtful ideas every Sunday. It takes 5 minutes to read, and it’s completely free. Learn more and sign up at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠fs.blog/newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ------ Follow Shane Parrish: X: ⁠⁠⁠⁠⁠⁠https://x.com/shaneparrish⁠ Insta: ⁠https://www.instagram.com/farnamstreet/⁠ LinkedIn: ⁠https://www.linkedin.com/in/shane-parrish-050a2183/⁠ ------ Thank you to the sponsors for this episode: +CoinShares: Delivering Reason to Digital Asset Investing. ⁠https://coinshares.com/⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:00Speaker 01

  On June 16th, 1998, an 82-year-old man climbed into the lead vehicle of a convoy of 50 trucks loaded with cattle. Behind him were 500 cows raised on a farm he'd reclaimed from the Yellow Sea. As the cows passed, Buddhist monks chanted, and women in traditional handbok dresses lined the road, waving as the convoy rolled through the last village before the razor wire barrier separating North and South Korea. The man in the lead vehicle was Chung Ju Young, the founder of Hyundai. He was the first South Korean civilian to cross the border since the country was split in half. Four months later, he came back with 501 cows, 1,001 cows total, one for the cow that he had stolen from his father 65 years earlier, and 1,000 for interest.

• 0:49Speaker 01

  Chung was so determined to change his situation that as a teenager he stole a cow so he could sell it to buy a train ticket out of the farming village where he was born in what is now North Korea. He left in the middle of the night, told no one, not even his father, and arrived in Seoul with only a sixth grade education and no connections. In order to survive, he swept floors, hauled freight on the docks, ran a rice shop, and even fixed cars. Of course, this was all before he built Hyundai, but you can start to see the type of person he was. While many people think of Hyundai as a car company, at its peak, it accounted for 16% of South Korea's entire economic output.

• 1:34Speaker 01

  It built the highways that connected the country, the ships that carried its goods, and the cars that so famously announced Korea's arrival to the world. Zhu Young wasn't an inventor or a theorist. What he was, more than anything, was a force. He was a person who could not be stopped. Welcome to Outliers. I'm your host, Shane Parrish.

• 1:57Speaker 01

  Today, we're going to explore the incredible life of Cheng Ju Young. And it's one of the craziest stories I have ever heard in my life. This is the story of a man who refused to be stopped. No matter the circumstances, no matter the obstacles, he simply would not quit. He was so poor at one point, he's eating tree bark, and so rich near the end of his life that he's in the top 10 in the world. And in between these, he created entire industries and put an entire country on his back. One quick note before we get started. This is a longer episode, and I kind of like this format. It lets me go below the surface, beyond the sound bites, into the mindset and details that really matter. Let's dive in. In the village where Cheng Ju Young was born, the children ran home from school during the day to go to the bathroom because their family needed the feces.

• 2:48Speaker 01

  Human waste was the primary fertilizer for the dry fields, and in a bad year, a few extra contributions from a small child could mean the difference between eating through the winter and not. Chung was born in 1915 in a small northeast corner of what is now known as North Korea. At the time, it was just Korea, and Korea did not belong to the Koreans. Five years earlier, Japan had taken the whole Korean peninsula, and what they did to the farmers was brutal. Japan seized the land through a paperwork trick. Korean farmers held their land by custom, not by deed, so when the colonial government demanded written proof of ownership, most of them had none. Overnight, everything changed.

• 3:30Speaker 01

  Suddenly, they were landless. By the time Chung was a teenager, Japanese settlers owned more than half the farmland in Korea. Korean families now worked as tenants on the same land they had once owned. Rent took more than half of the harvest. Taxes took around a quarter. A family kept maybe a quarter of what they grew, and that wasn't enough to survive on. Japan shipped the best crops home, rice especially, to feed its own population. Koreans ended up eating sourgum, a coarse grain they had previously used to feed their cattle. Historians later measured Korean heights from the 1920s to the 1950s. The average Korean kept getting shorter, year after year, a little smaller than before. Cheng's father farmed about three and a half acres. That sounds pretty manageable until you realize those fields had to feed a family of 10 through winter using farming techniques that hadn't changed in centuries.

• 4:23Speaker 01

  In a good year, the harvest lasted through long winter and into spring. In a bad year, the food ran out halfway. And there were a lot of bad years. Here's how Chung describes it himself. Back in those days, farming families were so poor that words cannot capture their suffering and destruction. After harsh winters, we would completely run out of food by the time spring arrived. From then on, we barely managed to stay alive by eating tree bark and grassroots and wild herbs. He had to eat tree bark just to survive. That's crazy, but it gets worse. Chung recalled his parents' arguments. I still vividly remember that my parents' arguments were always about food. Their arguments would become more and more heated until the table was overturned and the food ended up on the floor.

• 5:09Speaker 01

  Under Japanese colonial rule, Cheng inherited two things from his parents. Let's start with his father. The man knew one thing, how to work. Cheng described him as a man who farmed from birth to death, head to toe. He didn't say much. Cheng wrote, even when working beside him all day, I heard him speak at most three or four words. His father's total assets, as his son recorded them, were a healthy body and a diligent character. He worked from sunup to sundown every single day, with no exceptions and no holidays. As the eldest son, Cheng was expected beside him in the fields after school until dark. In Korean life, the eldest son was the pillar. If the pillar fell, the whole house fell. His father understood this in his bones and organized his entire life around it.

• 5:54Speaker 01

  By seventh grade, Chung was no longer in school at all. He was farming full time. His father was training him patiently and relentlessly to become exactly what he himself was. From his mother, he got something else. She was ferociously competitive. If the other woman in the village weeded one row, she weeded two. If they wove a certain amount of silk, she would not stop until she had outproduced every one of them. Cheng absorbed all of it, the work ethic from his father, the refusal to lose from his mother, but in Cheng, they fused into one. Later in life, he would describe himself as having an addiction to proving limits wrong. He took deep, genuine joy in being able to say, I did, when everyone around him was telling him he can't. But something darker was happening in those fields.

• 6:41Speaker 01

  Chung was not just learning from his father, he was watching him fail. The hardest working man Chung knew could not feed his family through the winter. The discipline that should have been enough wasn't, and the boy noticed. While working these rows he thought to himself, Will I always be a farmer and never straighten my crooked back? A farmer who will never feel full for even a day a life like this to suffer.

• 7:06Speaker 01

  Like my toiling father. Is that all there is? It was not all there is, but getting out would cost him more than he knew. Cheng ran away from home four times. His father caught him the first three times and dragged him back. The fourth time, Cheng slipped out in darkness and never returned. The first time he was 16, he had just finished elementary school when he read a newspaper article about construction work in Sheizen, a port city on the far northeast coast of what is now North Korea. It was a four-day boat ride away. He had no money for the boat, so he decided to walk 250 kilometers through the mountains. He had made it. He had found work on a construction site and labored for two months before his father showed up and ordered him home. But something had shifted in him. For the first time in his life, he had earned his own wage and found his own way.

• 7:55Speaker 01

  He had felt what it was like to do real physical work and get paid for it. He went home with his father, but he went home a different person than the one who had left. The second time he was 17, and the destination was Seoul, the center of everything. He set out with two companions, and on the road, a man promised them employment and stole their money instead. Penniless and stranded, they gave up, and his father found them at his grandfather's house along the route. Getting conned was humiliating, but it was also an education. It would make Chung unusually careful about who he trusted for the rest of his life. The third attempt is the one that became legend. To finance it, Chung stole one of his father's cows, sold it for 71, and bought a train ticket to Seoul. And you need to understand what a cow meant in poor Korean farming household in the 1930s.

• 8:44Speaker 01

  A cow wasn't just livestock. A cow plowed the fields and hauled goods. A cow represented years of accumulated savings and food. Selling it was the equivalent of mortgaging the farm's future, and Chung did it without telling his father. He reached Seoul, enrolled in a bookkeeping academy, and set out to become an accountant. Things went well for about two months. And then his father found out. What happened next is one of the most devastating passages in Chung's autobiography. His father crouched down in front of him in the dirt and wept. And then he said this Are there any parents in this world who don't want their children to be successful? If you are successful enough to bring your parents and siblings to soul and look after them, why would this old man hold you back? But you better not forget what you are.

• 9:31Speaker 01

  Just a farm boy who only finished the sixth grade. I hear Seoul is crawling with unemployed graduates of vocational schools, but you, what are you? A nobody. And a nobody like you isn't going to make it. You will throw our family out into the streets, blindly chasing after this stupid dream. I am old now, so you need to be responsible for looking out for the family. Since you refuse, we're going to have to turn to begging.

• 9:58Speaker 01

  Sit with that for a second because the father was not wrong. This was Korea in the 1930s, in the middle of a global depression. Seoul was full of unemployed men, most of them far more educated than Chung. And here was his eldest son, the designated pillar of the family, a teenager with a sixth grade education who had stolen the family cow to attend a school he could barely afford. Chung's father saw the situation with painful clarity. The son saw farther, but neither of them knew that yet. Cheng later wrote, Even today, I get a lump in my throat when I recall my weeping father crouched down as he uttered these words.

• 10:38Speaker 01

  He went home with his father and threw himself into the farmer, trying to repay his guilt through effort. He resolved to accept his fate and be the best farmer he could be. He even bought land to expand the family's holdings. He was going to be the pillar his father needed him to be. But then another bad harvest hit. The food ran out again, and his parents started fighting. Chung wrote, I murmured, I can't take this anymore. Any fleeting resolution to remain on that farm evaporated. I was determined to go to Seoul and succeed. The fourth attempt was the one that worked. He left at night without a word with a friend who was fleeing a forced marriage.

• 11:17Speaker 01

  Two young men slipping out of their old lives in the same darkness, each escaping a different trap. This time, Chung did not steal. He borrowed the train fare from a friend. He hated owing anyone anything, even briefly, but he hated the alternative even more. This time his father did not come looking for him. And here's the thing most people miss about this sequence it's not a story about a restless young man who wanted more.

• 11:42Speaker 01

  It's a story about guilt. Every time Cheng ran, he knew it was costing his family. Every time his father dragged him back, the debt got heavier. And by the fourth escape, that guilt was welded to him. He carried it for the rest of his life. 65 years later, when he drove a thousand and one cows across the demilitarized zone, he was still trying to pay it off. For now though, Cheng Ju Yung was 19 years old, alone in the largest city in Korea with borrowed money in his pocket and a sixth grade education to his name. He had escaped, but the question was, now what? Seoul was not what he imagined. His biography describes it with no romance at all. He started at Ancient Harbor, working the docks as a day laborer, hauling freight. When the dock work dried up, he moved to construction. When that ended, he went to a starch syrup factory.

• 12:29Speaker 01

  He took whatever job would keep him fed for another week. And he was always looking for something better. As he later reflected, the sad reality of farming is that no matter how much one struggles, the payoff never equals the amount of work put in. What he was discovering now was that the city was not automatically better. It was just differently brutal. The work was there, but it was crushing. And the margin between making it and not making it was razor thin. He was still just barely scraping by. And it was during this stretch, sleeping in a bunkhouse, that Chung encountered something that would stay with him for the rest of his life. And it was, of all things, an insect. The bunkhouse was infested with bedbugs. The workers tried everything to escape them. They moved off the floor and slept on the dining room tables instead.

• 13:17Speaker 01

  They put pots of water under the table legs so the bugs couldn't climb up. It worked for a night or two, and then one evening they turned on the lights and saw the bed bugs crawling along the walls. They had climbed all the way to the ceiling and they were dropping down from above directly onto their sleeping bodies. Here's how Chung described the moment in his autobiography. And it's remarkable. To this day, I cannot forget the shiver down my spine that I felt back then. This made me stop in my tracks and think. Even bedbugs think long and hard and use every bit of energy they have to achieve their goal. And ultimately, they succeed. I'm no bed bug. I'm a man. These bedbugs can surely teach a man a few lessons. If these bedbugs can do it, why can't we men do it? We just need to stick to it and not quit.

• 14:03Speaker 01

  We need to emulate these bedbugs. He added, whenever I tell people that it was the bed bugs that taught me nothing is impossible if one puts in one's best effort, they think I'm exaggerating. But this really is the truth. You could hear that and think it's a cute anecdote. An old billionaire looking back and giving credit to an unlikely teacher. But I think it's a bit more than that. I think the bedbug story tells you exactly how his mind worked. He was lying in a bunkhouse, exhausted, bitten, broke, still carrying all this guilt from running away. And instead of seeing pests, he saw a philosophy. The bugs didn't stop. They didn't accept the obstacle. They found another route. The lesson he drew was not complicated. Don't stop. When the path is blocked, keep going until the thing is done.

• 14:48Speaker 01

  And he would apply this principle for the rest of his life.

• 14:52Speaker 01

  First, to entire industries and eventually to an entire country. He landed a position as a delivery boy at a rice shop. Part of his pay was a bag of rice every month. And he later said this was the first time he felt like he had made it because he knew he would not go hungry again. But there was one problem. When the owner hired him, he asked Chung if he could ride a bicycle. Chung, of course, said yes, but it was alive. And it was the first recorded instance that I could find of Chung Juyung agreeing to do something he had absolutely no idea how to do, and then figuring it out afterward, it would certainly not be the last. He taught himself to ride a bike within days, and then he went to work on the shop itself. He was the first to arrive every morning. He swept the entrance, he sprinkled water on dry days to keep the dust down.

• 15:38Speaker 01

  He did everything he could think of to make the shop run better than it had before he had walked in. The owner's son was lazy, which probably made Chung's intensity stand out even more sharply. And the owner noticed. Six months later, when the owner became ill, he handed Chung this door. The first thing Chung did was to rename it. He called it the I'm gonna get this wrong. So you can laugh at my pronunciation, but he called it the

• 16:03Speaker 01

  Kunjil Rice Store, which translates into number one in Seoul. Think about that for a second. Six months before he was a delivery boy, and now he had just taken over the shop through pure force of will and almost pathological frugality. And the first thing he did was rename it number one in soul. You can see where his mind was already operating. The ambition had nothing to do with rice. And here's what I think happened during these years and why they matter to everything that comes next. Chung had almost nothing. He had no money, he had no education, he had no connections. But what he did have was work ethic and his frugality. He was doing the things anyone could do, the things the shop owner's son could have been doing, but chose not to do, the things that you could do with a willingness to show up and nothing else.

• 16:47Speaker 01

  The things you do when you're desperate, not when you're comfortable. By 1938, he was his own boss. He had a business, he had customers, and he was growing. He started hiring friends to deliver all the rice he was selling. He would later write that this brief window was the only time in his life he ever felt rich, which seems almost incomprehensible given that by 1996 he was the ninth richest person. But that tells you something important about how he was wired. Things did not stay stable for long. In 1939, Japanese colonial authorities imposed rice rationing. They requisitioned every private rice shop in the country. Korean private rice trading was effectively finished overnight. Years of work gone. Not because he had failed, but because someone with more power decided he was not allowed to keep what he had built. It was the first time the world would take something from him, but it would not be the last.

• 17:37Speaker 01

  The next year he was back in business. Chung took out a 3,000 won loan and bought an existing car repair shop. There was one small problem. He had no idea how to fix cars. As he put it later, it just seemed like a good business. So he handled the customer service side and learned the trade from his mechanic friends, which is another way of saying he talked to people and watched them carefully. That had been his method since the rice shop, and it would stay his method for the next six decades. He noticed something almost immediately, and it came hidden inside a customer complaint. Seoul had only a handful of auto repair shops at the time, and they were all terrible. They all overcharged. They were slow and unreliable. The average shop took 10 days to return a car, 10 days in a city where car was one of the most valuable things a person could own.

• 18:24Speaker 01

  Chung saw the problem and solution immediately. Customers didn't actually mind the price. What they couldn't stand was losing their car for 10 days. So he built the entire shop around speed. His shop averaged three days for a repair job and he charged a premium for it. And customers gladly lined up around the block. The volume his shop was doing meant his mechanics got more practice than anyone else in Seoul, which made them improve faster, which brought in more customers, which made them finish still faster. It was a virtuous circle, and Chung was spinning it deliberately. He also personally memorized every single auto part in a car, every single one. That detail is going to matter later in a way that neither he nor anyone else could have guessed. Business was booming, but then a fire destroyed everything. The shop, the customers' cars inside of it, everything was gone.

• 19:12Speaker 01

  Chung was left holding debt on a business that no longer existed and on vehicles that had been reduced to ash. His first move was to turn to his employees and say, hey, it's okay. The building was old anyway. And then he went straight back to his lender. The argument he made was so direct that I want you to hear it exactly as he says it in the book. The fire burned everything down. Now I have nothing but debt. If I stop now, there's no way I can pay you back. Sir, I beg you, give me another chance to set this right. He's not really asking for sympathy here, he's not explaining away the loss.

• 19:46Speaker 01

  And he's not really blaming anybody else. He's simply telling the lender very calmly that the lender has two options. Option one, write off the original loan and lose everything. Option two, lend more money and maybe get it all back. The lender said yes. Chung rebuilt the shop from scratch, and this time he grew it aggressively. By 1943, what had been a 20-person operation was up to 70. He was not just repairing cars anymore, he was building a real business with systems, with a staff, and a reputation as the fastest and most reliable shop in Seoul. But of course, nothing stays good for long in this story. The Japanese intervened again. The war was escalating, and the colonial government was stripping Korea of anything that could feed the Imperial War Machine. They forced a merger of Chung's auto shop into a steel plant.

• 20:33Speaker 01

  He got 50,000 yen in compensation, and just like that, he was starting over one more time. Later in life, reflecting on the fire and everything else, Chung distilled the whole experience into what became his most famous line. There are trials, but there are no failures. The idea was not that adversity could be avoided, it was that adversity could always be converted into an education. And education is never really a loss. By refusing to use the word failure, he was refusing to accept the finality the word carried. He changed the language, and by changing the language, he changed his own emotional response before it could even set in. The rice shop being seized was not a failure. It was preparation for the auto business. The auto shop burning down was not a failure. It was the argument that got him a second loan.

• 21:20Speaker 01

  The wartime merger was not a failure. It was 50,000 yen and a set of skills he would carry into whatever came next. And what came next is Hyundai. By 1943, Cheng Juyung was 28 years old. He had built two businesses and lost them both. He had been wiped out more times than most people will be in their entire lives. But he did not stop. He did not slow down. He did not accept the given pace of things. When the path was blocked, he found another path. He went up the wall, across the ceiling, and dropped onto his target from above. And he was just getting started. After the war ended and Korea was liberated from Japan in August of 1945, Chung went back into the auto repair business. He was servicing vehicles, making a living, and steadily rebuilding after everything the Japanese had taken from him.

• 22:05Speaker 01

  And at some point during this stretch, his mother came to visit him in Seoul. He was taking her around the city on a trolley, showing her how far he had come from the farm. At one point, he gestured toward the grand headquarters of what had become the Japanese government general. one of the most imposing buildings in this city. And he told her, Mother, one day I'll become the richest man in Seoul. And live in a house even bigger than that. His mother, who you will remember, was not a woman known for letting anyone have the last word, told him. Now listen up, farm boy. You came here with just your two balls. You, the wealthiest man in Seoul,

• 22:45Speaker 01

  get your head out of the clouds. You have a life to live. Chunk's response was simple No. I'm going to make it. So much for a mother believing in their son. But now we're at the fun part. Everything he had built so far was about to get channeled into something much larger, something that would eventually carry his name around the world, and it would nearly kill the company before anyone outside Seoul had even heard of it.

• 23:11Speaker 01

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• 23:49Speaker 01

  The first thing he did was name it. He named the company Hyundai, which in Korean means modern.

• 23:55Speaker 01

  Think about the audacity of that name. Korea in 1947 was anything but modern. It was a country just emerging from 35 years of colonial rule, shattered and impoverished, and, spoiler alert, about to be made worse by a civil war. There was almost nothing modern about it. But Chung did not name things after what they currently were. He named them after what he intended them to become. He had done this already when he called a rice shop number one in Seoul, and now he was doing it on an even bigger scale. The name was a promissory note. Korea was free from Japan. Korea could now become modern, and Chung was going to be the one to build it. For a while, he was running both the auto shop and his new construction outfit at the same time. And the pivot from one to the other happened in a way that was pure chung.

• 24:43Speaker 01

  He was sitting in a government office one day waiting to submit a bid for some automotive work when he watched a construction company come in and collect payment for a completed job. The amount of money that changed hands just simply floored him. It was so much larger than anything he was dealing with in auto repair that the math broke something in his head. He was back on the farm in a sense. He was doing exactly what his father had done, working incredibly hard day after day in a business where the payoff was linear. It was never going to equal the effort. It wasn't that the auto repair business was a bad business, it was that construction was a vastly better business. Construction contracts paid 10 to 40 times what auto repair did. You could work just as hard in construction, but for a radically different payoff.

• 25:33Speaker 01

  His partners thought he was crazy. They were a small but capable auto operation and they knew nothing about construction. But Chunk had worked on construction sites during his runaway years as a teenager, and he figured he understood the work well enough to learn the rest. He also understood something about himself that his partners did not. As he put it, success is 90% determination and 10% confidence. So he merged the auto shop into the new venture and went all in on Hyundai engineering and construction. He was betting everything on a business he barely knew in a country that was about to be engulfed by war. On June 25th, 1950, North Korea forces crossed the 38th parallel and invaded. The Korean War had begun. Chung abandoned his construction projects and fled to Seoul as the North Korean Army advanced.

• 26:23Speaker 01

  He moved his family south to Busan, the port city at the southern tip of the peninsula, and he set up a new headquarters there. He could have waited the war out, and he could have hunkered down and just tried to survive. But we all know by now that that was not how Cheng Ju Young operated. He needed business, any business, and Busan had something very specific to offer, which was the US Eighth Army. The Americans had a massive presence in the city, and they needed housing, roads, and the infrastructure of a semi-permanent occupying force. Somebody was going to build it, and Chung intended for that somebody to be him. His younger brother became crucial here. The brother was proficient in English and had built good relationships with the American military engineers.

• 27:09Speaker 01

  And in a country where almost nobody could communicate directly with Americans, that was a massive competitive advantage. Through his brother's connections and through relentless, consistent delivery on every job they took. Cheng understood the American military's priorities the same way he had understood his first auto customers' priorities back in Seoul. It was the same insight applied to a different buyer. Speed and reliability mattered more than cost. Do what you say you will do when you say you will do it. The Americans didn't want excuses, they wanted results. And Chung had been delivering results since he swept the floor of that rice shop. There's one early job from this period that tells you almost everything about how Chung was going to operate for the next 40 years.

• 27:56Speaker 01

  In December of 1952, President Eisenhower visited Korea. U.S. military authorities wanted the graves of fallen UN troops at a military ceremony to be covered with green grass for the visit. That was the specification. Green grass. But there was one problem, and it was a big one. It was the middle of a Korean winter. Green grass in a Korean winter was not just difficult, it was darn near impossible. Anyone else would have asked for a deadline extension or explained the situation and requested more time. But Chung transplanted green barley instead. The graves were green, the job was done on time, and the Americans were satisfied. Chung didn't argue with the constraint. He did not explain why the constraint was unreasonable. He simply reframed it.

• 28:42Speaker 01

  And that willingness to redefine the constraint rather than be defeated by it and then to execute fast became Hyundai's entire operating signature. It is the bed bug lesson all over again. When the path is blocked, find another path, go up the wall, across the ceiling, and drop onto the target from above.

• 29:03Speaker 01

  War, it turned out, was good for the construction business. Hyundai grew steadily through the conflict, building for the Americans, learning from the Americans, accumulating capability with every contract. But Cheng also understood that war's end. So even while fighting was still going on, he started to look for civilian projects. The Korean economy was shattered, government contracts were scarce, and the margins were razor thin. It didn't matter. He had Hyundai bid on all of them. He was not chasing a windfall, he was building a company, he was building a reputation, and every contract he completed, no matter how small, no matter how unprofitable, was another deposit in a bank account that he believed would pay compound returns for decades.

• 29:48Speaker 01

  When the armistice was signed in July of 1953, Cheng was 37 years old. He was running a construction firm in a country that was about to need more building than perhaps any nation in history. Everything above ground had been leveled. The roads, the bridges, the factories, the power plants, all of it had to be rebuilt. The only question was who was going to rebuild it. Cheng intended for that person to be him. In April of 1953, three months before the armistice was even signed, the Korean government awarded Honda its biggest contract yet. The job was to restore the Grorian Bridge.

• 30:24Speaker 01

  A major crossing that had been destroyed during the war. The government wanted it to rebuild fast, not just for civilian traffic, but to move forces against guerrilla fighters still operating in the area. The contract was worth more than half a million won, and Hyundai had 26 months to deliver. This was the biggest job Chung had ever won. Not only did it have the most money, it had the most visibility. When the contract came through, he celebrated. Hyundai was about to enter the big leagues of Korean construction. But as the lesson goes, never count your money when you're sitting at the table. The celebration would prove premature. The problem started almost immediately. Only the bare skeleton of the old bridge remained, which meant almost everything had to be built from scratch in flowing water 10 meters deep.

• 31:10Speaker 01

  And Honda had never done anything close to the scale. When Chung's engineers tried to figure out what equipment they needed, they quickly discovered that the right equipment could simply not be found anywhere in the war-torn country. What they had to work with was a 20-ton crane, a concrete mixer, and a compressor. Everything else had to be done by hand. They were just getting started when the floods came. The water swept away their scaffolding and they had to start over. Then came the inflation. And the inflation is what nearly destroyed the company. When Chung signed the contract, a unit of oil cost seven won. By the time the bridge was finished two years later, it cost 45. A single sack of rice went from less than half a won to 41. That's not a typo. That is nearly a hundredfold increase.

• 31:56Speaker 01

  Every material, every wage, every supply cost him more and more each month. And the price of everything was climbing so fast that planning became almost meaningless. Chung had accounted for inflation when he bit on the job. He had expected it to be significant. He thought it might be a hundred percent. He was still off by a factor of 10. And here was the trap. The contract Chung had signed was a fixed price contract. The government was going to pay him the agreed amount and not a single one more. It did not matter that the world had changed underneath him. The contract would not adjust. So the losses started piling up, compounding week by week, with no ceiling in sight. Every day the bridge was not finished was a day the hole got deeper.

• 32:40Speaker 01

  Workers stopped getting paid. Some even went on strike. And then the creditors came. They did not knock politely. They showed up at Chung's office demanding their money. And when they didn't get it, they came to his home. Chung's son was a small boy at the time, and his first clear memory of childhood was creditors breaking into the family house with an axe. Can you imagine? That's crazy. Chung carried that for the rest of his life. The fact that the pressures he had taken on had reached through the walls of his home and touched the people he was supposed to protect. His top people came to him with a proposal. They were his brothers and his brothers in law. They had staked their own lives on Hyundai, and they told him, Stop, stop building this cursed bridge. We're losing more money by the hour. The losses are already near catastrophic, and continuing will only make them worse.

• 33:28Speaker 01

  any other firm would quit, cut our losses, and survive. We need to walk away. But Chung didn't know how to stop, so he refused. And his response tells you exactly who this man was, not just as a businessman, but as a human being under extreme duress.

• 33:46Speaker 01

  He said, quote, you mean you want me to take down our sign? If you're suggesting that we stop construction at this point, you're basically saying we close down our business. Trust is everything to a businessman. The moment you lose trust, it's all over. It's my dream to create the best construction company in the Republic of Korea. And you're telling me to abandon it all? Whatever happens, we're going to finish this job. We have to. His brothers were telling him the rational thing. Stop. The math is clear. You're bleeding out every day. You continue to bleed more. Just walk away. And Chung heard them. He understood the math. He was not a fool, but he was calculating something that they were not. He was calculating the value of the name, the name Hyundai, and its reputation.

• 34:31Speaker 01

  The trust he had spent years building, contract by contract, starting with the Americans in Busan, starting before that with the auto shop, and starting even before that with the rice shop, where he arrived first every morning and swept the entire entrance before anyone asked him to. If he walked away from a job, any job, in his eyes, his reputation and credibility would be destroyed. His brothers were so moved by his refusal to quit that they went home and sold their houses. When Chung found out, he burst into tears. Then he sold the land under his original auto repair shop, the place where Han Dai had been born. Together, the family raised almost a million won and put every last penny of it into this one project. They went all in. And when that ran out, they borrowed more at interest rates as high as 18% per month.

• 35:19Speaker 01

  Let that number sink in for a second. 18% per month. Not per year, per month. That is the kind of interest rate you accept when you believe one of two things. Either that you will finish fast enough that the interest won't matter, or that the alternative to borrowing is worse than any interest rate. Chang found himself in the second category. In May of 1955, the bridge was finished. The final accounting was brutal. The contract paid Hyundai 547,800 Won, which had seemed like an astronomical sum when they signed it two years earlier. But the project had left them 650,000 won in debt. They had spent more than twice what they earned. His competitors were merciless. What would a sixth grade dropout know about construction? And here's the part that gets me. Chung kind of agreed with them.

• 36:05Speaker 01

  He didn't blame bad luck, he didn't blame the government for the fixed price contract. He didn't blame the floods, he didn't blame the creditors who had broken into his house with an axe. He blamed himself. He had not understood the riverbed conditions. He had not known what equipment the job truly required. He had rushed into a bid far beyond his capability without understanding what came after winning it. There was a line from a Chinese classic he returned to often after this nightmare. The root of failure is planted the moment you achieve your goal. His goal had been to win the bid, he had won it, he had celebrated, and he had not been prepared for what came next. He would not make that mistake again. But he also would not call the bridge a complete failure. He had finished it, he had kept his word, he had not defaulted on the contract, and he had not abandoned the project.

• 36:57Speaker 01

  And importantly, he had not cut a single corner. He just took the loss. There may be periods of hardship, Chung believed, but never complete failure. The bridge was hardship. It was not failure. And the difference between those two worlds in his mind was the difference between a company that survived and a company that disappeared. What happened next is crazy. Someone had been watching the whole time. While Chung was selling the land under his own company to pay for a bridge that was costing him more every day, while his brothers were selling their houses and while creditors were coming at him with an axe, the Korean government was paying very close attention. They had watched Hyundai take a job that was clearly too big. They had watched the floods wipe out the scaffolding and they had watched the inflation gut the contract.

• 37:45Speaker 01

  They had watched Chung refuse to quit when every rational calculation said he should. And they had watched him deliver exactly what he said he would in the time frame he said he would do it. When the Ministry of the Interior assigned credit scores to the country's construction firms after the war, Honda's was the highest in Korea. Not because they had made money, they had lost a fortune. They got the highest score specifically because they had finished on time. In a country full of contractors who overpromised and underdelivered, who walked away constantly from jobs, the moment the math worked against them. Chung would later tell a group of businessmen who came to him looking for capital. Trust is everything to a businessman. The moment you lose trust, it's all over.

• 38:31Speaker 01

  If I have to choose between reputation and money, I will always take reputation. He believed it because he lived it. The bridge was proof. He had chosen reputation over money at a cost that would have destroyed most people. And the reputation had paid him back many times over by the time he said that. The bridge also taught him something specific and operational. He had gone into the biggest job of his life without the right tools. Even worse, he hadn't known what the right tools were. He could not read the conditions of the riverbed. He could not assess what equipment the job demanded. He had been guessing, and the guesses had almost killed his company. He swore it would never happen again. So he set up a dedicated heavy equipment office inside Hyundai. Its only job was to acquire, repair, and remodel every piece of construction machinery they could get their hands on.

• 39:22Speaker 01

  And if they could not buy the machine, they would build it from scratch. This is where something interesting starts to happen. Chung catches a bit of a break, and the break is actually the return on something he had invested in years earlier without really knowing he was investing.

• 39:39Speaker 00

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• 40:09Speaker 01

  Because of his wartime work with the Americans, they were the only Korean construction company registered as direct customer of the US Eighth Army. If a competitor wanted to buy high tech American equipment, they had to go through a middleman and pay a markup. Hyundai bought direct. And here's where the auto shop pays off.

• 40:26Speaker 01

  Those years Chung had spent memorizing every single auto part. The years his partners had thought were beneath him gave him an edge his competitors did not have. He could look at a piece of American construction equipment and know exactly what it was worth. The other construction bosses in Korea were just guessing, but he knew. Nothing in life had ever been wasted. Every phase was quietly funding the next one. In 1957, Hondai won the contract to restore the Han River Bridge in Seoul. This was the same bridge that had been destroyed in the opening hours of the Korean War, and the symbolism was hard to miss. The newspapers called it the greatest construction project of the time. And it was one of the largest projects announced since the war. Hyundai finished it in months. The Gorian Bridge had gotten the attention of the government, but the Han River Bridge got the attention of the entire country.

• 41:15Speaker 01

  Hyundai was now counted among the top five construction companies in Korea, out of more than a thousand. And then Hyundai just kept building, bridge after bridge. They would go on to build 13 bridges across the Han River alone, including Korea's first suspension bridge and its first cable state bridge. Every one of them was a deposit into the account Chung had been filling since the day he swept that rice float shop. This was now his pattern, and it would repeat for the rest of his career. He would take a contract that looked punishing on paper, finish it no matter what, and use the trust he earned from finishing to win the next contract, which was always bigger. He was doing the same thing he had done since the rice shop, just at a larger denomination. Take what you have, even if what you have is only your willingness to show up first and leave last and work hardest and convert it into something more valuable than money.

• 42:06Speaker 01

  Because money follows trust. Trust does not follow money.

• 42:10Speaker 01

  Here's what you have to understand about where Korea was in 1960. The country had a per capita income of about $80 a year. That put it on the same level as Ghana and Sudan, and slightly behind India. People were sleeping and starving in the streets of Seoul. Private cars were a novelty. Electricity and running water were luxuries. A group of the US State Department experts, after studying Korea's prospects in depth, concluded that Korea was an economic basket case that would always depend on American handouts for its existence. The World Bank was no kinder. Not that these experts are actually right very often. When they ranked the Asian countries most likely to industrialize, Burma and the Philippines were near the top. Korea was near the bottom. Nobody outside of Korea, and very few people inside it believed the country could become anything other than a permanent charity case.

• 43:00Speaker 01

  Remember that, because what Chung did next only makes sense when you understand how desperate things were. Honda had been doing U.S. Army construction work since the war. Quick jobs, simple specs, get it done fast. But in the late 1950s, the nature of the American work changed. The US military started building permanent facilities to American standards, real buildings with real specifications, documents running hundreds of pages with equipment clauses that had to be met exactly, quality requirements that had to be demonstrated, and engineering tolerances no Korean company had ever been asked to hit. Chung and his employees could barely read a page of them. And this is where you get a glimpse of kind of what separated Chung from almost everyone else running a company in Korea at the time.

• 43:46Speaker 01

  He had zero shame about not knowing things, none. Maybe it was his lack of formal education, and maybe it was just how he was wired. But in a culture where hierarchy and saving face mattered enormously, Chung would ask anyone anything, regardless of their rank or age or whether the question made him look foolish. His attitude was simple and he drilled it into every one of his employees. It is not shameful to ask about something you do not know, even if you have to ask somebody younger or a lower rank than yourself. He had a line for it that cut right to the point. Fixed thinking is what makes fools. Pretending you knew something you did not, performing competence instead of actually acquiring it, that was the real stupidity. And Chung had no patience for it. He wrote, not receiving formal education does not mean one is lacking in wisdom.

• 44:35Speaker 01

  It's a mistake to think that broad and deep knowledge can only be obtained through formal schooling. So Hyundai asked the Americans about everything, no matter how basic. They asked the technicians how to read the blueprints, how to meet the specifications, how to operate the equipment, how to sequence the work. And on every work site where the Americans were present, Chung rotated as many of his own workers through as possible so they could absorb everything from their counterparts on how to do it the American way. Each site became a classroom and each contract was a new semester. And when they still didn't know what something was, they just figured it out. During one paving project at the Osan Airbase, the specifications called for a batch plant to mix concrete properly. Chung had never seen a batch plant.

• 45:21Speaker 01

  He didn't know what one was, so he sent a subordinate to another construction site to find out what one looked like. The man came back with a description. Chung drew up the planes himself and had his engineers build one from scratch. On another job, he needed to lift a 110-ton gate into place, but he did not have a crane big enough, so he used two 60-ton cranes in unison. It violated standard practice, but it worked. And this went on for years. Chung wrote that he never had enough English speakers to translate properly. They always struggled to constantly find the equipment to match the specs. And the gap between what the Americans expected and what the Korean companies could deliver was at times humiliating, but they kept learning one day at a time, one foot in front of the other, every technique, every standard, every procedure.

• 46:10Speaker 01

  And slowly through sheer stubbornness and a refusal to stop asking questions, Hyundai went from being unable to read the American spec manuals to planning entire projects using those same standards. Chung later described the whole Korean construction industry as being dragged, sometimes kicking and screaming, into modern times by the demand of the US Army work. The American military, without ever intending to, had become the most effective vocational school Korean construction ever had. Now, to understand how Chung ran all of this day-to-day, you have to understand just what was driving him. And it's easy to hear what I'm about to describe and conclude that he was just a control freak, but he wasn't. Or at least that's the wrong way to frame it. What drove Chung's management style was not a need of control, it was a need to compete.

• 46:58Speaker 01

  He was aware at times that Korea had to compete with Japan and had to compete with every other industrializing nature, or the country was never going to climb out of the hole it was in. The State Department had written Korea off. The World Bank had put it at the bottom of the list, and Chung kind of took that personally. He saw it as his responsibility, as a point of national honor to prove them wrong. And that meant every worksite, every project, every single day had to be run at maximum intensity. His country could not afford anything less. Chung did not manage from behind a desk. Every morning, first thing he went straight to the nearest worksite. He believed that a person in a position of authority is a role model for everything. If a CEO does not lead by example and merely orders workers around, his words will fall on deaf ears.

• 47:46Speaker 01

  He visited the heavy equipment yard at least once a day.

• 47:51Speaker 01

  Often twice. And the second visit was the whole point. Here's how it worked. He would arrive in the morning, everyone would be working hard, braced for the boss. They knew his reputation and wanted to impress him. He would inspect, nod, and then leave. And the workers would relax, the pressure valve would release, and they would slow down just a little. The coast was clear. And then the boss would come back. The people who had been lounging would scramble to their stations. Chung took quiet satisfaction in this. He believed the standard was not something you performed for an audience. The standard was the standard all the time. You worked at full capacity whether someone was watching you or not. And if you didn't, the solution was to make sure someone was always watching. He called the project supervisors at all hours of the day and night to ask if certain tasks had been completed.

• 48:41Speaker 01

  He gave his workers less time than they needed to finish a job, deliberately, because he believed that people used as much time as they were given. Get it done by tomorrow morning was typical. Only if fire falls on their feet will people quickly attend to the work they are instructed to do, he observed. If he felt someone was not carrying their load, he fired them on the spot. Once he fell asleep on a train headed to a workside outside Seoul and missed the stop, he got off at the next station, hiked back, and arrived at the middle of the night. And instead of waiting until morning, he immediately started inspecting the work and quizzing the sleepy workers and supervisors about what they had accomplished that day. Nobody could believe he would show up at that hour. Behind his back, sometimes to his face, his workers called him the tiger, because he could appear out of nowhere and pounce on the unsuspecting.

• 49:32Speaker 01

  Cheng seemed to enjoy the nickname. It kept people on their toes. He admitted it freely. I was a tough boss for everyone everywhere. I know I must have hurt the feelings of many, as growling was the only way I knew how to speak to them. Later in life, he was sorry about that. But he was also certain that the constant pressure, the relentless inspections, the refusal to accept anything less than full speed were what made Hyundai into what it became. The company absorbed his personality. It became fast, relentless, and allergic to excuses, which is another way of saying it became him. There was one more piece to how Chung built Hyundai, and I think it had to do with who he let in the door. In Korea at the time, hiring was a patronage system, who you knew mattered more than what you could do.

• 50:17Speaker 01

  Chung rejected that system completely. He based hiring decisions on individual competence, not personal connections. Now, in a Confucian society built on networks of obligation, that was pretty radical. And it created problems because government bureaucrats were constantly trying to pressure Chung to hire their sons. In Korea, refusing a well-placed official could cost you permits. It could cost you approvals and contracts. But Chung found a way around this that was clever. He told his brother, who handled hiring, to give bureaucrats' son a particularly difficult English language test, tests that essentially guaranteed failure. And then Chung could tell the fathers in good conscience that he had no problem at all hiring their boys. The boys had simply been unable to pass the company's entrance exam.

• 51:03Speaker 01

  In a Confucian society that had used competitive examinations for centuries to determine rank, the officials who had themselves gotten their own positions through exactly that kind of exam had no acceptable response. They could not argue with their own logic. And Cheng wasn't only using the English test to filter out nepotism. He actually needed English speakers desperately because he had his eye on international businesses long before most Korean companies understood what that even meant. English tests were required at Hyundai years before the rest of Korea caught on. Everything depended on having the right people. The learning he was doing and absorbing American methods, building machines that had never been seen before from descriptions brought back by subordinates, all of it required people who could actually learn, people who were hungry and smart and willing to be humiliated in the process of getting better.

• 51:55Speaker 01

  He needed people who could pass a hard test, people who, like him, had no shame about not knowing, and no quit in them once they started learning. That was the machine he was building. And when President Park Chung Hee paid a surprise visit to Hyundai construction site years later, what he found was not a chairman sitting behind a polished desk. He found Chung sleeping on the ground with his workers. Chung had spent the night on the site. By the time Park arrived at dawn, he was already up and working alongside the crew. Park was, after all, a man who valued commitment above almost everything else.

• 52:31Speaker 01

  When Hyundai started building its first major fertilizer plant in the early 1960s, the Germans showed up to handle the work Korean hands weren't trusted to touch. A German engineering firm had been brought in to do the advanced welding, the precision engineering, the systems no Korean company yet knew how to build. And the Germans did not think much of their Korean counterparts. They set a rule on the job site. Hyundai workers were not permitted to weld more than 18 meters a day. That was the ceiling. It is that number that tells you exactly where a country sits in the world. At the time, Korea was not being asked to build, they were being allowed to assist. And the Germans were very clear about the difference. Chung admitted that it was humiliating, but he also understood it was the price of admission, the same way it had been with the Americans.

• 53:19Speaker 01

  So he did what he always did. He watched, he asked questions, he put his workers shoulder to shoulder with the Germans and told them to absorb everything. The techniques, the sequencing, the standards for materials, the tolerances that were unlike anything any Korean construction firm had ever encountered before. He drilled the purpose of it into everyone at Hyundai. The point of this project is not to finish this project. The point is to learn everything they could from the Germans. That is exactly what happened. The next projects, Hyundai 1, were bigger and more complex, but each one required less and less foreign help. The learning was compounding. The same pattern played out in power generation, and this is where you can actually watch the ceiling start to move. At first, the Korean government did not trust domestic companies with the power plants at all.

• 54:09Speaker 01

  American firms were given the entire contract for each new plant. Even the welders were imported from overseas. Korean companies were simply not considered capable of the work. But Hyundai kept pushing, plant after plant, each time climbing one more rung up the technical ladder, each time taking more and more of the work. And in nineteen sixty two finally something shifted.

• 54:33Speaker 01

  Hyundai built a power plant with only limited guidance from their foreign partners. And for the first time, their work was not merely tolerated. Instead, it was praised by the same foreign engineers who a few years earlier didn't trust them with anything critical. Chung was thrilled, and I don't think that's too strong of a word. That was the moment Hyundai escaped the labor of being a subcontractor. They were joint partners with world-class companies on massive projects. For a man with a sixth grade education running a company in one of the poorest countries on earth, that recognition was worth more than any profit margin. And he kept pushing because Chung always kept pushing. Eventually, Hyundai became the first Korean company to build a nuclear power plant.

• 55:18Speaker 01

  Think about that for a second. From a company that could not read an American spec manual in 1957 to a company whose welders were rationed by foreign engineers in the early 60s to a company that was building nuclear power plants.

• 55:32Speaker 00

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• 56:02Speaker 01

  By the end of the decade, the South Korean government did something that would have been unthinkable only ten years earlier.

• 56:09Speaker 01

  They announced that from now on, only domestic companies would be hired to build the country's power plants. The apprenticeship was over. Korea was going to build for itself. And none of it happened by accident. It happened because companies like Hyundai, led by Chung, had refused to accept the foreign engineers' assessment of what Koreans were capable of. If they had, foreign firms would have dominated Korean construction indefinitely. Korea would have stayed a client state, paying outsiders to build its own country. Instead, Korean companies took the expertise they had painstakingly gathered from American bases, from German engineering, and from every condescending supervisor and every humiliating ceiling and used it to build their own nation.

• 56:55Speaker 01

  Chung had a single question he asked every time a subordinate told him something couldn't be done. His people came to know it as both a challenge and a philosophy. How can you know it's impossible if you haven't tried it? The question was not rhetorical. It was a demand. Show me the evidence that this cannot be done. Show me that you have actually attempted it and failed it. Not that you have imagined failing it and decided not to start. Chung did not believe in impossibility as a starting position. He believed in it only reluctantly as a conclusion you were allowed to reach only after you had exhausted every other alternative.

• 57:35Speaker 01

  And in his experience, most people gave up long before they had exhausted anything. In roughly 15 years, Chung had gone from a man fleeing Seoul with his family in 1950, scrambling for scraps of American military work in Busan, to the head of one of the top construction companies in Korea. He was building bridges, dams, power plants, industrial facilities. He had dragged an entire industry and, in some real sense, an entire country from devastation towards something that looked like modern times. But he was not done, not even close, because his ambition was no longer to build the best construction company in Korea.

• 58:14Speaker 01

  It was to build the best construction company in the world. And the world was going to require a level of a dacity that would make the Gorian Bridge look like a warm up.

• 58:24Speaker 01

  By the early 1960s, 80% of Hyundai's revenue was coming from the Korean government. That's even worse than it sounds when you realize governments kept getting overthrown. After the war, Korean politics were as chaotic as it gets. Every time a new government took power, private business was the first thing it came for. Each new administration would accuse successful companies of being too cozy with the previous regime. So contracts would be rescinded and fines would be levied. Sometimes people even went to jail. Cheng had watched it happen twice already. After one regime collapsed, the intern government canceled all government construction contracts overnight, and the entire industry crashed into recession. Then came a military coup, and the cycle started all over again.

• 59:12Speaker 01

  Honda managed to survive these purges partly because they had been less politically connected than their competitors, and partly, as Chung noted with some dark humor, because they were the poorest of the bunch. Honda had been repeatedly denied government loans they desperately wanted, and that failure turned out to be a blessing in disguise. In a way, their bad luck had become their proof of innocence. There was another reason too. Government budgets were not growing. The U.S. military projects that had been Hyundai's bread and butter were drying up as the Americans got pulled deeper into Vietnam. Cheng came to a blunt conclusion. I foresaw that if our construction industry did not make inroads into the foreign market, it would soon reach a dead end.

• 59:59Speaker 01

  Or, to put it another way, Cheng decided that Korea was not big enough for him. So Hyundai started bidding on international contracts, and they lost every single one. But Cheng didn't care. He didn't expect to win. Not yet. What he was doing was what he had always done. He was learning how the game was played. How did international bidding work? What did the specifications look like? What were the best competitors bidding and why? In late 1964, he sent one of his younger brothers to Thailand to scout for opportunities. The brother found a project that fit a 98-kilometer highway through dense jungle connecting two major cities. When he asked if Hyundai could bid, he was told they would first need to buy $2 million worth of equipment.

• 1:00:45Speaker 01

  So he called Seoul and the Korean government granted them credit for the entire amount immediately. No other government in the world backed its contractors that aggressively at the time. Under the new administration, Korean companies could count on low-interest government guaranteed loans for any reasonable export venture. Hyundai submitted a bid of $5.2 million and beat out 29 companies from 16 countries. The news was front page in Seoul. And when the project's engineers boarded the first plane to Thailand, the Korean broadcasting system put it live on TV for the nation. Think about that for a second. The first time a Korean construction company sent its people abroad to build something, the entire country watched it happen live on television.

• 1:01:31Speaker 01

  It was a frog leaving the well in real time with the entire pond watching. President Park called the contract vindication of his economic policies, proof that Korea was finally earning real foreign credibility.

• 1:01:45Speaker 01

  But the celebration was premature. The project ran into trouble almost immediately. Honda had tried to save money by buying secondhand equipment, including Japanese trucks left over from the Second World War. The trucks broke down constantly, and then the monsoons came. Honda had assumed they could just keep building through the rainy season. They were wrong. The pavement they laid in the heavy rain buckled, floods washed out entire sections. They had to redo enormous parts of the road. For the second time in the company's history, the board started talking about walking away.

• 1:02:20Speaker 01

  It was the Gorian Bridge all over again, the same shape in a different country. The losses were piling up, the equipment was failing, and the workers were even starting to strike. And Chung's lieutenants came to them with the rational argument. Let's cut our losses and survive. Chung shut it down immediately, but this time his argument was slightly different. He said, a contract is a contract. Even if we are in dire monetary straits, we have to build Thailand the high-quality expressway they're expecting within the time we have. That's why we are here. We cannot and will not just cut and run. We have to finish what we started for the good of Hyundai brand and for the good of the country. If Hyundai quit after becoming the first Korean company ever to take an overseas project, they would be kicking the ladder away from every Korean construction company that came after them.

• 1:03:14Speaker 01

  The whole industry would be branded as unreliable. The frog would crawl back into the well and the door would close behind it. He called abandoning the project an act of national treason. The board never raised the idea again.

• 1:03:29Speaker 01

  They finished the highway and they lost $3 million. And Chung typically reframed the failure, calling the experience a coming-of-age initiation. What Hyundai walked away with was the ability to build highways to international standards. They had learned asphalt concrete production. They had learned international specifications. They had learned how to operate the modern equipment under foreign conditions. And all of it paid for in money and humiliation. And all of it was about to be turned into something much bigger back home.

• 1:04:00Speaker 01

  But first, there was Vietnam. In the mid-1960s, the Vietnam War was heating up, and Chung saw what most Korean executives did not. American forces and their allies needed someone to build them things, and they needed them fast. Cheng sent one of his brothers to Saigon. The brother rekindled the company's old contracts with the U.S. military, set up offices, and started picking up every construction contract he could find. Hyundai built military camps, they dredged rivers, they helped customers construct an American naval base. They even ran a laundry and dry cleaning service on the side because if you can move men and equipment into a war zone, you might as well make money on the laundry too. The risk matched the opportunity.

• 1:04:46Speaker 01

  During the 1968 Tet Offensive, Hyundai workers were dredging the Mekong River with enemy fire coming in all around them. These were not soldiers. They were construction workers. They were men with shovels and machines working through one of the most violent moments of the entire war, because they had a contract to finish, and Chung had taught them what finishing a contract meant. The Korean civilian involvement in Vietnam ended up being enormous, 23,000 Korean workers in total. Their earnings accounted for 10% of Korea's entire foreign exchange in 1966, and nearly 20% in 1967. After five years of work in Vietnam, more than $660 million in foreign currency had been flowed back into the Korean economy. President Park was delighted.

• 1:05:34Speaker 01

  Hondae alone accumulated hundreds of millions of dollars from Vietnam construction contracts. Cheng didn't know that this money was going to become the seed capital for the most audacious bet of his entire life. What he did know was that his company was piling up cash and capability at a rate that had been unimaginable just a few years earlier. Each contract was bigger than the last. Each new theater of operations taught them something they had not known before. The frog was no longer in the well. Other projects followed bridges, military bases, and military housing in Guam, and even Alaska, a harbor dredging project in Australia, a hydroelectric plant in Papua New Guinea.

• 1:06:16Speaker 01

  Hondae was no longer a Korean construction company doing some work abroad. It was becoming a force across the entire Pacific Rim. And while all of that was happening overseas, back home in Korea, two enormous projects were about to land in Cheng's lap. One was a dam and the other was a highway. And together they were going to change not just Hyundai, but Korea itself.

• 1:06:39Speaker 01

  There's a moment in Chung's autobiography where he reflects on how his motivations changed over time. And it might be the most important admission he ever made about himself. Because the entire shape of what happens from here on out depends on it. When he left the farm for Seoul as a boy, Chung admits he was not thinking about Korea. He didn't care about Korea. He was thinking about himself. Who could blame him? He wanted to keep himself fed, and once he had a family, to keep that family under a roof. Up until now, his motivation was personal survival and personal advancement. He was honest about it. But somewhere along the way, something shifted. And he pinpointed the moment as the Korean War. As Hyundai grew from a small outfit into building things the country could actually depend on, Chung started to see work differently.

• 1:07:26Speaker 01

  He began to believe that Hyundai could grow as a company while also helping Korea grow as a country. And in his mind, those two things stopped being separate, they became the same thing. He was adamant looking back that without a shift in how he saw his work, he never could have grown Hyundai into what it became. Now, this shift sounds like the kind of thing every successful executive says in a memoir. But in Cheng's case, you can actually watch it change his behavior in real time. And it changed his behavior in a way that made him deeply unpopular with every other construction company in Korea. He became obsessed with cutting costs on government projects.

• 1:08:06Speaker 01

  His conviction about this went beyond strategy. He had a real moral position. He said, after luxury comes corruption. I've never seen a country prosper with a leader who enjoys luxury. What was true for countries, he believed, was true for companies. That might sound like common sense, but in the Korean construction industry of the 1960s, the incentive structure ran in the exact opposite direction. The standard playbook was to look at a government contract and ask, how do we maximize our profit by any means possible? Companies inflated costs, they routed transport along longer paths just to bill for higher shipping costs. They padded estimates. They billed for elaborate extras that did not even exist. Everybody did it. That was how the game worked. Chung wanted to play a different game. He realized that lowering his margins meant the government saved money, which meant the government could fund more projects, which meant more work for everyone, including him, because he would always bid the lowest.

• 1:09:02Speaker 01

  He was playing the long game.

• 1:09:05Speaker 01

  And most of his competitors were playing the short game. And then he made it worse for them. He started proposing alternative construction plans for projects the government had already awarded to other companies. If Hyundai could find a cheaper, faster way to build something, Chung would submit the alternative plan and lobby for the original one to be thrown out. This drove his competitors insane. It drove the government officials insane. Their view was simple. The government designed the project, the construction company bit on it, the construction company built it, and the construction company kept its mouth shut. Chung was not keeping his mouth shut. And here's the thing that his competitors didn't understand at the time. By behaving this way, Chung was making Hyundai regime proof. Other Korean companies won contracts through political relationships.

• 1:09:50Speaker 01

  They prospered as long as their patrons held office. But the moment the political win shifted, and in Korea they shifted constantly, those companies were cast aside. Their entire value proposition had changed. Hyundai's value proposition was different. It was what they could do cheaper and faster than anyone else.

• 1:10:09Speaker 01

  And any government, regardless of ideology, could see the logic in that. The company that built high-quality things cheaper still got hired. As Chung would later put it, we may not have always been on good terms with every administration, but Hyundai has helped the government by cutting costs through continued research. This is why Hyundai was ultimately recognized as being indispensable to Korea's economic growth. Indispensable is a word people used loosely. Chung had earned it. He had spent years building a company that no Korean government could afford to punish because no Korean government could afford to do without it. The shift from personal ambition to national ambition had not just changed how Chung thought about his work, it changed the structural position of his company inside his country.

• 1:10:55Speaker 01

  And that position was about to be tested by the two biggest projects of his career. The Korean government had been trying to build a dam across the Soyan River since 1957.

• 1:11:06Speaker 00

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• 1:11:36Speaker 01

  Ten years later, they still hadn't even started. The site was 65 miles south of Seoul. The dam was supposed to provide hydroelectric power, water, and flood control, but technical issues, the location, and ballooning cost estimates kept stalling the project year after year. By late 1960, President Park was losing patience. The Ministry of Construction had brought in one of Japan's most prestigious engineering firms, Nippon Khoi, to design it. They recommended a conventional concrete gravity dam. It would be the strongest type possible, it would last for centuries, and most of the profits would flow back to Japan. It was simply assumed by the Korean government, as much as anyone else, that no Korean company could handle a project this large and complicated in such inhospitable terrain.

• 1:12:22Speaker 01

  So with the cost estimates piling up and no progress in sight, President Park called Chung in and asked him what he thought of the Japanese plan. Cheng studied it carefully and then did something unexpected. He told the president that Japanese were wrong. His counter proposal was an earthen dam, a zone-filled dam built from rock and gravel pulled out of the surrounding mountains. He said it would cost 30% less than the concrete design, and it was actually better suited to the terrain. He had based the conclusion on a French design dam he had studied while Hyundai was working on the highway project in Thailand. For dams over 100 meters tall, earthen construction was more cost effective than concrete, and it was believed to be just as safe. The Japanese were furious. Nippang Khoi's lead negotiator, a graduate of Tokyo Imperial University, confronted Cheng directly in the meeting that followed.

• 1:13:14Speaker 01

  Cheng, what do you know about dams? Where did you study dams? Our design team is made up of Tokyo University graduates who have designed dams around the world. Do you mean that a man who completed only elementary school knows more than we do about dam construction? Cheng did not reply. He had spent his entire life being asked some version of that exact question. He had learned a long time ago that you do not answer that question with words, you answer it with results.

• 1:13:43Speaker 01

  So he sat there quietly and let the question hang in the air. The Korean officials were just as furious as the Japanese. The Ministry of Construction and the Water Resources Department had already signed off on the Japanese design. What was this? A local construction company contradicting the expert opinions of both its own government and one of the most respected engineering firms in the world. Cheng later compared his behavior to poking at a tiger's nostril and getting oneself killed. The meeting broke up in disarray. When the final proposal reached the president, the ministry officials recommended the concrete dam and barely mentioned Chung's alternative proposal, dismissing it as unsafe. And then Park asked one important question that no one had yet considered.

• 1:14:29Speaker 01

  He asked about national security. Korea was still technically at war with the North. The DMZ was only a few dozen miles away. And if the North Koreans bombed a concrete dam, Park said the strike would blow a massive hole in the structure and millions of gallons of water would surge toward downtown Seoul. An earthen dam, on the other hand, would be more likely to simply collapse if struck. the collapse would create a natural barrier.

• 1:14:55Speaker 01

  The water would escape much more slowly. From a national security standpoint, did the earthen design not make more sense? The room went quiet. The Tokyo University graduates, the Ministry of Construction, the Water Resources Department, none of them had an answer. Park sent the whole group back to study the question. Two months later they came back with their conclusion. Chung had been right. On every count, the earthen dam was just as safe, it was significantly cheaper, and in the event of an attack, the concrete design they had been pushing could have been catastrophic for the people of Seoul. The dam broke ground in 1967 with Hyundai as the contractor. It was finished six years later at a cost 30% below the original estimates. It became the largest rock-filled dam in Asia.

• 1:15:41Speaker 01

  The National Academy of Engineering of Korea later called it a magnificent dam constructed by our own technologies and our own hands in the economically deprived period of the early 1970s. There is one last detail that Chung tells about the project, and I love it. When the dedication ceremony was held, Chung watched it on television as he watched the same ministry officials who had fought him tooth and nail the whole time, the ones who had dismissed his proposal as unsafe and tried to bury it in the report to the president, stand in front of the cameras and explain how they rejected the Japanese design and replaced it with something better. Cheng never corrected the record in public. He did not need to. He knew, and that was enough. In 1964, President Park visited West Germany and saw the Autobahn, and it changed how he thought about his own country.

• 1:16:31Speaker 01

  Park came home and looked at South Korea with new eyes. He saw a country connected by haphazard roads that were slow and unreliable, and a railway system that was both expensive and overloaded. His logic was simple. Let's build an expressway and goods and people will move faster. Raw materials will reach factories sooner. Ports will connect to inland cities. Everything in South Korea accelerates. As he told Chung, we just have to get it done no matter who tries to oppose us. And plenty of people did try to oppose them. When the first cost estimates came out, opposition erupted from every direction. The World Bank told the Korean government the project was economically and technologically infeasible and would add little to Korea's development. The Korean legislature agreed the country was simply too poor to afford it.

• 1:17:20Speaker 01

  Park did not see it that way. The expressway, he argued, would be a better investment of our limited funds than railroads and harbors for solving our transportation bottleneck. And beyond economics, he believed building the road would give the Korean people a new confidence that they can do whatever they want. So in November of 1967, Park summoned Chung to the Blue House. It was their first private face-to-face meeting. Park knew about Hyundai's expressway experience in Thailand and wanted to know what Chung thought. Then he asked him for a cost estimate. Starting the next day, Chung and a team spent three weeks driving the entire route between Seoul and Busan, measuring everything, surveying, flying over the train in the air. And what Cheng saw was that the engineers who had originally planned the road had not actually studied the ground they were going to build on.

• 1:18:12Speaker 01

  They had relied on textbooks and theory, the map, not the territory. They had proposed pushing the highway in almost a straight line from city to city, ploughing through mountains at enormous cost. Chung proposed something different. Dig fewer tunnels, build the road around the mountains where you could, increase the incline of certain stretches slightly above the standard maximum grade. The result would be a highway that could be built faster and for less money. Park had asked four other groups for the same estimate. When the numbers came in, the Ministry of Construction said it would cost $65 billion. The Army Corps of Engineers said $49 billion. And the Ministry of Finance said $33 billion. Chung said $28 billion. Less than half of the Ministry's construction number.

• 1:18:58Speaker 01

  The Ministry of Construction publicly mocked him for it. Park asked Chung if the project could actually be done at that price. Chung's answer was four words.

• 1:19:08Speaker 01

  I can do it. Park gave Hyundai the lead role. They would organize a consortium of 17 farms to construct the highway, and Hyundai itself would be assigned the most difficult stretches, roughly two-fifths of the entire project. On February 1st, 1968, construction began with the sound of blasting. Cheng said he would remember the excitement of that moment for the rest of his life. The scale was staggering. The expressway would run 428 kilometers down the entire spine of the country. Hyundai alone spent over $8 million to buy 1,900 pieces of heavy equipment for the project. The entire nation of Korea at the time owned only 1,400 such machines. Chung was buying more equipment for one project than existed in the entire country. He barely slept. He literally moved to the construction sites.

• 1:19:53Speaker 01

  He brought a cot. When he was being driven around in his Jeep, inspecting progress, he would close his eyes for a few minutes at a time as the Jeep bounced over unpaved roads. That was his sleep schedule. The moment workers saw his Jeep approaching, they would come to attention. He drilled a single belief into the workforce. If you are diligent for a day, you will sleep comfortably for a night. If you are diligent for a month, the quality of your life will noticeably improve. If you are diligent for two years, ten years, your whole life, your accomplishments will be recognized by all. President Park was nearly as obsessed as Chung. Every day a situation report was placed on his bedside table, and every morning he would call Chung. He was constantly in the air over construction sites in his helicopter.

• 1:20:40Speaker 01

  A former engineer who worked closely with President Park in those days described him as a conductor of an orchestra with the helicopter as his baton.

• 1:20:50Speaker 01

  If Park did not have an answer on Tuesday, he would be back with one on Thursday. There is one incident from this project that became legend, and it tells you why Chung and Park ended up trusting each other so completely. On every Hyundai project, Chung had an ironclad rule. Construction trucks had the right-of-way over everything and everyone on the work site. There were no exceptions. Even Chung, the CEO, yielded to a dump truck. One day, President Park was riding through the construction zone in his Jeep. The local police chief saw a Hyundai dump truck coming and jumped out of his car to wave it off the road so the president could pass. Park, who knew Chung's rule, directed his own driver to yield to the truck instead. The dump truck driver became known on the project as the man more powerful than the president.

• 1:21:37Speaker 01

  But the road was punishing the men who built it. Several workers died in landslides and cave-ins. The most dangerous stretch required blasting a four-kilometer tunnel through unstable rock. On a good day, they advanced two meters. On a bad day, less than 30 centimeters. There were 13 separate cave-ns in the Tanji tunnel alone. And then something strange happened. Workers started saying there were evil spirits in a particular tree near the construction site. More and more men refused to work near it. An army officer cut the tree down to end the superstition. The next morning, the officer was in a serious accident. More workers walked off. Chung had to double the wages and was still short of hands. To keep this schedule on track, he had no choice but to mechanize even farther. With two months left until the deadline, a site manager came to Chung with a desperate plan.

• 1:22:27Speaker 01

  If they switched to high strength cement that set in 12 hours instead of a week, they could compress 90 days of work into 25. The cement was far more expensive and had never been used at this scale in Korea. Chung's answer? If I have to choose between reputation and money, I'll always take reputation. Finishing on time is how we protect our reputation and honor. Let's give it a shot. On july seventh, nineteen seventy, the opening ceremony was held on schedule, two years and five months of construction, nearly a year ahead of the original date.

• 1:23:01Speaker 01

  President Park was triumphant. How much energy do our people have? How much technology do we have? We will test our nation's potential with this expressway. The road changed South Korea exactly the way Park believed it would. Before the highway, the train ride from Seoul to Busan took 15 hours. The expressway cut it to four. In his first year, 3.7 million vehicles used it. It connected the main ports to the factories and the inland cities. It became the artery through which the entire economy flowed. And the Hyundai estimate of 28 billion won, the number the Ministry of Construction had publicly mocked, when you ingested it for inflation, it turned out to be almost exactly right. The other companies had been the ones who didn't know what they were talking about.

• 1:23:46Speaker 01

  Chung finished his portion of the work with a modest profit. But the real prize wasn't the profit. It was the friendship that he created with President Park that would last until Park's assassination in 1979. Chung became a frequent visitor at the Blue House, joining Park on Thursday evenings for informal dinners in the private second floor quarters. They would sit for hours in casual clothes, drinking, talking about Korea's future. Park took to calling Chung his Minister of Construction. A mutual friend said both men believed in the same thing. They both believed in the power of human will. They both believed in Korea's economic future had to be built on the back of that will. And both of them also believed just as deeply in using Western technology to do it.

• 1:24:31Speaker 01

  In many ways, Park became a second father to Chung. They shared an absolute conviction that Korea's destiny was something you built with your hands, not something you waited for. Chung was now 54 years old, and in many ways, he was just getting started. Chung, who had started his career fixing other people's cars, decided it was time to start making his own. Cars mattered to him in a way that went beyond business. A car has upward of 30,000 parts, and building one doesn't just create jobs in the factory, it sends ripples through the entire economy. In Cheng's view, a country that could build a car could build anything. And wherever that car was exported, people saw the nation that had made it. He put it memorably, cars are like national flags with wheels. If we make good cars and export them, they drive around the world spreading Korea's technology and level of industrialization.

• 1:25:23Speaker 01

  And Korea desperately needed that kind of visibility. But two recent attempts by other Korean companies to assemble cars had already failed. Most of the country's industrialists had concluded that entering the car business was premature. The smart money went into making auto parts, not actual cars. When Chung announced that Honda was going to build cars, the Korean business community was stunned. Chung was undeterred. In 1966, he heard that a team from Ford was visiting Korea, evaluating potential partners for an assembly joint venture.

• 1:25:55Speaker 01

  Hyundai was not on their list, and that made sense because at the time Hyundai was a construction company. Chung moved in anyway. He called his brother, who was in the United States, negotiating a loan for the cement plant. The cement could wait, get to Ford's headquarters, and negotiate an automobile assembly contract. His brother asked him how he was supposed to convince one of the largest car companies on earth to partner with a Korean construction firm that had never made an auto part or cars. Chung gave the answer he always gave. Have you tried? They managed to get the Ford executives to come to the Hyundai office. Chung began talking them through the parts of a car in detail from his decades-old memory. He remembered all the parts, and only now it was suddenly paying off in a conference room with Ford.

• 1:26:40Speaker 01

  Ford had planned three days of interviews with various candidates, and Chung ended the interview process in two hours. Ford chose Hyundai. In December of 1967, he established the Hyundai Motor Company as a separate entity from Hyundai construction. He picked Yulzan as the factory site because it was a port city with deep water harbor that would soon be connected to every major Korean city by his new highway, and from which Hyundai could both import equipment and eventually export cars. The initial assembly plant went from groundbreaking to full scale operations in under six months, which set a record for any Ford assembly factory anywhere in the world. I wish we could build that fast today. But the arrangement with Ford was what

• 1:27:22Speaker 01

  every developing country auto industry look like in that era. Knock down kits shipped from abroad, local assembly. Foreign partners keep all the design and engineering.

• 1:27:34Speaker 01

  Ford's terms kept Hyundai permanently dependent on them. They were parts assemblers, not partners. The breakpoint came when Ford proposed what they called a world car project. Under the plan, Hyundai would build four designed engines that would be mounted on chassis made in Australia with transmissions made in Japan. To Chung, this was a national insult. How could Hyundai or Korea build any stature as a car manufacturer by participating anonymously in some grab bag assembly scheme? Ford was being imperialistic as he saw it. And then Ford's president for international operations flew to Seoul and proposed the next step, absorbing Hyundai Motor Company entirely into Ford. And that was a step too far. Chung lost it. I'll never take down a single Hyundai sign with my own hands.

• 1:28:20Speaker 01

  Even if a business is struggling and everything seems hopeless, I will make it work. Not once have I ever packed up and quit halfway through. Quitting is not in my dictionary. This guy had so much fight in him. You don't walk away from things. Remember the bridge, the Thailand Highway. The name is worth more than the money. But they couldn't just make their own cars from scratch, at least not yet. They still needed a technical partner, but just as with the Germans earlier, they would learn all they could from them. They searched the world for one who would hand over technology without demanding control. They talked to General Motors. As one of Chung's brothers put it, we wanted to run the company our way, but GM wanted to run the company their way.

• 1:29:03Speaker 01

  That was the point of disagreement. They approached Volkswagen. They approached Alfa Romeo. Same problem. Nobody wanted to give Hyundai the independence Hyundai was demanding, and honestly, from their perspective, why would they? Hyundai could easily turn around and compete with them in their own markets. Finally, Hyundai turned to Japan, their former colonizers of all people.

• 1:29:25Speaker 01

  Mitsubishi was trying to expand and compete with the bigger Japanese firms, Toyota and Nissan. They offered Hyundai a pure technical licensing agreement, no financial partnership, just licensing fees. Hyundai could build its own cars under its own name using Mitsubishi engine and transmission designs. Now they needed someone to design the car. They flew to Europe and made two critical hires.

• 1:29:50Speaker 00

  College football is back. So Hilton called and meet the superstition concierge to make your fan rituals a reality. Need a room to match your lucky number? We got you. Wanna make sure our team doesn't wash your lucky jersey? Ooh, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching band wake up call at 5 55 in 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton for the stay.

• 1:30:20Speaker 01

  Gorghetto Giorgio, a Vital Design, who had styled cars for Elfur, Romeo, and Fiat, would design the exterior. And George Turnbull, who had just resigned as the president of British Leland over a policy dispute, was brought in to run the operation. Turnbull was invited to Korea for a tour and was immediately taken with Chung. His first impression was vivid. That man is so bright, it's unbelievable. He's practical to the point where it hurts. He must have taught himself finance, and he's a great motivator. He put the fear of God into people. Turnbull was hired as vice president in February of 1974. He brought in more engineers. They came up with a simple and unglamorous design. That was fine. They weren't building a luxury car, they were building Korea's first national car. And then came the construction of the plant.

• 1:31:05Speaker 01

  Turnbull arrived at Olsan and was told where the factory would be built. His engineers looked at the site and informed Chung that he had chosen a swamp. Chung was unmoved. This is where he wanted his factory, so they drained the swamp. Then it was winter and the concrete pilings for the factory walls cracked repeatedly in the extreme cold. Cheng was unmoved again. Some of the equipment was installed before the factory walls were even in place. Turnbull, the conservative British executive, could barely believe what he was watching. Normally, putting a car into production took four years. Hondai did it in two. Cheng made frequent inspection trips down to Olsen. He would leave Seoul at four in the morning with one or two assistants for the long drive south. He liked to say on those drives that he was driving on his road, and he was happy.

• 1:31:52Speaker 01

  By 1976, the plant was complete and the first cars rolled off the assembly line. Chung named the model Pony. He hadn't done any market research. Chung and his company had simply designed and built the car they thought the Korean people should have. President Park guaranteed the financing, Hyundai built it, it was Korea's first national car. And then Chung did something that surprised even Turnbull. Within weeks of the first pony rolling off the line, Chung announced that Hyundai was going to export five thousand of them overseas.

• 1:32:23Speaker 01

  Turnbull was horrified. The Koreans might buy a car of unproven quality because they didn't really have an alternative, but foreign buyers did. If foreign buyers rejected the pony, Hyundai's reputation would be damaged for years. Chung didn't care. He had promised President Park that he would export and he was going to export. And what he did next is genius.

• 1:32:44Speaker 01

  He was not going to send all the cars to one test market. He was going to spread them across several countries and several different parts of the world. Nigeria, Taiwan, Peru, Ecuador, Saudi Arabia. They all had different climates and different road conditions and different customer expectations. So why did he do this? Because he wanted to learn. He would do his market research after the cars were built. He would learn, as he always had, by doing. The results were educational to put it mildly. In the tropical heat of Nigeria, the vinyl roofs peeled off like banana skins. In Saudi Arabia, the sun faded the paint. In multiple countries, the cars had serious mechanical problems, especially with steering and brakes, because the roads they were driven on weren't paved.

• 1:33:29Speaker 01

  But Honda was forced to upgrade the quality of the cars significantly and probably much sooner than they would have been forced to if they had stayed inside the protected Korean market. One of the main limiters of potential is the fear of embarrassment. People don't take risks because they fear looking embarrassed. But Chung proved that if you're willing to endure temporary embarrassment, you can gain a long-term advantage. It wasn't failure, it was learning. And while all of this was happening, Cheng was already thinking bigger, much bigger. In the mid-1970s, the total car market in Korea was about 30,000 units a year. Chung announced plans to build a new factory with capability for 300,000 cars a year, 10 times the size of the entire Korean market. His colleagues thought, not for the first time, that he had lost his mind.

• 1:34:18Speaker 01

  Where were they going to find 300,000 buyers? Cheng's answer was that the Korean market was going to grow enormously as the country emerged from poverty, and the new car was going to be designed mostly for export anyway. And he had a target in mind. General Motors was simultaneously building a new factory for their own world car program, and GM's targeted production was, of course, 300,000 units. GM's construction cost was $3 billion. So Chung studied GM's plans and came to two conclusions. First, Hyundai was going to match GM's capacity. Second, they were going to do it for one-tenth the cost. He personally reviewed every aspect of the plant design with his engineers. The bricks in the factory walls were reduced in width. The windowsills, which required expensive imported wood, were made narrower.

• 1:35:05Speaker 01

  The windows used slightly thinner glass. Every cost that could be shaved, Chung shaved in only a way that a man who was forced to eat bark to survive could. The factory opened in 1980. It was functional, if not beautiful. It produced the targeted number of cars, and it did exactly what Chung had estimated $300 million, one-tenth of what GM spent. And in 1986 they did. The Hyundai XL, a redesigned subcompact priced at $4,995, launched in the American market. No other car in its class was anywhere close to that price. It was aimed at used car buyers who could now afford a new car for the same money. The fit and finish were not perfect. Nobody claimed they were selling a premium vehicle. But in the getway you pay for market, the Excel was instantly recognized as a good deal.

• 1:35:51Speaker 01

  First year sales were projected at 100,000 and came in at 168,000 units. In 1987, sales hit 264,000 units. The Excel was rated the number one imported car in America both years. No car company in history had ever achieved that kind of initial success in the American market. Thanks to Chung, Korea had built its own car and sold it in the most competitive automobile market on earth. In 1968, President Park designated shipbuilding as a national priority. He asked the country's major conglomerates to step forward. Samsung passed, LG passed, only Chung said yes. And of course, he had no idea how to actually build a ship, but his reasoning was practical, as always. Building ships, he explained, is similar to combining civil engineering, architecture, mechanical facilities, and electrical work from the construction industry.

• 1:36:39Speaker 01

  Everyone else looked at shipbuilding and saw a new industry, and Chung looked at it and saw the same industry he was already in, just rearranged. But shipbuilding required a staggering amount of capital. A world-class shipyard would cost roughly $900 million, and Korea's shipbuilding capacity at the time was virtually zilch. The largest vessel ever built in the entire country was 17,000 tons. Never one to think small, Chung had something else in mind. He wanted to build 260,000 ton supertankers, 15 times larger than anything Korea had ever produced before. He went to the Americans for the loan. They said no. He went to the Japanese. They looked at the proposal and concluded that Korean technology was too primitive and said no. Chung went back to President Park and told him the truth.

• 1:37:26Speaker 01

  Nobody would lend them the money. And Park turned to one of his vice prime ministers in the middle of the room and said, reject all of Chairman Chung's business proposals going forward. Make sure the government never does any business with him again. And then he went quiet. A long silence, long enough that Chung had no idea what was coming next. And then Park spoke again. You knew this was going to be difficult. If you already considered all of this and still went forward, you need to do it, no matter what. Now go try Europe. Chung got on another plane. He carried it one belief with him that would sustain through everything that followed. Conviction creates indomitable efforts. This is the key to miracles. Conviction is contagious. In Europe, he connected with a British engineering firm called Appledore that promised shipyard blueprints in six months.

• 1:38:16Speaker 01

  He also found a Scottish shipyard where Hyundai engineers could train. But to get the loans insured, he needed to prove that someone would actually buy ships from a shipyard that did not exist yet. And for that, he needed a bank. So he went to Barclays and they told him what everyone else had told him. Korea had no experience or expertise. The answer was no. And then Chung did something I genuinely love. He pulled out a 500 won Korean banknote and slid it across the table. On the bill was a picture of a ship. It was a turtleship, the ironclad warship Korea had used to defeat the Japanese Navy four centuries earlier. His argument was that Barclays did not actually know who they were dealing with. This small country they were dismissing had a maritime tradition they had never bothered to learn about.

• 1:39:04Speaker 01

  Koreans had built ironclad warships before any European nation had thought of it. And then he made the larger argument. Don't you know that the person who thinks a job is possible is the one who's going to get it done? A job can be done only by people who truly believe that it can be done. If someone else in Korea believed that they could build a shipyard, they would already be here sitting in front of you. But they're not here because they don't believe it's possible. I'm here because I know it is. Conviction is contagious. It worked, they agreed. But there was still a catch. Chung needed a buyer. He needed somebody willing to sign a purchase order for ships that would be built in a shipyard that did not exist by a company that had never built a ship. So we started carrying three items with him everywhere he went.

• 1:39:52Speaker 01

  A photograph of a desolute beach showing pine trees and thatched houses, a map and blueprints for a 260,000 ton tanker. His pitch was pretty simple. If you buy this ship, I will build a shipyard on this sand and I will deliver it to you. If you're thinking this sounds a bit crazy, he'd agree with you. He admitted he wouldn't have blamed anyone for thinking he was crazy. But what he needed was to find someone even crazier than himself.

• 1:40:18Speaker 01

  And eventually he found someone. A Greek shipping magnate named George Levanost looked at the photographs of the empty beach, looked at the blueprints, and signed a purchase order for two oil tankers. Then he handed Chung a check for 1.4 billion won. There was one detail Chung had not mentioned to anyone. They didn't actually own the beach in the photograph. They bought it the moment the money came in. And then came the building. When Chung got back to Korea with the contract in hand, many of his executives were uneasy. If this venture failed, it would likely bankrupt the entire company. Cheng's response was vintage Chung. What's the big deal? A ship has an engine inside, an exterior made of steel. Ships resemble power plants, which Hyundai has built many times. The conventional approach would have been to build the shipyard first and then start building the ships.

• 1:41:07Speaker 01

  That was sensible, but it was slow. Chung did the math. Five years of occurring interest on their current loads would bankrupt them before they ever launched a vessel. He told his team over and over, loans beget interest, interest begets more interest. Time is the greatest enemy of construction firms. Speed mattered. So I kid you not, Hyundai would build the shipyard and the ships at the same time. After a lavish groundbreaking ceremony, in March of 1972, more than 2,200 workers started working on land reclamation, the construction berth, a training facility, and two oil tankers. all at the same time. Nobody at Hyundai had ever built a ship. They learned as they did it.

• 1:41:47Speaker 01

  And when I say they learned as they did it, I mean that literally. At one point, the conditions of the European loan required them to buy a Goliath crane from a German manufacturer. They ordered the crane. They knew they needed one. They were not entirely sure what one even looked like. When it was time to wire the first ship, they realized that it did not have wiring diagrams. The engineer assigned to the job had never worked on a ship before, so they improvised. Entire sections of the ship got assembled incorrectly and had to be dismantled and reassembled. But construction never stopped. It always continued. At one point, the ships outpaced the shipyards. The forward section of one of the tankers was completed before the Goliath crane from Germany had even arrived.

• 1:42:32Speaker 01

  They needed the crane to move the massive section into position, and they didn't have it. Anyone else would have waited, but Chung ordered the section to be placed on a trailer and rolled into place with a bulldozer pulling in the opposite direction to keep the trailer under tension. No experienced shipbuilder would have ever attempted anything this crazy because it violated every standard, but it worked. A typical Japanese shipbuilder at the time had 20% of its workers in engineering and technical sport. Hyundai had 11. The Japanese had 14% in supervisory roles. That meant 82% of Hyundai's people were doing actual hands-on work compared to 60% at the Japanese competitors. This was Chung's philosophy made operational. Less overhead, more output. Workers got up at dawn, splashed water on their faces, and worked until they fell asleep in their shoes.

• 1:43:23Speaker 01

  They ordered materials for six ships and received enough for 12. And before the first two ships were even finished, more orders started coming in because Honda had ruthlessly underbid the competition by 15% to win them. Which meant that before they had launched a single vessel or finished building the shipyard, they already had a backlog. Chung was now racing to finish the first two ships just to make room for the next four. Two years and three months after Chung had broken ground on an empty beach, the first stage of the shipyard was complete. It could build ships up to 700,000 tons. It was the largest shipyard on Earth. In June of 1974, President and Miss Park were invited to the christening of the two tankers. The first ship launched was the 260,000 ton Atlantic Baron.

• 1:44:09Speaker 01

  Park's confidence in Chung had been vindicated. Korea was now in the shipbuilding business. It was a glorious day. British journalist Simon Winchester visited the Olsen factory years later and could not help comparing it to the empty shipyards of his own country. What impressed him most was the pace. A ship order placed at Hyundai took half the time it would take in a European yard, and at a price a good 10% lower than the nearest price competition. British engineers who worked there confirmed it. One of them, Tony Robbins, said, You couldn't believe what they do. They break all the rules. Their equipment is old, they make their own tools. Nobody else would use them. And then he added,

• 1:44:50Speaker 01

  They deliver what we asked for on time. I don't understand it, but whatever it is they do, it works. Another British engineer, David Gregg, described the morning routine. It's a very military oriented society. In the morning, you go there and you will have a line of people, and they'll all be standing at attention to get a work assignment. Once a week, the director of the division would address the workers through a loudspeaker.

• 1:45:13Speaker 01

  The message was always the same. We expect the best, we are Koreans, show the world we are Koreans. Just as things were starting to go well, the world collapsed. In 1973, OPEC raised oil prices, which triggered a global recession. Demand for oil supertankers evaporated overnight. Livinos abruptly canceled his contract for the two ships and forfeited his $2 million down payment. The Japanese and Hong Kong orders got canceled too. Honda had just learned how to build ships that nobody wanted. His board urged him to stop building the abandoned vessels, but Chung, of course, refused. If they stopped, they would lose everything they had already invested, and they would have to lay off the men who had slept in their shoes for two years building that shipyard. And he would not do it.

• 1:45:58Speaker 01

  He finished the ships nobody wanted and then created Hyundai Merchant Marine to buy them himself. Here was his logic Korea was paying foreign firms to transport its imported oil. That money was flowing out of the country every day. So Chung went to President Park, who very quickly introduced new regulations requiring all crude oil shipped to Korean refineries to be carried on Korean vessels.

• 1:46:22Speaker 01

  And of course, Chung was the only one with Korean vessels. Chung now used his own ships, which broke what had been a foreign monopoly on Korean energy transport. Within a few years, Hyundai Merchant Marine was one of the largest shipping companies in the world. And when the market for large ships eventually recovered, Hyundai was perfectly positioned. They had the technology, they had the skilled workforce, and they had the shipyard and the fleet. Competitors could not match them on price or speed. A wave of British technicians, many of them from Britain's stagnating shipbuilding industry, moved to Olson as contract workers. Reporter Simon Winchester noticed the irony first. British shipbuilders whose own yards sat empty were now flying to Korea to teach at a shipyard that could not build fast enough to meet world demand.

• 1:47:08Speaker 01

  The man who could not be stopped had found a way again.

• 1:47:12Speaker 01

  The path was blocked, so he went up a wall, across the ceiling, and dropped onto his target from above. The bed bugs in that bunkhouse had taught him well. The same oil shock that destroyed Hyundai's shipbuilding business was about to hand them the biggest contract on earth. By the mid-1970s, the OPEC nations were staggeringly rich. Saudi Arabia, Kuwait, and the Gulf states had cash reserves that dwarfed their infrastructure. They needed ports, highways, military installations, and entire cities built from scratch. And they needed somebody to build them. This was exactly the opportunity Chung had been building towards since Thailand. But the competition was ferocious. The world's biggest and best construction firms were all chasing the same enormous contracts. Companies with decades of experience, deeper pockets, and real relationships.

• 1:48:00Speaker 01

  Chung did not care. He had been underestimated all of his life. He sent his brother to the Middle East to look for business. And at the traditional New Year's gathering with his senior executives in early 1976, he made his position clear. We have suffered the pain of deciding on stability or adventure. We have concluded that we will accept the challenge of major adventure called the Middle East. The first project was a training shipyard for the Iranian Navy, and it taught Hyundai immediately that this was not Thailand. The temperatures were extreme. The construction site was desolate. Koreans were not welcomed by the local population. The design and construction specs were far more rigid than anything they had seen in Southeast Asia. One Hyundai crew leader reported back to them from Iran the conditions here are impossible, but we are surviving.

• 1:48:49Speaker 01

  I know we can make it here. They completed the project, and then Chung went after the real prize, Jebel.

• 1:48:55Speaker 01

  Jabel was a fishing village on the eastern coast of Saudi Arabia, and the Saudi government was determined to transform it into an industrial mega city. The specific project on offer was an open sea tanker terminal and harbor facility so vast that construction experts around the world were calling it one of the engineering wonders of the age. The terminal would berth four oil supertankers simultaneously, 12 kilometers out in the open sea. Honda had no experience designing or building anything even remotely like this. Chung personally took control of the bidding process. And this is where the story takes a turn that almost defies belief. Nobody at Hyundai knew how much it would cost to build an open sea tanker terminal. Chung worked out an estimate, and one of his senior aides, a man called Cheng Cap Wan, looked at the numbers and told them the bid was too low.

• 1:49:47Speaker 01

  They would lose money. They were entering a region they barely knew, building something they had never built.

• 1:49:54Speaker 01

  Wan urged Chung to raise the bid by $100 million, but Cheng refused. No, we have to secure this project. Otherwise, I cannot face President Park. Cap Wan was sent to submit the bid at the ceremony, but Cap Wan, still convinced that his boss had made a catastrophic error, decided on his own, without telling anybody, to raise Hyundai's bid by $60 million. He submitted a bid of $931 million, which is higher than the number Chung had authorized. The bids were opened, and the Saudi Minister of Communications read them out. When he got to the American firm Brown in route, the number he announced was $903 million. Cap One's heart stopped. He had overbid. He had just raised the number against direct orders.

• 1:50:41Speaker 01

  He had just lost his country, a contract the size of which had never been awarded to a construction company before. His career was over. He later admitted he seriously considered drowning himself in the Persian Gulf. But then the minister made it a clarification. Brown and Root's bid covered only the marine portion of the project. Hyundai's bid at 931 million covered the entire scope of work. The two numbers were not comparable. Hyundai had won. When Chung walked over and congratulated Capwan, still assuming his original lower number had been submitted, Capwan confessed what he had done. Cheng was furious. He turned and walked away.

• 1:51:22Speaker 01

  But the contract was signed. Had $931 million. It was roughly half the Korean government's entire annual budget. It was the single largest construction contract ever awarded to any company in the history of the world. Chung later commented with a wry smile I was glad that Cap Wan did not have to kill himself and that our country earned an additional $60 million.

• 1:51:46Speaker 01

  Cheng was not done negotiating. After winning the contract, a Saudi official told him that it was customary to pay a 5% commission on all such projects. Cheng resisted. The official got angry and told him that he had the power to rescind the entire contract if the fee was not paid. Cheng offered 2%. The official who had never encountered that kind of aacity in dealings with his government agreed. Chung had saved millions of dollars before the first shovel hit the sand. Now they had to actually build it. The technical scope was staggering. The terminal required installing 89 steel jackets into the seabed, each one the size of a 10-story building, each one weighing 500 tons. Each pair of adjacent jackets had to be positioned at 20-meter intervals with a margin of air no more than 5 centimeters.

• 1:52:34Speaker 01

  More than 15,000 concrete piles, each 60 meters long, were driven into the seabed. Each one was struck more than 5,000 times with a remote steam hammer. Cheng insisted that every bit of material for Jabel would be manufactured at Hyundai Heavy Industries back in South Korea and shipped it all to Saudi Arabia. He was stitching together two mega industrial projects across the Indian Ocean. The 89 steel jackets were loaded onto barges and were sent on a 12,000 kilometer 35-day voyage through often stormy seas to the Gulf. And he did not insure any of it. His subordinates thought this was lunacy. If a single shipment was lost at sea, the financial damage would be catastrophic. Chung's reasoning was rational. Even if the cargo were insured, insurance companies would require long investigations before paying out.

• 1:53:24Speaker 01

  By the time they paid, Hyundai would be in breach of contract with the Saudis and would lose the whole project anyway. Insurance, he concluded, was a psychological comfort in this case, not actual protection. Instead, he designed a way to seal the ends of the jackets and the pipes to create huge air pockets that would keep them floating if they went overboard. If anything fell into the ocean, a trailing ship could retrieve them from the surface.

• 1:53:52Speaker 01

  19 shipments were made across the Indian Ocean. Only two minor incidents occurred. The men who actually built Jabai lived in conditions that made the expressway in Thailand look like the four seasons. At peak, nearly 10,000 Koreans were on site, working 10 hours a day, seven days a week. Their families had to stay behind in Korea. Most workers saw home only once a year. Wages were doubled what they could have earned back home, which is why they came. But the heat was extreme. The isolation was total, and the cultural gulf between Korean workers and their Saudi hosts was vast. One Hyundai manager named Park Kwan volunteered for Saudi Arabia straight out of college in 1977. His reasons are telling. I wanted to go for several reasons. Yes, it was a good opportunity to make money, but it was much more than that.

• 1:54:38Speaker 01

  To me, it was an opportunity to serve my country. I wanted to help build Korea so my children would have a better life. He spent three years in the desert. His first visit home came after a full year on the job. Hyundai flew in Korean cooks to make traditional food. They built recreational facilities, they did what they could. But the reality was that all of these men were living on the other side of the world, building something no Korean had ever built, and they would not see their families for months at a time.

• 1:55:09Speaker 00

  College football is back. So Hilton called and me, the Superstition Concierge, to make your fan rituals a reality. Need a room to match your lucky number? We got you. Wanna make sure our team doesn't wash your lucky jersey? Ooh, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching band wake-up call at 5.55 and 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton for the stay.

• 1:55:39Speaker 01

  The intensity of the Korean work ethic became legendary in the Gulf.

• 1:55:43Speaker 01

  A Brown and Root engineer who worked alongside Hyundai Cruz wrote a poem about them in the style of Kipling. The poem went like this When we're hungry, they smile. When we're tired, they get up. When we're sleeping, they hustle. And it ended with a warning. It's not good for Brown and Rooter's health to bustle with the Hyundai style. Chung made his unannounced inspection visits here too, same as he had done at every other Hyundai site in the company's history. His eyes scanned everything. One manager noted that Chung was particularly obsessed with storage facilities. Doesn't matter how creatively you arrange things, you will always find a better way. On one visit, he discovered the project accounts were being kept in expensive ledger books. He ordered them immediately replaced with cheaper ones.

• 1:56:29Speaker 01

  The man was managing a billion-dollar project in the desert and he was worried about the price of the notebooks. That was Chung. But the inspections were not only about cost. After reviewing plans and progress, Chung always made a point of spending time with the workers, regardless of rank. He would play sports with them. He would wrestle them. He often won. What mattered was that the workers saw the chairman in the dirt with them, the same way President Park had found him sleeping on the ground at a construction site years earlier. The message was the same as the one he had been sending since the rice shop. We're in this together.

• 1:57:07Speaker 01

  The total labor was 2.5 million mandates. It would later be described as the largest scale project since the Normandy landings in World War II. The numbers that followed tell the rest of the story. Hyundai earned $2 billion in gross income from foreign construction projects in 1979 alone. It was now the fourth largest construction company in the world. Revenue had grown over a hundredfold in five years. Nearly 300,000 Korean workers from two dozen companies had been sent to the Middle East between 1977 and 1979. But Hyundai outpaced every other Korean company in both the size of its projects and the size of its profits. One senior Hyundai executive captured the scale of what had just happened. It was the first time in our 5,000-year history that Korea was making big money.

• 1:57:52Speaker 01

  The president of the Korean Exchange Bank called Chung personally after the capital started flowing home. He told Chung that the deposits coming from Jabel were the single largest amount of foreign currency the Republic of Korea had received since its founding. For more than two years, every single month, Hyundai was sending tens of millions of dollars back to South Korea. That money became a decisive factor in stabilizing the country's currency during a period of severe economic strain. Chung had always resented the accusation that Honda had grown fat on domestic government contracts. The Middle East became his answer to those critics. No Korean government connections helped you win a contract in Saudi Arabia. You won on price, on capability, and on a willingness to do what the competition would not do.

• 1:58:40Speaker 01

  Honda had all three. The man with a sixth grade education who could not read an American blueprint in 1957 was now running the largest construction project in history halfway around the world. People had started calling him the bulldozer. He accepted the name, and in a way he kind of liked it, but with one correction. He was not reckless. He was not impulsive. He was, as he put it himself, the thinking bulldozer. He wrote, If you search for a method, it will come to you. If you can't come up with a method, it's because you didn't think hard enough. Before starting any project, I spent an enormous amount of time and effort thinking, analyzing, and planning every detail. When it's time to implement these plans, it may look like I'm working off the cuff or even being reckless.

• 1:59:26Speaker 01

  But if I hadn't sat down first and planned everything out, the Hyundai group of today would never have existed. By the mid-1980s, Hyundai was doing over $10 billion in annual sales and was the largest company in Korea. Chung was approaching 70, and he was nowhere near finished. But there was a gap between what Korea had become and how the world saw it. Korea had built the highways, the ships, and was now selling cars in America. It was an economic force by any measurable standard. But the world still treated it like a pawn in the Cold War, and much of that world still shunned it because of its history and proximity to communist states. Despite everything Korea had achieved, the world still didn't take it seriously. South Korea needed a stage. So in October of 1979, just three weeks after Presidential Park's assassination, the mayor of Seoul formally announced that the city would bid for the 1988 Olympics.

• 2:00:19Speaker 01

  The reaction in Korea was a mess. The economic planning board opposed it. South Korea was in an economic downturn and the investment required was going to be staggering. Even the mayor himself started having second thoughts, and most government officials quietly pulled back from the effort because they knew their reputations would be dragged down with whatever happened next. Their calculus was ugly either way. Korea would probably lose the bid to Japan, which would be embarrassing, or Korea would somehow win the bid and then fail to deliver on the games, which would be much worse. Somebody had to take the lead effort, and nobody wanted to. The mayor publicly asked a business leader to take the job. Chung got the call, and just like that, he was named chairman of the Olympic Bidding Committee.

• 2:01:06Speaker 01

  He approached it the same way he approached every other big job he had ever taken on. This was a chance to show the world what modern Korea actually looked like, which was the same promise he had made when he named his company Hyundai 40 years earlier. The bidding session took place at the 84th session of the International Olympic Committee in Baden Baden, Germany, in September of 1981. The choice came down to Seoul or Nagoya. Everyone assumed Nagoya would win. Korea was still considered a backward country, possibly even incapable of hosting an event this size.

• 2:01:40Speaker 01

  Japan had already hosted the Olympics in 1964 and knew what it was doing. The Japanese delegation was so confident of victory that they actually scheduled their victory banquet before the vote had been taken. And instead of spending their time selling the committee on the merits of Nicoya, they spent much of the time disparaging Seoul. Chung did the opposite of all of that. He rented three houses in Baden Baden as his base of operations and pressed Hyundai's Frankfurt office into service as backup. His team compiled personal dossiers on every IOC delegate, and over the next 10 days he met with each one of them, one by one. He lobbied representatives from developing nations to support one of their own. He lobbied the developed nations to support the underdog, and he kept emphasizing one simple fact.

• 2:02:27Speaker 01

  Seoul's facilities were already 60% complete. Nagoya's plans were still on paper. Then the Japanese tried to sabotage the Korean bid. They planted a question through a Soviet gymnastics official asking whether Korea was even financially stable enough to host the games. But Korea had brought Yu Chan soon with them, the former Deputy Prime Minister for Economic Planning. He dismantled the question on the spot and exposed the Japanese for having planted it. It was a tactical disaster. And then there was the gift question. The Japanese handed out expensive watches to the IOC members. Chung thought of that kind of extravagance was going to read like an attempt to buy the vote. So he did something different. He had fresh flowers delivered to each delegate's room every single morning, with a personal note of appreciation attached.

• 2:03:16Speaker 01

  The softer approach worked. Seoul won 52 to 27. Chung called it the miracle of Baden Baden. Korea then spent close to $6 billion on the games themselves, and you could see the country's ambition in every line item. There were new stadiums and athletic fields and housing for all athletes. There was a new subway system which Hyundai built. There was a new highway called the Olympic Expressway, which Hyundai also built. The Han River got cleaned up, parks went in along the waterfront, and the south side of the river was opened for development and quickly became Seoul's most expensive real estate. On September 17th of 1988, the Games opened. Over 150,000 visitors attended. It was the largest Olympics in history. Korea threw its coming out party and the whole world came.

• 2:04:02Speaker 01

  To understand Cheng, you have to understand how he ran his family. He had eight sons and one daughter, and every one of his sons shared the same middle name, Mong. It's the Korean word for dream. They were, in a very literal sense, the living trademark of the company. From the time they were children, Chung expected every one of them to join the business, and every one of them did. He was strict with his kids in a way that most of us would find extreme. He gave them a very small allowance. He would not let them be driven to school in the family cars. They took the bus just like everyone else. His reasoning was characteristically blunt. You will only appreciate the happiness of riding in a car you bought.

• 2:04:42Speaker 01

  with your own effort if you first experienced the inconvenience of a crowded bus as a child. Every morning at 6 o'clock, all of his sons and their wives arrived at the family home for a traditional breakfast of soup, rice, and fresh fruit. The sons and Chung would sit together and discuss business while the wives met in the adjacent room to discuss family matters. At 7 sharp, Chung would gather his sons and lead them out of the house, and then all of them would walk two and a half miles to Hyundai headquarters in downtown Seoul in silence. There was no conversation, there was no small talk, just a formation of men moving through the city toward the company they all worked for. Cheng did this every working day for nearly 30 years. His wife Brun Junsac held the whole family together while Chung was out building the empire. And there's a story about her that tells you almost everything you need to know about the kind of woman she was.

• 2:05:33Speaker 01

  One night two thieves broke into the Chung household. They went into her room, tied her up, put a quilt over her head, and demanded her valuables. She calmly threw the quilt off and said to them, You seem to know whose house you are breaking into. I'm not going to make any noise, so let's talk and try to find a compromise. The thieves, startled, became a lot less aggressive. She gave them a watch she had been saving as a wedding gift for one of her sons, along with a small amount of cash.

• 2:05:58Speaker 01

  The thieves demanded to see the American dollars she had hidden away and the golden rice bowls they believed she must own. She replied calmly that they had never seen any dollars in the house and she had never known anyone in Korea who ate out of golden rice bowls. Frustrated, the thieves left. After they were gone, she walked into the next room and woke up her husband. She had concealed his presence in the house the entire time. The family did not escape tragedy. Cheng's eldest son, Meng Pil, was killed in a car accident on the expressway, which was the very highway his father had built. His fourth son struggled for years with depression and the pressures of running one of Hyundai's subsidiaries. In 1990, he took his own life. These losses devastated Cheng, but he did what he always did.

• 2:06:43Speaker 01

  He kept going. In his final years, as his health started to decline, Cheng divided Hyundai amongst his six surviving sons. Each one received at least one company. The unified empire that he had spent a lifetime building would not survive him as a single entity. But the fragments, all of them, would carry his name across the world. There's a pattern in Cheng's life that you've probably picked up on by now. He builds something, someone or something takes it from him, and he builds something else, something bigger. The Japanese took his rice shop, the Japanese took his auto shop, inflation nearly took Hondai during the Gorian Bridge, the oil crisis nearly took the shipyard, and every single time Chung's response was exactly the same. He refused to stop. But in early 1990s, something different happened.

• 2:07:29Speaker 01

  This time the force that came for him was not a foreign colonizer or global market or an inflationary shock. It was his own government. Chung had always had an uneasy relationship with Korean politics. He had survived multiple regime changes, watched governments rise and fall, and paid tribute to every single president who held the office during his career. Not because he wanted to, but because that was how the system worked. He later confessed this publicly. He and other major Korean business leaders had been making regular payments to Korean presidents as a matter of routine for decades. Under Park Chung-hee, it was roughly 500 million won twice a year. Under the presidents who followed Park, the payments continued. Every major company did it. It was the operating system of Korea at the time, and everyone inside the system understood the rules.

• 2:08:18Speaker 01

  But when President Ro Tewoo took power in the late 1980s, the rules changed. Ro started curbing business expansion, restricting cadet, and trying to force major companies to narrow their operations. Chung saw these policies as dangerous and anti business at a moment when Korean companies needed to be expanding, not contracting. And he said so. And he did it publicly. and loudly. He criticized the rogue government for how it was handling the economy. He said there was no credible political leaders in Korea. In Korean politics at the time, and politics today, frankly, you did not say these things about the sitting president walk away unscathed.

• 2:08:58Speaker 01

  And Roe did not let them. The government charged Chung with tax evasion over stock transfers he had used to reorganize his holdings, which was a practice that every major Korean conglomerate was using. The government came after him for hundreds of millions of dollars in back taxes, and they threatened to cut off Hyundai's access to bank loans, which would have been a death sentence for the company. Chung fought back, but eventually he was forced to pay $181 million. But something inside him shifted. In January of 1992, at the age of 76, Cheng Ju-young announced that he was running for president of Korea. His reasoning was direct. We have a pessimistic future with the present economy, and I have to do something about it. He believed, very sincerely, that running a government was no different than running a company.

• 2:09:45Speaker 01

  What Korea needed was sound planning, efficient management, rational allocation of resources, and tight fiscal controls. And those were all things that Chung had spent his entire life doing. If he could build highways and shipyards and cars, he could build a better government. He founded the United People's Party. An army of Hyundai employees joined the campaign. In the March National Assembly elections, the brand new party won 31 seats. Not bad for a party that had not existed a few months earlier. Chung campaigned tirelessly, crisscrossing Korea in his helicopter, making the same case to anyone that would listen. The government had grown too large, it was interfering too much in business, it had lost control of the economy, and it was bankrupt of ideas. In the December presidential election, Chung ran against Kim Jong Sam of the ruling party and the veteran opposition leader Kim De Jong.

• 2:10:38Speaker 01

  When the votes were counted, Kim Jung Sam won with 42%. Kim De Jung came in second with 34%, and Chung received 16%. He had lost, and it was one of the very few fights in his entire career that actually ended in defeat. The consequences were immediate and severe. Kim Jong-sam's new government charged Chung with illegal campaign financing, alleging that corporate funds from Hyundai heavy industries had been funneled into the campaign. Chung was interrogated for 12 hours. More than a hundred Hyundai executives were simultaneously under indictment. The Korean Development Bank froze Hyundai's loans, tax audits multiplied, government contracts dried up.

• 2:11:20Speaker 01

  One analyst at the time said no government official would even go out for a drink with Hyundai executives anymore. Of course, Chung was convicted. He received a three-year suspended sentence and he never actually served prison time. The court cited his advanced age, his contributions to national development, and his ongoing business activities. He later admitted a truth that he had always known but probably underestimated. There is one thing I fear the most as a business leader, regime change. Whether it's a coup d'etat or a democratic election, private businesses are always the first target. The presidential run had probably been doomed from the start, but it was sincere. No person had done more to build Korea. The man who had built the highways and the shipyards and the nuclear power plants genuinely believed that he could build a better government, and the country he had built punished him for asking to try.

• 2:12:12Speaker 01

  But here is the irony. They could not actually punish him. Sure, they could in optics, but not in any meaningful way. He had been convicted and he was supposed to go to prison, but he couldn't because he was too important to the Korean economy to be really punished. On June 16, 1998, Cheng Juyung, now 82 years old, climbed into the lead vehicle of a convoy of 50 trucks. Every truck was loaded with cattle. 500 head of Korean Henu beef cows, all of them raised on his beloved Sison farm, the farm he had reclaimed from the Yellow Sea.

• 2:12:46Speaker 01

  The convoy rolled north, toward the most heavily militarized border on earth. Cheng was the first South Korean civilian to cross the DMZ since the division of Korea. Four months later in October he came back with five hundred and one more one thousand and one cows total.

• 2:13:01Speaker 01

  One cow for the one he had stolen from his father sixty-five years earlier, and one thousand more for interest. The man who had run away from a peasant farm with nothing had returned as the richest person in Korea to pay back a debt of conscience that had been accruing for most of a century, in the only currency that made sense. Chung came home from that trip physically exhausted. He was frail and his health was failing. But he was also proud. He had accomplished something that diplomats had been unable to accomplish for decades. He had opened a door that two governments and a world of Cold War politics had not been able to open. He had built a commercial bridge, however briefly, between the two halves of a divided nation, his divided nation. Chung died in a hospital he had built. The hospital was in a city connected to the rest of the country by a highway that he had paved.

• 2:13:50Speaker 01

  The city was in a nation whose economic miracle bore his fingerprints on nearly every beam and rivet. And the date was March 21st, 2001. He was 85 years old.

• 2:13:59Speaker 01

  Five of his sons were at his bedside. When Cheng was born in 1915, Korea was a Japanese colony. The economy was agrarian. Rural poverty was almost universal, per capita income, somewhere between $50 and $80. When he died in 2001, South Korea was the world's 11th largest economy. Per capita GDP was roughly $11,000. That is a 140-fold increase in a single human lifetime. Cheng did not build that alone. Millions of Korean workers, dozens of other entrepreneurs, and several presidents all contributed. But no single private individual had a larger hand in what happened. In his living room was a piece of calligraphy he did himself that read, Diligence will overcome all difficulties. As far as anyone could tell, that was his most deeply held belief, a description of how he actually lived each day.

• 2:14:48Speaker 01

  One of his senior executives described what it was like to work for him in the early years.

• 2:14:55Speaker 01

  I worked 16 hours a day, seven days a week for 16 years. No holidays. If the chairman was working, so were we. We didn't mind, however. We learned from the chairman. We respected him. He was always very demanding, but he was a good teacher. Any honest accounting of Chung has to hold several truths at once. He was a genuine believer in equality, but he also ran his company like a tyrant. He believed all workers were equals, but he could be ferocious with those who disappointed him. He championed Korean self-reliance while being dependent at various times on government patronage. He publicly denounced corruption while having paid tribute to every president who held office during his career. He built institutions that lifted millions of people out of poverty while presiding over labor conditions that ground many of his workers down.

• 2:15:43Speaker 01

  It's true of any of us that if you hold a microscope up, there are all of these contradictions. Cheng Ju Young was not a saint. He was a builder. And the distinction matters. In the final pages of his autobiography, Cheng wrote, I have lived my entire life driven solely by the satisfaction derived from hard work. I buried myself in work because I enjoyed the very act of working. And having lived thus, my soul became one with work.

• 2:16:08Speaker 01

  And then he wrote this. I feel an infinite sense of pride that I've contributed my share to this country's breakthrough. Here's the detail that stays with me, and this is the detail I want to leave you with. Chung's father died in 1946, before the shipyard, before the expressway, before Hyundai was even anything other than a small outfit with a hopeful name and a sixth grade dropout running it. The man who had wept in the dirt in a soul bookkeeping academy and told his teenage son he was a nobody never lived to see what his son became. And Chung was still thinking about him decades later. In the introduction to a section of his autobiography about the Sizon Farm, he had reclaimed in the Yellow Sea, he wrote, I'm overwhelmed with grief that my father has passed away before seeing this place. But I console myself in the belief that were he here to be looking down from heaven, he would be heartened to behold the vast farm created by the son of a man who lived his entire life as a poor farmer.

• 2:17:03Speaker 01

  Because in the end, after all the highways and the ships and the cars and the billions of dollars and the political disasters and the cattle drives across the DMZ, after the Olympics and after the desert and after the shipyard, and after the dam and the bridge and the rice shop and the bed bugs and the bicycle, he did not know how to ride. After all of it, Chung Jiu Young was still thinking about his father, still trying to prove something to a man who had wept in front of him in a bookkeeping academy in Seoul and called him a nobody. He was not nobody. He was Cheng Juyang, and he helped build the modern world. Thank you for listening and learning with me.