O.C. Man Joins Kia’s Board of Directors : Management: The Korean auto maker’s elevation of U.S. operations chief W. Greg Warner is a first in the Asian car industry. Japanese firms likely won’t follow suit, analysts say.
In a show of faith in its fledgling North American operation, Korean car maker Kia Motors Corp. today will appoint its U.S. operations chief to its board of directors.
W. Greg Warner, 51, becomes the first American executive of an Asian car company to sit on the corporate board, although Ford, Chrysler and General Motors all have executives who are directors of Japanese auto companies in which the big U.S. car makers have invested.
But Kia--Korea’s No. 2 car maker--is the first of the 10 Asian auto companies with U.S. import and distribution units to reach into those subsidiaries’ operational ranks for new blood.
Elevating its U.S. subsidiary’s top American executives to the board is a good move for Kia, analysts said, but is unlikely to set off a round of similar appointments by companies like Toyota, Honda and Nissan.
“It might make some sense for all of them to do something like that, but I just can’t see it starting a trend,” said Chris Cedargren, an industry analyst with Santa Ana-based Auto-Pacific Group.
One of the reasons, Cedargren and other international specialists said, is that Japanese companies in particular have their own traditions for doing business.
Jack G. Lewis, a management professor and director of the USC International Business Education and Research Program, called Warner’s appointment “symbolically tremendous. Kia is respected in Korea for its efforts to manage its international operations well.” But he said he reserves judgment on the effect that a single appointment will have on Kia specifically and the Asian auto industry overall.
“I cannot imagine a large Japanese auto firm looking to a small young entry from Korea as a model,” he said. “Boards in Japan typically don’t have outside members.”
Many of the large Japanese car companies’ U.S. subsidiaries also have their own boards of directors. Toyota Motor Corp.’s Torrance-based Toyota Motor Sales USA Inc., for example, has a 10-member board. A spokeswoman for the company said that group includes nine Japanese executives and one American, Toyota Motor Sales Executive Vice President Yale Giesel.
Of the eight Japanese car companies in the United States, five have appointed the presidents of their U.S. import and distribution subsidiaries to their boards--but all five of those executives are Japanese nationals.
Tai K. Oh, a Cal State Fullerton management professor specializing in Asian corporate behavior and personnel management practices, said it is not surprising that it was a Korean company that made the first move to bring one of its American executives into the top policy ranks.
“It is characteristic of Korean business,” Oh said, “to need to stand out. . . . Japanese companies are subtle and like to accumulate strength without making a big splash, but Koreans tend to make a big splash first.”
Japanese companies are also more cautious than Korean businesses about bringing people into their inner circles, he said. “Japanese companies take a long, long time to make such an appointment. They want to have made a long examination and holistic evaluation of the person.”
Warner’s three years with Kia make him an infant by Japanese corporate standards, Oh said.
Warner, a Southern California native and 22-year resident of Huntington Harbor, said he speaks only a few words of Korean but has had little trouble communicating with Korean executives, most of whom speak at least some English. And he makes it a rule, he said, “always to use translators, just to make sure.”
Warner is a single parent who meshes his business schedule with the task of raising a 15-year-old daughter and a 12-year-old son. One of his passions is golf, and that has helped him to bond with executives in Seoul, where the sport is immensely popular.
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Warner said the director’s job will require him to travel to Korea four or five times a year for meetings. Scheduling conflicts with events in Kia’s North American market will keep him from attending every board session, he said.
In addition to adding a Southern California perspective to board deliberations, Warner said, he has been told that he will be involved in the company’s long-range strategic planning and worldwide product planning.
Those efforts are directed by the Kia senior management group, which makes up a sizable portion of the company’s board. Warner becomes the 55th director and third non-Korean on the board, whose membership includes one executive from Japanese car maker Mazda Motors Corp. and one from Ford Motor Co. in Detroit. The two companies own small stakes in Kia.
Warner, who was told of the appointment several weeks ago, said in an interview that it was initiated by Kia officials in Korea, and that he had not been lobbying for the position. “It came as a pleasant surprise,” he said.
As chief operating officer of Kia Motors America Inc., Warner is the top-ranking American executive of the Irvine-based Korean car importer. The company’s president, Hong Rae Park, also serves on the Seoul-based parent corporation’s board.
Warner previously held several positions at Hyundai Motor America, the Fountain Valley import arm of Korea’s largest car maker. He was chief of operations there in late 1989 when management at Hyundai Motor Corp. in Seoul swept out all of the subsidiary’s top American executives after sales fell sharply from the record-setting pace the company established in 1986 and 1987. Analysts have blamed the late ‘80s sales slump on quality problems with Hyundai cars of that era, along with heightened competition from Japanese and American car companies in the low-priced niche that Hyundai had dominated since its U.S. introduction in 1986.
Though Warner has not been openly critical of his experiences with Hyundai, he and others have blamed that company’s early troubles on the Korean parent’s reluctance to take marketing and product design advice from non-Korean officers in its U.S. operation.
At Hyundai Motor America in Fountain Valley, President Dai Ok Chung is also a member of the board of directors of Hyundai Motor Corp. in Seoul, but chief operating officer N. Doug Mazza--Warner’s counterpart--is not.
Warner, who worked as an independent consultant for more than a year before signing on with Kia, said in an interview then that he discussed the need for close communication between U.S. and Korean officials at great length before accepting the job.
A veteran of the auto industry in the United States, Warner began as a marketing analyst with Ford Motor Co. in 1968 after graduating from UCLA and obtaining a graduate business administration degree at USC. He worked in several executive posts at Toyota Motor Sales from 1971 until joining Hyundai in 1985.
He said he sees his appointment to Kia’s board “as a positive example of how Kia has committed itself to becoming a truly global business.”
Since it launched U.S. sales in February, Kia has opened 85 dealerships and sold nearly 8,000 cars. The company so far markets only one model, the four-door Sephia sedan, in the United States. In December it will introduce a compact sports utility vehicle, the Sportage.
Kia officials said Warner’s appointment to the corporate board was in part a reward for his intensive 18-month effort to create an entire U.S. operation from scratch.
