When mentioning the name DAEWOO, what do you think of? Surely many people will associate it with the DAEWOO hotel located on Kim Ma street, Ba Dinh district, Hanoi, which is completely correct, there is nothing wrong with that. However, what I want to talk about here is the parent group of this hotel, the DAEWOO group of South Korea, which was once one of the giant Chaebols, a typical image representing the dragonization of the country. However, DAEWOO ended up in debt, chaos, and the regret of its founder Kim Woo-jung.

How did DAEWOO go from a hero to a villain?

DAEWOO translated into Vietnamese means "Great Universe," which reflects the ambition of South Koreans to reach out to the world, established on March 22, 1967. This group initially started as a textile company founded by Kim Woo-Jung with an initial capital of only 5,000 USD.

Kim Woo-jung is a South Korean businessman born on December 19, 1936, in the southern province of DAEWOO. His family was quite powerful as his father was the provincial governor. He graduated from Kyonggi High School and then obtained a bachelor's degree in economics from Yonsei University in Seoul. Although he came from a family of officials, Kim Woo-Jung was not a playboy; he was a diligent learner with a risk-taking personality, which later influenced his business philosophy.

In the late 1960s, he acquired a small textile company and named it DAEWOO. Just 30 years later, Kim Woo-Jung transformed it into the second-largest industrial group in South Korea, only after Hyundai, surpassing even LG and Samsung. Kim established a global network for the DAEWOO group, expanding into 589 business sectors and creating jobs for over 150,000 people worldwide. The company produced automobiles, ships, electronics, and had factories all over the world; the rise of DAEWOO was closely linked to the economic reform period of President Park Chung Hee's administration.

When talking about the economy of South Korea, one cannot ignore the Chaebols, the giant conglomerates that dominate and drive the entire country, and DAEWOO is one of those groups. Kim Woo-Jung took advantage of government incentives as leverage to promote the development of his company. He established an increasingly close relationship with the government, especially with President Park Chung Hee. However, DAEWOO could not rise to the global level without the somewhat reckless efforts of Kim Woo-Jung. His perspective aligned well with Park Chung Hee's policies, where South Korean workers had to continuously strive and sacrifice the present for a brighter future. In the 1960s and 1970s, while the average working hours of workers in the West were 8 hours, in South Korea, it was 12 to 16 hours a day.

In a dialogue with students in Seoul broadcast live, Mr. Kim asserted that his workers had only two Sundays off a month. He also believed that the rise of any world power required the sacrifice of several generations; if the South Korean people wanted to enjoy prosperity, they had to endure hardship. With that mindset, DAEWOO always strived to achieve the impossible. When talking to President Park Chung Hee, Mr. Kim always believed that South Korea should focus on creating export products, and indeed he applied this to his group.

In the 1970s, DAEWOO was a pioneer in penetrating foreign markets. There were times when Kim Woo-Jung persistently persuaded American retailers to buy textile products made in South Korea by DAEWOO. At that time, the U.S. only granted South Korea a very small quota, yet DAEWOO captured up to one-third of South Korea's products exported to the United States. With funds from textiles, this tycoon quickly expanded into other fields. By 1976, Kim had control over 11 companies in textiles, finance, machinery, and cosmetics. DAEWOO quickly became a miniature representation of the rising South Korean economy, becoming an Asian tiger.

In Vietnam, there was a time when the trend of South Korean cars emerged, represented by the MATIS, a compact car that created a sensation when cars were still a luxury in our country, and it was a product of the DAEWOO Group. Kim Woo-Jung's tentacles reached out to foreign countries in various fields; financial resources were not an issue for Kim, and with close relationships with the government, DAEWOO was also provided with privileged loans from state banks. By the 1980s, South Korea was recognized as the tiger of Asia, and DAEWOO had spread across many sectors, including textiles, construction, electronics, automobiles, shipbuilding, and petrochemicals, with DAEWOO being a chaebol with significant contributions.

In 1989, Mr. Kim published a book aimed at inspiring the bright dreams of a new generation of South Koreans titled “The Wide World and Many Things to Do,” which brought Kim Woo-Jung closer to the world. At its peak, DAEWOO had 320,000 employees working in 110 different countries and produced a wide range of products, including aerospace equipment and French-style wine. If today people think of South Korea, they think of Samsung; 30 years ago, it was DAEWOO, the "Great Universe," the dream of Kim Woo-Jung that had become a reality.

Explaining the rapid growth of DAEWOO, Kim Woo-Jung stated, “We worked harder than any other company; instead of working from 9:00 AM to 5:00 PM, we worked from 5:00 AM to 9:00 PM. If you work hard, achieving success is not surprising.”

In 1997 and 1998, all of Asia fell into a severe economic crisis that originated in Thailand and spread to Southeast Asian countries, including South Korea, Indonesia, and Thailand. South Korea was one of the countries most severely affected, with economic decline and reduced purchasing power causing the Chaebols to struggle. The South Korean government ordered large corporations to downsize and reduce production to minimize losses. While Samsung and LG were cutting back, DAEWOO borrowed an additional 40%.

In 1998, the DAEWOO group, which was then losing money, added 14 new subsidiaries to its existing list of 275 subsidiaries. Chairman Kim Woo-Jung still believed in the internal strength of the group and confidently borrowed money to the extent that the South Korean government had to order banks to stop extending credit and force companies to have restructuring plans before considering anything else. Undeterred, Kim sought other ways to raise capital; DAEWOO issued corporate bonds and raised as much as 20 billion USD. With this money, he continued to expand branches and maintained a diversified business. However, due to increasing business losses and pressure from within, Kim had to sell some assets, including the shipbuilding company he had devoted himself to developing, but the price was too high for anyone to be interested, so they had to lower the price to sell as quickly as possible. DAEWOO's electronics division had to be sold to Samsung, and at this point, the group mainly focused on textiles and automobile production.

In 1999, the South Korean economy was still struggling in the crisis, and DAEWOO announced that the group would go bankrupt if its Korean creditors did not support their plan, meaning that DAEWOO would not even be able to repay the interest of 500 million USD per month, let alone the principal. The South Korean government immediately intervened and froze DAEWOO's loans until November 1999. This was considered a major shock for South Korea, as no one thought that a company regarded as a Chaebol could collapse, even foreign creditors of DAEWOO were in turmoil because they could not collect their debts.

Faced with the risk of being taken to court and imprisoned, Kim Woo-Jung, once a hero of the South Korean people, had to flee abroad, leaving DAEWOO with a massive debt of up to 75 million USD. After Kim's disappearance, the South Korean government rushed to restructure DAEWOO, which was eventually split into three separate companies, each operating in a specific field:

• DAEWOO Corporation focused solely on manufacturing electronic products.
• DAEWOO Engineering and Construction specialized in shipbuilding.
• DAEWOO International Corporation focused on financial services.

In 2022, the automotive division of DAEWOO was partially acquired by the American group General Motors. In 2005, Kim Woo-Jung returned to his homeland and was ready to face trial. The South Korean court sentenced Kim Woo-Jung and six other leaders to 10 years in prison with a total fine of up to 22 billion USD, with Kim Woo-Jung receiving an 8.5-year sentence. However, after serving more than a year, the South Korean government granted him amnesty, and he lived a quiet life until he passed away in 2019 at the age of 83.

The life of Kim Woo-Jung is a controversy over "Merit and Guilt." DAEWOO also left a profound lesson not only for the South Korean people but for the whole world. That is the unsustainability based on excessive borrowing, arrogance, and reckless risk-taking, which not only failed to solve problems but also caused the business to sink deeper into an inescapable crisis. Nevertheless, future generations still recognize Kim Woo-Jung's significant contributions to the country; his foundation for international expansion policies has helped many large corporations in the country, such as Samsung, LG, and Hyundai, achieve their current status.