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Halla Group

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The Halla Group is a South Korean chaebol involved in a wide variety of industries; ranging from manufacturing auto parts, to port building, to investment, to education, to sports entertainment, and others.

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[edit] History

[edit] From Hyundai, Halla

Halla’s founder, Chung In-yung, got his start working for Hyundai, which was founded by his brother, Chung Ju-yung. Chung In-yung was president of Hyundai Construction from 1953 until 1976. In 1962, while he was still working for his brother, Chung In-yung established Hyundai International as a manufacturer of heavy-duty industrial equipment.[1] Hyundai International became independent from Hyundai in 1975.[2]

In 1977, the Chung brothers had a disagreement about whether or not Hyundai should expand into the Middle East. Chung Ju-yung was determined to-do-so, but Chung In-yung was opposed. Ching Ju-yung elected to leave Hyundai and start his own Korean conglomerate, dubbed the Halla Group, whose name is an allusion to the tallest peak in Korea.[3]

[edit] Nationalization of Hyundai International

The late 70’s and early 80’s were a turbulent time for South Korea. On October 26, 1979, South Korea’s president Park Chung Hee was assassinated.[4] A senior military general named Chun Doo Hwan was placed in charge of the murder investigation. In December 1979, Hwan arrested the army-chief-of-staff, Chung Sung Hwa, as a conspirator in the murder. Despite another man being named interim president, Chun Doo Hwan became the most powerful man in Korea as the unchallenged leader of the military. In May of 1980, martial law was declared under Hwan’s guidance. On August of 1980, the Korean interm president resigned, allowing Chung Sung Hwan to seize the presidency.[5]

Chung Sung Hwan was determined to improve South Korea’s heavy equipment and petrochemical industries[6], and passed laws allowing for nationalization of such companies.[7] Hyundai International was one the effected companies, falling under government control in September of 1980.[8]

Without Hyundai International, Halla had to rely on the group’s other businesses. Since 1976, Halla’s subsidiary Mando International has been producing components for Hyundai cars. During the 80’s, Mando emerged as the dominant auto parts supplier in Korea.[9]

After losing Hyundai International, Chung In-yung had a chip on his shoulder; he wanted to match his brother’s successes at Hyundai. Halla expanded and diversified into new industries. The company entered a joint venture with Ford to manufacture automobile components. In 1995, the group expanded into post-secondary education, when they opened the Halla Institute of Technology. The same year, Halla opened what was considered the “Pride of Halla”, a shipyard in the south of the country. In 1996, Halla completed construction on one of the largest newsprint plants in Asia.[10]

On December 31, 1997, Chung In-yung stepped aside as the company’s chairman and named his second son, Chung Mong Won, as his replacement. During his tenure, Chung In-yung saw his company grow from a start-up to become Korea’s 12th largest business conglomerate.[11]

[edit] Korean Financial Crisis

In November 1997, the Korean Financial Crisis hit, which reduced the amount of capital available for Korean businesses. Many Korean companies had taken on huge amounts of debt which they were unable to pay. Halla itself had debt worth 20x the company’s equity. Halla had to borrow hundreds of millions of dollars from Hyundai to stay in operation.[12] When those fund ran dry, three of Halla’s largest subsidiaries (Halla Heavy Industries, Halla Merchant Marine, and Manado Machinery Corp) were forced into receivership; and eventually sold-off. Many smaller subsidiaries were also sold. Halla made arrangements with their creditors to reduce debt from 6.4 trillion Korean won to 4.2 trillionKorean won, and was able to hold onto one of its largest subsidiaries, Halla Engineering & Construction Corp.[13]

[edit] The Company Today

The Korean Financial Crisis was alleviated by a $57 billion bailout from the International Monetary Fund.[14] As the Korean economy in general recovered, Halla recovered too.[15] In January 2008, Halla announced that they would repurchase Mando for $686 million, after being forced to sell it a decade prior for $446 million.[16]

The Halla Group website states:[17]

In 1997, the Asian foreign currency crisis struck the company, but it successfully completed restructuring. Now, Halla is preparing for its second leap of faith, advancing into auto parts, construction, distribution, port, investment, education, sports, and many more areas.

Halla does not currently offer a line of industrial equipment like it has done in the past.

[edit] Equipment List

[edit] References

  1. History. Halla.com [November 27, 2009].
  2. A Korean Giant Spins Out of Control. The New York Times [November 27, 2009].
  3. A Korean Giant Spins Out of Control. The New York Times [November 27, 2009].
  4. 1979: South Korean President killed. BBC News [November 27, 2009].
  5. Chun Doo Hwan. Britannica.com [November 27, 2009].
  6. History. Halla.com [November 27, 2009].
  7. Chun Doo Hwan. Britannica.com [November 27, 2009].
  8. History. Halla.com [November 27, 2009].
  9. A Korean Giant Spins Out of Control. The New York Times [November 27, 2009].
  10. A Korean Giant Spins Out of Control. The New York Times [November 27, 2009].
  11. A Korean Giant Spins Out of Control. The New York Times [November 27, 2009].
  12. A Korean Giant Spins Out of Control. The New York Times [November 27, 2009].
  13. Halla Group Restructuring Case. InsolvencyAsia.com [November 27, 2009].
  14. A Korean Giant Spins Out of Control. The New York Times [November 27, 2009].
  15. Halla Group Restructuring Case. InsolvencyAsia.com [November 27, 2009].
  16. Halla to Buy Back Mando After 10 Years. The Korea Times [November 27, 2009].
  17. About Halla. Halla.com [November 27, 2009].

[edit] External Links