Chairman’s Woes Not Likely to Impact Kia in U.S.

SCOTTSDALE, AZ – Kia Motors America Inc. is not likely to be greatly impacted by the possible incarceration of its embattled top executive, Chung Mong-Koo, executives for the U.S. subsidiary tell Ward’s.

Chung, who is chairman of Hyundai Motor Group, which includes Kia Motor Corp., has been charged with embezzlement and breach of trust for creating a $138 million slush fund to pay off government officials in return for political favors. He was jailed for two months in 2006, currently is free on bail after posting a $1 million bond and is due back in court on Feb. 5.

A strong CEO whose uncompromising drive for quality has guided both Hyundai and Kia to respectable new levels, Chung also is the undisputed guiding light of the Hyundai Group.

Asked what effect Chung’s return to jail would have on KMA, Lee Bong-gou, a 26-year Hyundai veteran who took over a month ago as KMA president and CEO, replies: “Not that much, except in the case of new products and the need to review plans with him.”

Len Hunt, KMA executive vice president and chief operating officer, says, “We sincerely hope he (Chung) stays at the helm. We have our new headquarters and design center (in Irvine, CA) and they’re continuing to prepare the site for our new assembly plant in West Point (GA).”

During a recent visit to West Point, Ward’s confirmed the site is indeed a beehive of activity. The $1 billion plant, capable of building up to 300,000 vehicles annually, is expected to begin production by late 2008.

Chung’s son, 38-year-old Kia Motor President Chung Eui-sun, “visited us just before Christmas and we went over our plans,” Hunt says. “He knows America. He has invited 300 of our (680) dealers for meetings in Seoul over time.”

Hunt says KMA’s only concern about Chung Mong-koo’s fate is a potential impact on future projects because of his longstanding hands-on guidance of both Hyundai and Kia.

Clearly, however, KMA is convinced it has achieved a firm toehold in North America and is positioned for future growth regardless of the outcome.

Lee and Hunt were here for the press introduction of the new Kia Rondo compact crossover vehicle, which KMA has targeted for more than 20,000 sales this year.