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Lee Kun-hee of Samsung dies at 78; constructed an electronics titan

Updated: October 25, 2020 8:28:55 am

In this April 22, 2008, file photograph, Samsung Group Chairman Lee Kun-hee, proper, arrives to carry a information convention on the Samsung Group headquarters in Seoul, South Korea.

Written by Raymond Zhong

Lee Kun-hee, who constructed Samsung into a world large of smartphones, televisions and pc chips however was twice convicted — and, in a sample that has change into typical in South Korea, twice pardoned — for white-collar crimes dedicated alongside the way in which, died Sunday in Seoul, the South Korean capital. He was 78.

Samsung introduced the demise however didn’t specify the trigger. Lee had been incapacitated since a coronary heart assault in 2014.

When Lee took the helm at Samsung Group in 1987, after the demise of his father and the conglomerate’s founder, Lee Byung-chul, many within the West knew the group’s electronics unit solely as a maker of low cost televisions and unreliable microwave ovens bought in low cost shops.

Lee Kun-hee pushed the corporate relentlessly up the technological ladder. By the early 1990s, Samsung had surpassed Japanese and American rivals to change into a pacesetter in reminiscence chips. It got here to dominate flat-panel shows as screens misplaced their bulk. And it conquered the middle-to-high finish of the cell market as cellphones grew to become powerhouse computing units within the 2000s.

Samsung Electronics at present is a cornerstone of South Korea’s financial system and one of many world’s prime company spenders on analysis and improvement. Lee — who was chairman of Samsung Group from 1987 to 1998, chairman and chief govt of Samsung Electronics from 1998 to 2008, then Samsung Electronics chairman from 2010 till his demise — was South Korea’s richest man.

He and his members of the family used an internet of possession preparations to exert affect over the opposite firms below the Samsung umbrella. Over the course of his tenure, whilst skilled managers got here to have extra accountability on the group, Lee remained Samsung’s large thinker, the supplier of grand strategic route.

But his reign additionally showcased the generally doubtful methods through which South Korea’s household enterprise empires, often called chaebol, safeguard their affect. South Korea’s company dynasties are such a serious supply of financial vitality that some South Koreans ponder whether the chaebol are holding their nation hostage.

In 1996, Lee was convicted of bribing the nation’s president, then pardoned. More than a decade later, he was discovered responsible of tax evasion however given one other reprieve, this time so he may resume lobbying to deliver the Winter Olympics to the mountain city of Pyeongchang in 2018.

Soon after the Pyeongchang Games, Lee Myung-bak, South Korea’s president from 2008 to 2013 and no relation, was sentenced to 15 years in jail for accepting $5.four million in bribes from Samsung in trade for pardoning Lee.

Lee Kun-hee was born in Daegu, in Japanese-occupied Korea, on Jan. 9, 1942, to Park Doo-eul and Lee Byung-chul, who had based Samsung a couple of years earlier as an exporter of fruit and dried fish. The youthful Lee was a wrestler in highschool.

Samsung first grew by dominating the patron staples, like sugar and textiles, that war-torn Korea wanted. It later expanded into insurance coverage, shipbuilding, building, semiconductors and extra. Lee Kun-hee graduated from Waseda University in Tokyo in 1965. He then studied in a grasp’s program at George Washington University however didn’t obtain a level.

He began his profession at Tongyang Broadcasting Co., a Samsung affiliate on the time, in 1966. He labored at Samsung C&T, the conglomerate’s building and buying and selling agency, earlier than being named vice chairman of Samsung Group in 1979.

When he grew to become chairman in 1987, he took from his father a fixation on planning for the far future, even when occasions appeared good. But he added an overlay of existential worry and ever-present disaster that persists amongst Samsung brass to today.

“We are in a very important transition,” Lee mentioned shortly after taking cost, in an interview with Forbes. “If we don’t move into more capital- and technology-intensive industries, our very survival may be at stake.”

The radicalness of the transition he had thoughts was made clear when he summoned scores of Samsung Electronics managers to a luxurious lodge in Frankfurt, Germany, in 1993. For days, he lectured the executives, urging them to bury outdated methods of working and pondering. “Change everything,” he mentioned, “except your wife and children.”

Samsung, he decreed, would concentrate on bettering product high quality as an alternative of accelerating market share. It would herald expertise from abroad, and it will require that senior executives intimately perceive international markets and how one can compete in them.

At the time, all of this was anathema in company South Korea.

“It was very much like Mao Zedong trying to change the mindset of the Chinese people,” mentioned Chang Sea-jin, a professor on the National University of Singapore.

In 1995, as a part of the emphasis on high quality, he visited a Samsung plant within the city of Gumi after a batch of cellphones was discovered to be faulty.

What occurred subsequent grew to become legend. According to “Samsung Electronics and the Struggle for Leadership of the Electronics Industry,” a 2010 e book on the corporate by Tony Michell, the Gumi manufacturing facility’s 2,000 staff gathered in a courtyard and have been made to put on headbands labeled “Quality First.” Lee and his board of administrators sat below a banner that learn “Quality Is My Pride.”

Together they watched as $50 million price of telephones, fax machines and different stock was smashed to bits and set ablaze. The staff wept.

Lee’s enterprise report was not unblemished. Believing that electronics would change into integral to vehicles, he began an vehicle unit within the mid-1990s. Samsung Motors was bought off in 2000.

A dalliance with Hollywood was equally brief lived. In 1995, Steven Spielberg sounded Lee out over dinner about investing in a film studio. Despite being a film buff, the chairman and different Samsung executives ended up speaking largely about microchips.

“I thought to myself, ‘How are they going to know anything about the film business when they’re so obsessed with semiconductors?’” Spielberg later recalled. “It was another one of those evenings that turned out to be a complete waste of time.”

Samsung entered a part of worldwide conquest within the 2000s, utilizing flashy units and glossy advertising and marketing to implant its identify firmly into the minds of Western customers. Lee, nonetheless, was not often seen in public. He was a loyal collector of sports activities vehicles and positive artwork.

By 2007, he had recognized the following looming disaster for Samsung. China was ascendant in low-end manufacturing, whereas Japan and the West nonetheless led in superior applied sciences. South Korean firms — Samsung included — have been sandwiched in between.

But as he obtained began on his subsequent overhaul of the Samsung method, accusations surfaced that he had dodged taxes on billions of {dollars} supposedly stashed in secret accounts. Instead of preventing the fees, he shocked South Korea by saying his resignation on reside tv.

“I promised 20 years ago that the day when Samsung was recognized as a first-class business, the glory and fruition would all be yours,” he mentioned in 2008, addressing staff, his voice a close to whisper. “I truly apologize for not having been able to keep that promise.”

He was pardoned the next 12 months and was made Samsung’s chairman once more in 2010.

After a coronary heart assault in 2014, his son and vice chairman of Samsung Electronics, Lee Jae-yong, grew to become the corporate’s de facto public face.

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