Reckoning

by David Halberstam

  What had once been a trickle of them had become by the spring of 1986 a torrent. In Seoul they met their new partners, men with whom they could not communicate at all. William Vaughan, a Chrysler representative in Korea, had watched them come and witnessed their desperation, knowing they were there to survive, for if they could not work something out, they were convinced, they would soon be out of business. Vaughan had an unusual job; he represented Chrysler in its continuing negotiations to complete the massive deal with Samsung, the vast South Korean manufacturing combine, but in addition to that he was a kind of matchmaker between the American parts manufacturers used by Chrysler and the Koreans, trying to find Korean companies who could succeed in this alien new world of autos. It was not always easy, for few of the Korean companies, their eagerness and ambition and low labor costs notwithstanding, had tried anything on the scale of, or as demanding in specifications as, auto manufacturing. More often than not the owners ran the most primitive of operations, sometimes literally dirt-floor. They typically had been manufacturing fairly simple consumer products which were put to intermittent use in the home. The jump to the world of auto, where what they made would undergo constant stress, was enormous. Chrysler, like the other American assemblers, was now in the business of arranging the marriages, and Vaughan, a longtime overseas operative for Chrysler, hearing of one of its American suppliers who wanted to make a deal, would put together a list of potential Korean companies. Then a team of four or five Chrysler technical experts would fly out to evaluate the factories, eventually recommending the one most likely to succeed in auto parts—a decision made not so much on achievement as on potential, on the Korean manager’s instinct for organization. Then the American supplier would fly out to meet his intended, and with that, like as not, the deed would be done.

  To the suppliers, pressured, nervous, Korea increasingly seemed the most attractive option remaining. Japan was too exclusionary, too hard to penetrate; too much was demanded and too little given. In Mexico, a country that generated a certain unease on their part, potential partners wanted a sixty-forty division of the relationship. Taiwan and Singapore seemed too small for the scale of auto, better suited to high technology. Korea, by contrast, was relatively open, eager for foreign investment, and somewhat experienced in big-time industrial production. It was a country, in effect, with muscle. Those unaware of that were directed to the example of Hyundai, which had entered the world of auto export only recently but was already good and improving at a remarkable rate.

  Hyundai was not just the largest of Korea’s new conglomerates but a nation within a nation. It was a classic East Asian hybrid—a family-owned capitalist giant but state-supported and state-buttressed, more a creature of the state in some ways than even its Japanese competitors. The advantages of its special position were remarkable: It was the state that decided which Korean firms could compete with Hyundai, and the state had an immense financial and emotional investment in Hyundai, the epitome of Korea’s industrial surge and an object of national pride. In an American conglomerate, one Korean businessman noted, if the shipbuilding or construction division was depressed, the company might be forced to sell it off; but during bad times Hyundai needed only go to a Korean bank for more money—in effect a national subsidy for a private company. Yet even discounting its advantages, Hyundai was impressive. It had mastered the process of taking Korea’s great human potential—all that raw energy and desire for a better life, so long suppressed—and giving it modern economic form and expression, moving workers not just from farm to city but from the old century to the new, changing their lives dramatically. Its accomplishments were staggering: its enormous construction projects in the Arab world, its ability to compete with the Japanese head-to-head in shipbuilding. Now Hyundai had entered auto. In 1984, with a small rear-wheel-drive car called the Pony, it penetrated the Canadian market; by the end of 1985 it had become the number-one exporter of cars to Canada, with seventy-nine thousand cars sold. In 1986, with a small front-wheel-drive car called the Excel, it moved into the American market, and the early sales were well above expectations. Hyundai had talked of selling 100,000 subcompact cars in the United States in 1986, but by midyear it had to revise the forecast to 150,000.

  It was not until 1985 and 1986 that numbers of Americans began to sense that Korea was becoming the new Japan, another thrusting Confucian nation where traditional values and hierarchies had been deftly transferred into a modern, highly disciplined industrial workplace, another challenger with superior workmanship and seemingly unbeatable labor costs. Even as Japanese wages were at last beginning to parallel those of American workers, Korean salaries remained ominously low, approximately $3 an hour in the heavy industrial sector. Informed people in the American auto industry, watching Hyundai’s early success, were struck by how much faster it was happening than Japan’s had. Remembering, for example, that when the first Japanese cars had arrived in America they were poorly designed and of doubtful quality, auto insiders were struck by the good looks of the Korean cars—Hyundai had hired Italians to design them—and by how well they were made. They were struck too by the fact that whereas the Japanese, when they arrived, had spent almost no money on advertising, Hyundai was budgeting some $25 million for 1986 and, to spend it, had retained Backer & Spielvogel, the creative American advertising agency that did the inspired campaign for Miller Lite beer.

  For South Korea the explosion into the modern era was accompanied by considerable stress. Seoul, the capital, had swollen to a city of ten million as hundreds of thousands of Koreans left the farm annually. Countless high-rises formed a new skyline over a city that as late as the early seventies had been something of a wasteland. Now Seoul was preparing to host the 1988 Olympics, believing that just as the Olympics had represented a coming-out party for the Japanese twenty-four years earlier, allowing them to step confidently into a new world position, so would the Olympics confirm Korea.

  Yet amid all the change and excitement there were constant reminders that this remained a poor country, trying to go even farther than Japan in a shorter time, and that the burden of achieving industrial eminence would fall directly and unmercifully on today’s workers. “The workers understand that it is the duty of this generation to sacrifice for the good of the country,” said Chung Se Yung, the president of the Hyundai Motors Company and the younger brother of the founder of the Hyundai complex. “If we are lucky, because of their sacrifices, in fifteen years the workers will make $10,000 a year, they will own their cars, and their children will have it easier than they did. Already our lives are getting a little better. In the old days we worked both Saturday and Sunday. Now we have Sunday off. That is the first sign of progress.”

  The sacrifice notwithstanding, there was now a powerful optimism in South Korea. The country had suffered painfully in this century, first under the Japanese and then in a bitter and costly civil war, which not only bled the whole peninsula but provided what to some seemed additional justification for South Korea’s autocratic rule. (Some Americans saw an irony in the Korean economic challenge: Having fought to keep Korea from being overrun by the Communists in the 1950s, the United States subsequently supported an oppressive government in Korea, one so strong that it could exclude unions and impose a wage scale so low that it was almost impossible for America to compete with.) Now, thanks to the new economic success, the lives of ordinary Koreans were improving, the first early fruits of their hard work were being tasted, and there was an absolute conviction throughout the land that more would follow, that all it took for a better life was hard work. As Michio Nagai, the former Japanese minister of education, observed, there were few national forces more powerful than the belief that things could get a great deal better within the span of one’s lifetime.

  The surge of Korea left the Japanese somewhat ambivalent. Part of it was the traditional antipathy of the Japanese for the Koreans, a people they regarded as primitive and uncultured, garlic eaters. The relationship between the two countries,
one American noted, was not love/hate but hate/hate. Having colonized and exploited the Koreans for the thirty-five years ending in 1945, and quite brutally at that, the Japanese well understood that the Koreans would now rival them with special passion. Key to the cultural-social contempt for the Koreans as a lesser people, a belief not unlike that which many Americans had about Mexicans, was the conviction that they could not do anything really sophisticated. There was also a more empirical view among many Japanese, that Korea simply lacked the scope to become a true competitor. But for all that there was a growing Japanese nervousness about the Koreans—that they were so ambitious, that they would now work harder than young Japanese, that their wages were so low. If the combination of Japanese government and business had been able to control Japanese labor so that what passed for labor-management harmony was really a steel fist in a velvet glove, then the authoritarian Korean government dominated its workers even more nakedly; in Korea, the steel fist wore no glove. As a matter of policy the Korean regime used force to compensate for the nation’s lack of industrial and technological sophistication. Also, though Japan was a disciplined society, it seemed hedonistic and insubordinate compared to Korea, where leisure and domestic consumption and dissent were severely restricted.

  At every step the Japanese could see their own challenge to the Americans reflected back at them. Furthermore, although the learning curve for the Japanese, as they worked off the American example, had been brief, the Koreans, using the Japanese example and the devices of modern technology, were shortening the curve even more dramatically. They had moved into shipping and steel much faster than the Japanese had thought they could, and now, much earlier than expected, were readying themselves for an assault on the market for autos. In Japan, these developments provoked a mixture of fear and respect. Some older Japanese did not merely complain about the work habits of the younger Japanese; they began to contrast their own young people unfavorably with Korea’s. “The Koreans’ IQs are on the rise, while Japanese IQs are slipping slightly,” said Michio Nagai. “Their family units are stronger than ours. The children study hard and listen to their parents. The Koreans are very confident of their future. Five or ten years ago they did not have that confidence. They are very impressive.”

  Impressive was an understatement. For Stewart Kim, a young American of Korean ancestry who had attended the best American schools and who was in Korea for graduate studies, the way Korean students used their college libraries was awesome. American students had worked hard, he thought, but their habits were nothing like those of the Koreans. The libraries normally opened at six in the morning, but during exam time they opened at four; at four, there were always long lines of students waiting to get in, and by five there were often no seats left.

  Along with the respect among the Japanese there was a tendency toward what could be described as Korea-bashing. Korean companies applying to make things off outmoded Japanese patents found that the Japanese companies they wrote to neither approved nor denied the requests. In 1983, when Exxon of Japan asked for bids on the construction of an immense drilling rig, Hyundai, the giant Korean conglomerate, competing against a number of Japanese companies, made the low bid and won the contract. The reaction in the Japanese press was extremely ugly; there followed several weeks of articles about the danger of the Korean threat and how terrible the Koreans were in general. Finally the Korean ambassador in Tokyo went to the foreign ministry and said that he thought the vituperation was getting out of hand. The bid, however, was eventually rescinded, and it was announced that the Koreans could not meet the specifications. No one was fooled. No other company in the world had done as many massive seawater projects as Hyundai.

  In the spring of 1983, Robert Cole, a Japanologist from the University of Michigan, an expert on Japanese labor, met with some of his friends in the Japanese labor movement. Times were very hard, a man from the steel union told him; steel was operating at only 60 percent of capacity. “I am afraid we’re going to have to cut back and let people go,” the union man said. The problem, he explained, was the Koreans. They were right on the heels of the Japanese. “I keep telling the Koreans that they’ve got to get their wages up,” he said, “because what they’re doing now is destructive to everyone.” The shoe, Cole thought, was finally on the other foot.

  The shifts are very long—twelve hours a day, ten of which are intense, concentrated labor—and Park Jin Kean works six days a week. His life is about his job and little else. Every evening he goes home exhausted. He has to force himself to talk with his family at dinner and, afterward, to pay attention to his two young children and not to slip off into sleep. Park is a foreman at Hyundai Motors, in Ulsan, South Korea, in charge of stations 139 through 164 on the final assembly line, where, among other things, the engine is placed into the body frame. He is proud of his job, and he is also proud of his salary, which, though small by American industrial standards, is exceptionally large by Korean standards. In a nation just emerging from centuries of rural poverty, where the average wage has finally reached $2000 a year, Park makes about $9600. He accepts the long hours without complaint. There is no union to represent him, and he accepts that readily too. It does not occur to him that he is not greatly favored by fate. The work is hard, but the alternatives to his life are much harder.

  Park grew up on a farm. His father, Park Kyung Won, though a farmer, was an educated man who taught Chinese characters to neighbors as a sideline. In his youth Park’s father had been conscripted into the Japanese army and forced to fight under the Japanese flag. He worked his tiny plot of rice land with great skill, but the plot was one of the smallest in an area where most of the farms were too small. Even when things went well there was little surplus at the end of the year, and when things went badly, the family suffered. When Park was eight there was a terrible harvest because of heavy rains, and because the Park farm was already so poor, the hard times that resulted for the family lasted for three years. During that time the Parks were even poorer than usual, and they were forced to eat barley instead of rice. His father always talked with pride of his life as a farmer, but for young Park it was harsh and wearing, each day the same as the one before, the hours endless. Park’s father sometimes beat him for his mistakes, and Park later came to believe that the real cause of those beatings was the hard life inflicted on his father.

  As a boy Park liked to make things; when he was seven he made a bicycle out of wood, with wooden wheels, and it worked rather well, he remembered, as long as he was going downhill. Long before finishing high school, he began to think of leaving the farm. He decided that there had to be a better and more exciting life. He knew Korea was changing, that there were industrial jobs for bright young men like him with a high-school education. His father was outraged when Park told him of his intention. Park was the oldest son, he said, and had responsibilities. Unspoken was the assumption that a father had a time-honored right to determine a son’s life, and Park must respect that. But it was more than those things. The son’s desire represented the decline of the Korea the father knew and valued, an agricultural land of traditional values, and the rise of a Korea he neither liked nor understood, an urbanized, industrialized nation of confusing modern ways and diminished respect for the past and for one’s elders. The younger Park and a friend at work, Yoo Mai Bok, also a foreman, often talked about the pain their decisions to leave the farm had caused their fathers. “And what will happen now to our people when all of you young men leave?” Yoo’s father had asked angrily. “I will tell you. Everyone goes to the city, and we all will starve.”

  Park had no desire to be a bad son, but he was determined to have a more modern life. In this he was encouraged by his mother. Over the years he had learned that he could talk to her as he could not talk to his father, who tolerated no dissent and responded to whatever displeased him with physical force. She, good Korean peasant woman, had worked side by side with her husband every day, year after year, “like a slave,” said Park. She had never qu
estioned the authority of her husband, but when she understood that her oldest child wanted a better life, she took his side. Park’s final decision, involving the defiance of his father, was difficult. His father loved the farm because it was the only thing he knew; the Korea of his generation had offered nothing better than farming. But Park lived in a world where there were other choices. When he made his choice to leave, his father did not speak to him for a year.

  It was his mother who heard that there were jobs at Hyundai, in the city of Ulsan, and at her urging he went there, one of four hundred men trying for fifty jobs. He was so nervous that he was sure he gave the wrong answer on one of the oral questions (“If something bad happens inside the company, would you tell anyone from the outside?”), but he got a job nonetheless. He had a chance to go into the shipbuilding division of Hyundai, which was then the grandest part of the company. But Park did not want to build ships. It seemed too much like farming, too much time on one project, too little sense of accomplishment. He took a position in Hyundai Motors, then a small, struggling auto company, as an ordinary worker on the production line, and he was sometimes taunted by the shipbuilding workers because auto was much less powerful and the pay not as good.

  The early years were very hard. In a world where most auto assembly was at least partially automated, the Korean line was at first primitively manual. The workers were new and inexperienced, there were few to teach them, and many of the parts they received from the suppliers were poorly made. They were like men working in the dark, for they had no real knowledge of what they were supposed to accomplish or what modern automotive standards were. The line was often down; Park remembered that it functioned about 20 to 30 percent of the time. A shift could make only twenty cars. The workers knew that the cars were not good, but they were told by their superiors to keep working hard and eventually the cars would become better. It was their obligation to persevere, and they did.