Kicking Hyundai Into High Gear
Back in 1998, the wheels were coming off at Hyundai. Leno and Letterman regularly made the shoddy Korean car a punch line--to jokes about Yugo. The home office in Seoul couldn't even recruit a seasoned American to jump-start the faltering company. As a last resort, the Korean bosses turned to their corporate lawyer, Finbarr O'Neill, an affable Irishman with no experience running a car company. "We were a company looking over the precipice," says O'Neill. "I kept my law license intact as my insurance policy."
O'Neill won't have to hang his shingle any time soon. He has engineered an extraordinary turnaround at Hyundai, where sales have roared ahead 400 percent since he became CEO and now outpace Volkswagen and BMW. How did he turn around Hyundai? With guile and persistence learned from toiling in New York courtrooms and on Irish cow paths. O'Neill concocted some marketing magic four years ago--a 10-year, 100,000 mile warranty to inoculate Hyundai from its rep for miserable quality. Then he prodded the Koreans to focus on what Americans want: inexpensive, reliable, stylish cars. Hyundai is the most improved car line in J. D. Power's quality survey, and models like its $18,000 Santa Fe SUV and $16,000 Tiburon sports car are becoming the ride of choice for Gen Y.
Now the big wheels are taking notice. Chrysler, Mazda and others have followed Hyundai's lead and extended their warranties. GM execs are grumbling that Hyundai is succeeding because of the weak Korean won. Detroit had a similar gripe when the Japanese came on strong. Says O'Neill: "I would think GM has more to worry about.''
But O'Neill, 50, is about to give the auto establishment even more anxiety. Hyundai just broke ground on a $1 billion Alabama factory. And a new $25 million California studio is about to start crafting designs tailored to Americans' tastes. Those moves, says O'Neill, will allow Hyundai to sell 1 million cars by 2010, a nearly threefold jump from this year's sales of 375,000 cars. That would push it into the ranks of Toyota and Honda. Not bad for the accidental auto exec. If O'Neill can steer Hyundai from punch line to powerhouse, he'll be the fastest driver in the car business.
