Hyundai’s U.S. Unit Names CEO, Focuses on Sales
Hyundai Motor America Inc., the South Korean auto importer that has been struggling with weak sales and management turnover, on Tuesday named Finbarr O’Neill as its president and chief executive.
O’Neill, 46, had been serving as the Fountain Valley company’s interim chief operating officer since Robert Parker abruptly resigned in February. A lawyer and former Toyota Motor Sales U.S.A. executive, O’Neill has been Hyundai Motor America’s general counsel since the company was formed in 1985.
His appointment ends the car maker’s long search for an American manager for its U.S. distributor, a move considered important to relations with domestic dealers. O’Neill will report to M.H. “Mark” Juhn, who was appointed chairman of Hyundai Motor America and Hyundai Auto Canada. Juhn had previously been president of both organizations since moving here from Seoul in January 1997.
Industry insiders said several executives from rival car companies had interviewed for the CEO post, but terms couldn’t be reached. O’Neill said his appointment now “moves the focus away from the issue of who will manage Hyundai Motor America” and will allow the company to focus on selling its products.
As sales of Hyundai cars have stalled, rumors have plagued the U.S. distributor that it was headed for the junk heap. Whether O’Neill’s appointment marks a turning point is unclear, but analysts said the company faces a difficult fight to win back the confidence of dealers and customers.
“The company has a real challenge on its hands in terms of turning itself around,” said consultant George Peterson, president of AutoPacific Inc. in Santa Ana.
Hyundai’s mid-1980s launch in the United States was one of most successful ever by a foreign car company. “It was a textbook example of how to do distributorship right in the U.S.,” Peterson said.
But Hyundai’s economy car, the Excel, became plagued with quality problems. The company’s sales deteriorated, and some dealers left. Last year, it sold less than half the number of cars it sold in the United States in its peak year, 1988, and sales through August of this year were off nearly 8% from the first eight months of 1997. In December and January, Hyundai Motor America cut 64 jobs, or about 11% of its total employment.
Ironically, today’s Hyundai cars are considered to be well-built, but models such as the Accent, Elantra and Sonata face an uphill battle winning market share away from Japanese and American car makers, Peterson said.
Hyundai plans to launch a minivan next year in the United States and a sport-utility vehicle in the spring of 2000, filling a gaping hole in its product line. Until then, analysts said, O’Neill’s job will be to bolster relations with dealers.
Though the Northern Ireland-born and New York-bred O’Neill is the first American to hold the title of chief executive at Hyundai Motor America, he follows a string of U.S. managers who have left the company. Since the company’s launch, it has had about half a dozen American executives in top posts. Industry insiders attribute their departures at least in part to Hyundai’s reputation for micromanaging its American operations.
O’Neill acknowledged that such a conflict existed with some former executives, but he said the issue is resolved. “I am confident that we will not be micromanaged.”
He said there are some positive signs indicating the company has turned the corner. It has no inventory overhang from the 1998 model year--a problem it ran into last year that hindered its ability to sell new models. Despite the current financial crisis in South Korea, O’Neill said he expects no delays in product deliveries. The devalued Korean currency also is allowing it to give price breaks on its cars in the United States, he said.
At its dealer meeting next month, Hyundai will introduce its new Sonata with additional safety features. Market tests of the SUV, which is being designed specifically for the North American market, have been favorable and that should boost optimism among the dealers, O’Neill said.
“We detect a growing level of dealer confidence,” he said. “But this is an opportunity to get them charged up about the franchise and the opportunity it represents.”
