Samsung vice chairman, Hyundai executive chairman meet again after 2 months

Posted on : 2020-07-22 16:55 KST Modified on : 2020-07-22 17:40 KST
Timing of meeting curiously close to ruling on Lee Jae yong’s indictment
Samsung Electronics Vice Chairman Lee Jae-yong and Hyundai Motor Group Executive Vice Chairman Chung Eui-sun
Samsung Electronics Vice Chairman Lee Jae-yong and Hyundai Motor Group Executive Vice Chairman Chung Eui-sun

Samsung Electronics Vice Chairman Lee Jae-yong and Hyundai Motor Group Executive Vice Chairman Chung Eui-sun met met again two months after their last meeting. According to accounts from Samsung and Hyundai Motor on July 21, Lee met with Chung during a visit earlier that day to the Hyundai Kia Namyang Technological Research Center in Hwaseong, Gyeonggi Province. Other executives participating from Samsung and Hyundai included Samsung Electronics Co-Vice Chairman Kim Ki-nam, Samsung SDI CEO Jun Young-hun, Hyundai-Kia President (product management) Seo Bo-shin, and Hyundai-Kia Vice President Park Dong-il. After trading opinions on topics including eco-friendly vehicles, urban air mobility (UAM), and robotics, Lee and Chung test-rode a hydrogen-powered bus and Nexo self-driving vehicle (Level 4).

2 meetings in 2 months may indicate sense of urgency ahead of indictment ruling

The encounter that day may be seen as a “return visit” following Chung’s visit in May to a Samsung SDI workplace in Cheonan, South Chungcheong Province. It was the second public meeting in two months between the heads of the first- and second-ranked conglomerates in South Korea. That in itself was not unprecedented, but no press releases with photographs from the meeting or messages from the chaebol heads were distributed. This stood in contrast with a previous meeting among Chung, LG Chairman Koo Kwang-mo, and SK Chairman Chey Tae-won, which was actively publicized afterwards by the individual groups with photographs and detailed accounts of the encounter.

Both Samsung and Hyundai Motor cautioned against reading too much into the meeting, stating that there had been nothing to publicize in connection with it. Hyundai Motor explained that it had “expressed to Samsung that we did not want to use [the meeting] for publicity.” Samsung said, “This is less about Hyundai Motor and Samsung collaborating in the near future and more about looking ahead as we move forward. [The group heads’ meeting] could also send the wrong signal and cause concerns for LG and SK, which are already involved in transactions with Hyundai Motor.”

Observers have also noted that the two encounters both came at crucial moments concerning possible trials and judicial action involving Lee. The May meeting happened a week after Lee delivered an apology to the South Korean public, in which he pledged to “boldly tackle new ventures.” Currently, an indictment from prosecutors is pending in connection with allegations including violations of the Capital Markets Act. Lee Chang-min, a business administration professor at Hanyang University, said, “It’s tough to see the timing of the two [meetings] as a coincidence.”

Amid the investigation into the allegations against him, Lee has recently shown a sharp increase in visits for management purposes. After an arrest warrant request against him was rejected on June 9, he paid successive visits to a Samsung Electronics semiconductor research center in Hwaseong (June 19) and the company’s lifestyle appliance project division in Suwon (June 23). On both occasions, he talked about “crisis,” the “future,” and “challenges.” A Supreme Prosecutors’ Office investigation review panel recommendation on June 26 calling for the indictment and investigation to be called off came three days after Lee’s visit to Suwon.

Bid to form a “resistance front” against Tesla?

Some observers are identifying the significance of the two encounters in commercial terms -- as the meetings involved the senior managers of Samsung (which produces batteries) and Hyundai Motor (which produces finished vehicles) at a time when the automobile ecosystem is undergoing major upheavals involving battery and finished vehicle companies in particular. In that sense, the fact that the July 21 meeting included Jun Young-hyun of Samsung SDI -- a battery-manufacturing affiliate of the Samsung Group -- and director Hwang Sung-woo of the Samsung Advanced Institute of Technology, which is developing next-generation battery technology, is attracting particular notice. If the two companies were to begin joint investment and cooperation on next-generation batteries in the intermediate to long term, it would be an “event” with the potential to send shock waves not only through the global battery market, but also through the finished electric vehicle market -- including companies like Tesla.

Chung has viewed the matter of creating a “resistance front” against Tesla as an urgent task after reports that the US electric car maker is planning the surprise unveiling of a battery with a million-mile (1.6 million-kilometer) lifespan at an upcoming “battery day” event at its Fremont factory on Sept. 15. If Tesla does succeed in producing batteries that are five times longer-lasting and substantially more affordable than current ones through its “Roadrunner” project for independent battery production, it would instantaneously leave not only finished vehicle makers Hyundai and Kia but also companies like Samsung SDI, LG Chem, and SK Innovation in a position of competitive disadvantage.

By Lee Jae-yeon, Song Chae Kyung-hwa, and Cho Kye-wan, staff reporters

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