Former General Motors Chief Marketing Officer Joel Ewanick resurfaces as president and managing partner of Global Auto Systems, a self-described “consulting, research and information (provider) to the global auto industry” with offices in Detroit, Seoul and Irvine, CA.
Ewanick, who was dismissed from GM nine months ago for allegedly misrepresenting the cost of a marketing contract with a high-profile European soccer team, participated Tuesday in a Web conference focused on doing business in South Korea and hosted by law firm Dykema Gossett.
No mention was made of Ewanick’s supposed supervisory role at beleaguered electric-vehicle startup Fisker.
Drawing on his past experience with Hyundai, Ewanick spoke at length on the pros and cons of setting up operations in Korea, mostly focusing on the “pro” aspects.
“At the end of the day, doing business in South Korea is smart,” the newly minted consultant says.
Ewanick also offers effusive praise for Hyundai, where he worked prior to landing at GM. “It’s one of the best-run companies I’ve ever seen, the most disciplined (and) really well-organized.”
The former GM and Hyundai marketer downplays ongoing tension between North and South Korea, saying that shouldn’t impact decisions by Western businesses that are considering locating operations in South Korea.
“I personally see this as a continuation of the saber-rattling we’ve seen…I think it’s more of a power struggle going on in the North that we see now.”
After a recent visit with his son to South Korea’s demilitarized zone ahead of April’s Shanghai auto show, Ewanick says he concluded North and South Korea will be one country again “in his (son’s) lifetime.
“(North Korea) is too impoverished” to continue much longer in its current state, he says.
Ewanick and others participating in the webcast shed light on the cultural nuances in South Korea that they say companies looking to do business there need to understand.
“It’s customary for an employee to not drive a nicer car than their boss,” Ewanick says, mentioning the chauffeur phenomenon in South Korea that ensures top-ranking executives are driven around in high-end luxury cars with roomy, luxurious backseats, such as Hyundai’s Equus.
Ewanick also advises Western firms to hire a local lawyer, from the right school, to bring along to the negotiating table.
“Where (a lawyer) went to school matters a great deal to Koreans,” he says.
Also important, Ewanick says, is ensuring talks between Western and Korean firms are conducted by two individuals of equal corporate standing, as hierarchy is a key focus of Korean business life.
Hoon Noh, senior counsel and assistant leader-Dykema Gossett’s Korea Team, says Western firms that don’t do their homework on these societal nuances often run into trouble, because their potential Korean partners believe “they’re not respectful of our culture.”
Noh says the year-old free-trade agreement between Korea and the U.S., initially denounced by some U.S. manufacturers, provides a great opportunity.
“A lot of companies turned around (their thinking) – Ford, for example, is very aggressive,” he says, citing the Michigan-based auto maker’s decision to offer most of its U.S. model lineup for sale in South Korea.
“They’ve probably realized so far since the FTA a 20% increase in sales,” Noh says of Ford’s volume in South Korea.
However, Ewanick believes Korean consumers will remain loyal to domestic auto makers for the foreseeable future, except when it comes to luxury vehicles.
“I think the luxury brands have had great penetration (into the traditionally closed Korean market), because there isn’t that differentiation beyond an Equus from Hyundai/Kia.”
Hyundai and Kia each market their highest-end models under their mass-market brands, not separate luxury marques.
