Lee Kun-hee, Who Built Samsung Into a Global Giant, Dies at 78

Lee Kun-hee, Who Built Samsung Into a Global Giant, Dies at 78
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Lee Kun-hee, Who Built Samsung Into a Global Giant, Dies at 78

Lee Kun-hee, Who Constructed Samsung Right into a World Big, Dies at 78

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

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

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

Lee Kun-hee pushed the corporate relentlessly up the technological ladder. By the early Nineties, Samsung had surpassed Japanese and American rivals to turn out to be 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 cellular market as cellphones grew to become powerhouse computing gadgets within the 2000s.

Samsung Electronics right this moment is a cornerstone of South Korea’s economic system and one of many world’s high company spenders on analysis and growth. Mr. 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 relations used an online of possession preparations to exert affect over the opposite firms underneath the Samsung umbrella. Over the course of his tenure, whilst skilled managers got here to have extra duty on the group, Mr. Lee remained Samsung’s large thinker, the supplier of grand strategic course.

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

In 1996, Mr. Lee was convicted of bribing the nation’s president, then pardoned. Greater 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.

Quickly after the Pyeongchang Video games, Lee Myung-bak, South Korea’s president from 2008 to 2013 and no relation, was sentenced to fifteen years in jail for accepting $5.4 million in bribes from Samsung in trade for pardoning Mr. Lee.

Lee Kun-hee was born in Daegu, in Japanese-occupied Korea, on Jan. 9, 1942, to Park Doo-eul and Lee Byung-chull, 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 buyer 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 College in Tokyo in 1965. He then studied in a grasp’s program at George Washington College however didn’t obtain a level.

He began his profession at Tongyang Broadcasting Firm, 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 instances appeared good. However he added an overlay of existential worry and ever-present disaster that persists amongst Samsung brass to this present day.

“We’re in a vital transition,” Mr. Lee mentioned shortly after taking cost, in an interview with Forbes. “If we don’t transfer into extra capital- and technology-intensive industries, our very survival could also 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 in 1993. For days, he lectured the executives, urging them to bury previous methods of working and pondering. “Change all the pieces,” he mentioned, “besides your spouse and youngsters.”

Samsung, he decreed, would concentrate on bettering product high quality as a substitute of accelerating market share. It will herald expertise from abroad, and it will require that senior executives intimately perceive overseas markets and the right way to compete in them.

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

“It was very very similar to Mao Zedong making an attempt to alter the mind-set of the Chinese language individuals,” mentioned Chang Sea-jin, a professor on the Nationwide College 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. Based on “Samsung Electronics and the Wrestle for Management of the Electronics Trade,” a 2010 guide 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 “High quality First.” Mr. Lee and his board of administrators sat underneath a banner that learn “High quality Is My Pleasure.”

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

Mr. Lee’s enterprise report was not unblemished. Believing that electronics would turn out to be integral to automobiles, he began an car unit within the mid-Nineties. Samsung Motors was offered off in 2000.

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

“I assumed to myself, ‘How are they going to know something concerning the movie enterprise once they’re so obsessive about semiconductors?’ ” Mr. Spielberg later recalled. “It was one other a kind of evenings that turned out to be an entire waste of time.”

Samsung entered a part of worldwide conquest within the 2000s, utilizing flashy gadgets and modern advertising to implant its title firmly into the minds of Western shoppers. Mr. Lee, nonetheless, was not often seen in public. He was a faithful collector of sports activities automobiles and high-quality 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.

However as he obtained began on his subsequent overhaul of the Samsung manner, accusations surfaced that he had dodged taxes on billions of {dollars} supposedly stashed in secret accounts. As an alternative of combating the fees, he shocked South Korea by saying his resignation on stay tv.

“I promised 20 years in the past that the day when Samsung was acknowledged as a first-class enterprise, the glory and fruition would all be yours,” he mentioned in 2008, addressing staff, his voice a close to whisper. “I actually apologize for not having been in a position to preserve that promise.”

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

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

Along with his son, Lee Kun-hee is survived by his spouse, Hong Ra-hee; his daughters Boo-jin and Web optimization-hyun; his sisters Sook-hee, Quickly-hee, Deok-hee and Myung-hee; and 7 grandchildren.

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