[Opinion] Daewoo Success Story

“Help us become a better company. We will work harder.” The foreign CEO’s Korean pronunciation in the TV ad was difficult to understand. One had to listen closely to understand what he was trying to say. In October 2003, on the first anniversary of the birth of GM Daewoo, the company’s CEO, Nick Reilly, appeared in a TV ad and promised to make Daewoo Motors better. And he kept his promise.

Mr. Reilly has been promoted to the head of Asia-Pacific regional headquarters of GM, and starting July 1, he will be working in Shanghai. This is Reilly’s reward for transforming Daewoo from a company on the brink of bankruptcy to GM’s most profitable affiliate company in three years and eight months. Its sales volume increased 2.8 fold, from 411,573 in 2002 to 1,157,857 last year. The company also recorded profits for the first time in history. Also, the company reinstated 1,609 willing production employees from the Bupyeong factory, who were fired back in 2001. It is understandable why Automotive News, a U.S.-based automobile magazine, included GM Daewoo on its top 10 list of world stars in the automobile industry.

Reilly’s success resulted from his frank conversations with his employees about the company’s vision. He visited all the factories in Korea and held a conference explaining the current situation of the company, thirty times a year. He enjoyed soju with his employees and devised ways to create good relations between labor and management through soccer games, marathons, hiking trips, and other activities. He tried to adapt to Korea’s traditional culture; he has even held a traditional Korean ritual, which involves a pig’s head, to bring good luck. At a lecture last month, he said “If I had said, since you are the employees of a bankrupt company, you must follow GM’s way of doing things, then today’s GM Daewoo would not have been what it is today.”

President Roh Moo-hyun was also interested in Daewoo Motors. In May 2001, when he was an advisor for the Democratic Party, he visited the Bupyeong plant to persuade Daewoo to sell the company to foreign capital. He was hit by eggs thrown by the labor union members. He has also been a part of an ad as a Daewoo Motor supporter. The recovery of Daewoo Motors is probably closer to his heart. I wonder what President Roh thinks about Reilly’s leadership, who says “real strength comes from supporting and encouraging each other.”

Han Gi-heung, Editorial Writer, eligius@donga.com