The Daewoo Group - Korea's $50 Billion Fraud
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- Опубликовано: 27 июн 2024
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Daewoo group was once the second largest company in South Korea with $80 billion in annual revenue and 300,000 employees. However, the company collapsed in 1999 due to excessive amounts of debt and accounting fraud.
0:00 - 2:41 Intro
2:42 - 8:36 The rise of Daewoo
8:37 - 12:45 Debt and fraud
12:46 - 16:24 The collapse
16:25 Aftermath and implications
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The effects of the 1997 economic crash is still felt today in Korea with weak middle class and uneven recovery across regions. The rich got richer, poor countryside became ghost towns, and a giant shift in focus in economy from manufacturing to entertainment happened. All because of literally few handful of conglomerate owners couldn’t help their greed.
such a spiral going on in that country. population collapse with uncontrolled capitalism.
Too bad and even sad, I still have a fridge and a mini split from Daewoo after more than 20 years, and the only maintenance they have needed is cleaning, amazing quality.
meanwhile samsung and LG fridge blow up compressor every 4 years😂😂😂
Every fridge over 20 is better quality than anything you can get today. Bought 2 new in the last decade - both compressors are fked. My mother's old fridge hasn't given up after 23 years
This is the reason they are out of business. They never had the mba run the company.
@Richard Jackman Samsung compressor is the timer 🤣🤣🤣
We have a fridge from 1997... Never missed a beat. Daewoo did not believe in planned obsolescence like todays manufacturers
I used to have a Daewoo Lanos. I remember as the company was going bankrupt I was pumping gas at a gas station. This woman at the pump next to me looked over at me and said "Daewoo, more like, Daewon't". It was such a humorous moment. Definitely my favorite memory of that car.
@Bigga Nigga What about that story do you find so unbelievable?
@Bigga Nigga I realize it's probably hard for you to fathom but when you aren't a repulsive person strangers will actually approach you to say topical/funny things. It's a self report when you find a story about a stranger telling another stranger a joke(not even a very good joke) to be unbelievable.
@@hollyroom4503 I have several antique cars, including five 1942-1963 Studebakers, a 1977 Wagoneer, and a 1992 Subaru SVX. Having strangers come up to me to talk about or look at them is something that happens almost every time I take them out. I also foster dogs and just this morning had a couple in a vehicle next to us bring their windows down and wave because one of my hounds had her head out the window at a stop light. People are generally friendly unless you give them a reason not to be.
There is a joke that GM’s in Australia are barely Holden’ together. My cousin was trying to convince me to sell my V8 and buy a Daewoo. I was like this is the first GM with *_working brakes._* I’m not going back to a Daewoo. I drove a Daewoo Nubira CDX. 4 door “Coupe” 2L with power mode. That car was a money pit but good on fuel. The thing was, as soon as the car started “running well” I had to take it to the mechanic’s as there would be some kind of $500-2,000 worth of internal damage somewhere.
I have no idea
Next thing you knew, Daewoo became Chevy and Holden in selected markets. Luckily Lanos stayed as a Daewoo until its sales ended in the year 2000. If im not mistaken, Lanos was replaced by Daewoo Kalos which was later renamed as Chevy Aveo (in most markets) and Holden Barina (in Australia).
Adani Group in India seem to adopt the same template. The govt gifted them with large infrastructure projects; the banks lent money, the financial institutions propped up their stocks; the rating agencies gave them best ratings and the regulator looked elsewhere. As of now the group is battling the aftermath of the Hindenburg report. But time will reveal how the story ends.
Thanks for the Daewoo story; never realised that they were frauds.
Adani is nowhere as important to India as Daewoo was to south korea. They were stopped way before they could get there. So essentially there is very little threat they can make to demand a bailout. International institutions have already cut ties, now indian government entities are also under scrutiny so they wont lend to Adani and without debt there is no way to keep the high valuations.
But yes family run conglomerates are common in Asia.
I am sure other indian family conglomerates like tata birla and godrej also engage in such fraud but are more conservative and are good at hiding it. Maybe thats why they came to Adani's rescue and invested in his FPO. They didn't want to cause problems which would then put scrutiny/regulation on all their practices as well.
Adani started gains in Congress regime.
@@thunderb00m tata , birla & godrej could be doing fraud but so are most Korean companies including Samsubg so let's not talk about ethics in business.
Newsflash: ALL big conglomerates, industrial giants and family run super industrials are running on the same/similar principles: exploit labour, over estimate assets and downgrade debt, huge financial supports from banks and financial institutions which in their turn look the other way, inter company buying and selling to upgrade value, etc, etc and this all under the 'watchful' eyes of politicians that they buy!! Nothing new, nothing special (for them) and the world looks at it and is in aw of their so called 'achievements'!! This is fact since humans stopped their nomadic lifestyle tens of thousands of years ago and started living in dwellings (later villages, cities and countries). The very powerful/rich/supported will always rule the world!!
@@AlphaCentauri24that's why adanis stock went up 30 times after moti ji came in power
The saddest thing is that at one point there were actually all legitimate business and hardworking people. At some point GREED takes over and EVERYTHING went downhill from there. Ambition and hard-working alone will only get you so far but without wisdom, you will fall. and fall HARD.
Nothing is sad about the story. The backward country* made an amazing leap. Everybody is better for it. A couple of Conglomerates failed? - Who cares? Some people were laid offf- well there is an industry to absorb them. The south Korea bubble was a win, win, win
I was working in Korean when Daewoo went under. There is more to the story than just accounting fraud. ALL Chaebols cooked the books during the "IMF Era" starting in late 90s. A freind of mine, who owns a mid sized Korean conglomerate, was good friends with Chairman Kim (He even worked for him when he was younger). When Chairman Kim left Korea the media wrote threat he disappeared. But everyone knew where he was and the Korean government certainly could have brought him back to Korea. Heck, I was in my friend's office waiting for him to finish a call. He was talking to Chairman Kim at time when his whereabouts was supposed to be unknown. I was told no one wanted him back in Korea as he knew too many secrets (all of the corruption). So the Korean government just let him be in Vietnam, etc. My freind also said "People only remember the last thing you did. They forget that Chairman Kim helped build Korea and created so many jobs and wealth for people."
I'm surprised you are trying to explain it. You are correct but I don't think people want to really understand how complex things are in Korea. Its the same way in the US, we talk about "free trade" but ignore the fact that the US was built on protectionism. Protectionism is only bad when other people do it. Ha!
@@michaelashby9654 Some people will be interested. I know that I personally like to know how other cultures interact. Not just the pretty things, but how negative things are treated.
범죄자를 찬양하네 역겹다
@@saynotop2w
Exactly. This is why this is an analysis, not a eulogy. Once you understand this, you may rejoin the class. 🎉
I think the biggest pop culture impact of Daewoo in the West right now is that MadTV sketch where a wannabe yakuza character by Bobby Lee (Tank) is bragging about his "DAEWOO" in a Super Bowl tailgate
Somebody once mentioned to me that the Daewoo automotive car logo looks like a jockstrap and I could never unsee that image again lol
As I watch this on my Korean made phone all I can think is that yes, fraud does occur everywhere, but in the Daewoo case the legacy was still a useful manufacturing industry that exists today. In the west the legacy of fraud, mostly in the tech and banking industry, is just a bunch of bankers spending their ill earned bonuses and not a damn thing built.
Bingo. It all comes down to who you want to be ruled over by. You will be ruled over by some group. Populism is a delusion.
yeah crazier still... you won't believe this right, but it is verifiably 100% true!
When a Swedish person scams you it's somehow even more ethical then when Koreans are scamming, i think it's because we can not harbor ill intentions as to comply with our mandatory public health care optional guidelines, and they rigorously test the compliance levels.
all other scammers are just fraudster IT bankers and cloth moguls... shame on them
ha ha .. betcha that "Korean made" phone was "made in China" ..
@R Phuche It is a Samsung and they no longer make phones in China. More likely Vietnam or India. All the profits still go to a Korean based company.
@davidlea-smith4747 sorry but it is not that simple. They have also issues in Vietnam and is potentially looking elsewhere. Like any Chaebol the goal is profits.
Even with a certain sense of patriotism they do look at profits first. So that why they are still in Chjna or nay lower cost country for manufacturing
In the early 2000s, Daewoo established an automotive dealer network in the US, and I produced TV commercials for their store in the Orlando area. They we well aware of Daewoo's shaky financial status even as they tried to establish a beachhead in the market with a product lineup that quickly earned a reputation for poor build quality and unreliability. I was at the dealership the day GM announced the acquisition, and the employees saw it as a cause for celebration. Surely GM will firm up the foundation under the dealer network and the product reputation! What happened next took them utterly by surprise. GM pulled the brand from the US market, and the dealer network vanished like a puff of smoke.
M&A. 101 absorb your competitor, right. However taking the brand from. The us market doesn't fully make sense unless they Just saw it as uneconomical poorly designed mnfred and didn't want the headache
Interesting..I was actually looking at a DAEWOO car (big shiney new dealer at Natick MA. Th etop model looked pretty good. Two weeks later I went back and the place had closed. I later talked with several people who had the cars-they held up pretty well
The word is “systemic”. The company is not “systematically important” to the Korean economy, it is “systemically important”, as in its important to the system. Systematic does not mean the same thing.
So? Close enough. It sounds like English is not his native language. Or he speaks two languages.
Not close enough. Words matter. So do standards. Wrong is wrong
I mean what do you expect, 40 seconds in they misspelled employees
I had to read this 5 times to understand lol.. I'm french ! I learned something new today
I had a Daewoo AC and it never broke down and was extremely cool for 10+ years. I wondered what happened to them. What a shame.
they sold 2 kind of electronics. Korean JUNK and rebadged Japanese electronics.
Daewoo cars were also aggressively promoted in Southern Europe. They were inexpensive and bland; I don't know how well they were built.
No worse than say a Kia when they were young. Very basic and bland as you said, quite cheap interiors, but the major mechanics (engines/transmissions) were fairly solid.
Actually, i still have a Daewoo Matiz. Pretty good in small spaces, low consumption engine and cheap spare parts. The only problem is the steelsheet case, after 15 years start rusting and need every spring some attention. 😊. Well designed by Giugiaro for efficiency, not for confort.
The ones that made it to North America were complete crap. But cheap crap appeals to some people I guess
We had a Daewoo fridge that lasted over 15 years without any issues.
My parents have a GE freezer in their pantry that has been working flawlessly since 1971. Modern "smart" appliances don't last 53 months, much less years.
I am gonna put this in my watch later playlist since BobbyBroccoli (The Man Who Tried To Fake An Element) has an upcoming video series on Korea's cloning scandal and I think the fall of Daewoo is an important piece of the story so I won't spoil myself
Thank you!
@Ramboost007 THANK YOU. Thanks to your comment I checked out his video on the Man who faked Human Cloning and it is genuinely one of the best pieces of content I have watched on this website. I am forever grateful
I always think of Daewoo as a weapons company but forget how gd massive they really are
The "Chaebols" house of cards lol 😅. The SK Mega Conglomerate enterprises efficiency myth now demystified. Wow 500x leverage ? 😲😱😱
That explosion was due to ammonium nitrate confiscated from a cargo ship and stored in a non-climate controlled hanger at the harbor next to a hoard of fireworks. It was there for 6 years despite numerous letters sent to judges seeking a way to move it, sell it, or donate it due to the explosion hazard.
I'm very wary about conglomerates. I just don't see how they are not bloated. The benefits of "synergy" is very questionable in a lot of these cases. I'm sure some conglomerates make sense but the vast majority should be money pits and ego projects. I'd stay clear of them.
This is a well known issue. Public conglomerates typically trade cheaper than the sum of their parts. It's called a conglomerate discount.
You can hide big losses with conglomerates as they are large and complex
80% of south korean GDP belong to few conglomerates.
they run the show. they choose politicians and judges.
its like China but few CEO not CCP.
And you might not like the barbarians on your border but you really need to worry about the barbarians on barbarians' border. In other words, be careful what you wish for.
They are more of force of nature than human beings. One cannot stop greed. One can only slow it.
At least they gave us "You just got run over by a Daewoo Lanos"
They they got shot in the foot lol.
I LOVE THESE LONGER VIDOES🎉
Could you do an investigation of Temasek Holdings in Singapore? They invest the government controlled pensions of all citizens and have lost billions over the last two decades and keep limiting what citizens can withdraw
Now the Philippine government wanted their own sovereign fund.
Lol really? I thought the Singaporeans were meant to be the least corrupt people in Asia?
Korea was under Martial Law for many years and I am sure a lot of people are not aware or have forgotten the period under Martial Law.
Anytime can happen under such Government including as seen in Philippines during Ferdinand Marcos.
Both supported by the US Government + Military Industry.
Are there any nations that have ended a civil war and not had a period of martial law? I'm not making excuses for the US. I just question how much you know about the situation in Korea after their civil war after being under Japanese occupation.
I'm not a fan of martial law, but they were under real threat of war from North Korea which did everything to sabotage South Korea.
My grandfather had a Cielo and the Daewoo!
Great channel 👏
Hi , love your content and explanation . I have watched your review on Nasper. Can you help to share your breakdown and point of view on BN(Brookfield Corporation) ? As it is looking undervalue and complex too .
we still have its fridge. they made quality products...15 years n still running smoothly
I love how we all successfully bullied WSM into no longer promoting his art buying scam 😂😂
South Korea also received 40B $ aid from america in the 50s and unlimited military support ever since . Important detail in korea growth story
SK was under US occupation, of course money had to go there. The military presence is not free like you imply, USA receives money for having bases all over the world not just SK.
Channeling my inner Vegeta “it’s over 5000%!?!?!?!”
500-1 leverage... now we're talking 😂
My first computer as a kid was a deawoo
Umm... "300,000 EPMLOYEES" at 0:41 btw. If you have the time, given this is so new, could you correct it?
I have a mid 2000s Daewoo VCR. Still works.
All in all, they made decent budget CRT TVs.
Wanna become a great businessman, know the ones making rules, especially when country is suffering
Also so many countries around the world would not be profitable if not for the govt helping them all the time
The Japanese Government was the 1st to do that and now Japan has been stagnated for the last 20+ years.
South Korea's economy under Park Chung Hee was a paradox. The free market economy was centrally controlled by him and managed by companies created by family dynasties such as Samsung, Daewoo, LG, and also smaller low-profile companies that made household products only sold in South Korea. Foreign brands that wanted to enter the South Korean market mostly had to make a joint venture with the local companies or else they could only sell products for niche consumers like the upper-class folks with more money to buy branded imported goods. That meant foreign car brands that prefer to sell their cars as completely build unit models in South Korea such as Peugeot, Citroen, BMW, Mini, Mercedes etc. would be subjected to higher import taxes that inflated their prices, effectively making them "luxury cars". Even imported models that were supposed to be considered as inexpensive city cars and compact cars marketed to middle-class consumers (e.g. Mini Cooper, Peugeot and Citroen-branded hatchback cars) end up with quite expensive price tags despite the fact their rivals are similarly sized Hyundai and Kia-branded compact cars.
Every society is ruled by a well organized minority. This is the "iron rule of oligarchy". The choice is between being ruled by a family that is of your own people or being ruled by an elite who has no connection to you and may even hate you and your people. Those are really the choices. Korea has decided they would rather be ruled by families that are of the same tribe. Korea is able to adapt quickly to change yet maintain their cultural heritage as a result. They have very low homelessness, high social cohesion, and strong family cohesion. In contrast, you have the US which is ruled by elites that you can't even identify and many probably don't even live in the US. The only connection between the ruling elite of the US and the people is money and power and how to extract both from the US. The US has very high homelessness, unaffordable housing, unaffordable healthcare, endless pointless wars, low social cohesion, and a steep decline in family formation (measured by fatherless children).
As I see things, those are your choices. From the ruling elites perspective, the US is ideal. From the ruling elites perspective, Korea is backwards and "needs to modernize".
Look at Samsung 2017
you are totally clueless
Also viewing pornography is illegal in South Korea just one of the civil liberties their people don't get to enjoy.
I run a Daewoo CNC mill sometimes
That will be the Daewoo, remember passing their head office in London in 1998 and being empty and signs of a chaotic clearing
I had one of their video recorders - no complaints
Nice video
I’ve a Daewoo pistol from the 1990’s that I got for next to nothing at a pawn shop - zero, and I seriously mean no malfunctions in 20 years… amazing quality and reliability … what happened to that company?..
Дякую це було цікаво та інформативно 👍
In russian please 😂
it's always super funny to see creators promote AI as if it isn't designed to replace them eventually
I could pave my streets with gold also if I was lent 50 billion.
@@tripplefives1402 Who cares - let the next generation sort it all out. ;)
@@tripplefives1402 definitely...source...trust me bro
Which is why commonrs dont get loans
It's interesting to think what this company might have turned into.. When you look at the likes of Hyundai and Samsung and how they have improved over the last quarter century, assuming Daewoo followed suit (which they probably would have..)
I don't believe Samsung has 500 subsidiaries ...
Hyundai's first home produced car (as in, not licensed designs of other manufacturers) was considered so unsafe, that even the USA would not allow it to be sold, but they are a leader in the EV car market now. Daewoo and Hyundai both made clone computers in the 80s too. And even Samsung made clone home micros and consoles.
I forgot about those disposable turds named Daewoo... I remember when Hyundai rolled out the very first car it was like $4500 and you were told to throw it away at x amount of miles
Great analysis, as always. Gentle nudge:
SYSTEMATICALLY important should read SYSTEMICALLY important or relevant 👍🏻
Looking forward to more of your great content.
damm.. i just bought the aircon ...
Brother: watch out your audio, transition whoosh too loud, bring it down two or three notches, keep up the good videos, all best.
Employees is misspelled
I don't really have an issue with this ad read for once but... isn't it incredibly niche? I'm curious what percentage of your viewers is in content creation and would benefit from this particular ebook.
it is a scam
That would be the problem of the company. If they think this is the way to go, ... please proceed!
It's from HubSpot, a big company that sells "this will help sales personnel" type stuff. I think this may be more about establishing HubSpot as a "they know how we should use AI" -company in the minds of whoever is watching than it is about finding people who want to read their e-book.
Another Video 🎉
My car still runs to this day I hope nothing breaks on it bc I'll never find parts for it
Many similarities with adani here
Wow, it looks like South Korea was built on a bubble
Prodigious growth always is.
The 1998 Asian Financial Crisis exposed everything
But at least unlike a real estate or other asset and/or speculative bubbles it left behind infrastructures, industries and a better educated workforce, its not comparable, it did create massive amount of real wealth for the average Korean
19:25 apparently also mandating that everyone have green roofs on their buildings.
I remeber ehn they tried selling those boxes in America for like 3 years
Why doesnt the world bank endorse this kind of development plan if it was successful in all the asian dragons?
Doesn't facilitate the interests of the people funding the IMF, developed nations. SK got where it is through protectionism/tariffs and subsidised competition. Do you think Japan or Europe or the US wants a country to develop to compete with them, or to provide cheap resources and buy their exports? The IMF approach is the complete opposite of what SK did. They force openness and reducing on tariffs and lower government spending.
The purpose of the world bank etc is to keep poor countries poor. No its not a leftist conspiracy theory😊
My 2002 Daewoo Matiz lasted for 20 years
employees misspellleddd ;)
When I was young our first brand new car we ever bought was a Daewoo Nexia... T'was not a good car...
Deawoo was my first car… good times
8 years wow
No one else caught this? Like how is this 8 years especially after fleeing the country?
This makes me think of Carnik Con
“Daewoo: Woman no drive”
but intercompany transactions should be checked by auditors to make sure the price is market price.
also assets should be checked for impairment
what is "epmloyees"?
Their goods are still holding up. Their firearms are respected in the industry even now.
We use a Doosan Daewoo forklift.
My father owned a Daewoo Prince car for years. It was amazing and there’s still lots of old Daewoo cars in the streets of my city (Baghdad) I’ve wondered why there aren’t any new models of them? Now i know why
Adani next...
Missed a spellcheck at 0:41.
My first car was Daewoo and it was better than any German car I ever have
What happens when a government tries to play the free market to their advantage.
Asianometry did a good video on this.
Every now and then I still see a beat up Daewoo on the road.
Conglomerate culture is an overall problem in all 11 southeast Asian Countries not isolated to South Korea nepotism and family rule and run companies are a cultural problem in Asia.
Corruption and monopolisation is the norm in Asia which is why there is still great poverty in most of the 11 countries even though they are extremely wealthy countries.😢
300,000 EPMLOYEES? Is that Korean for employees?
My first car was a Daewoo Nexia hahahahah it was a pretty crappy car.
employees is spelt incorrectly.
Nice
Being ultra rich is cool. But ide rather be worth 30 million and do everything in the right way.
In 1997 there were no euro's yet
chaebols gonna chaebol
D/E 500%?!
it's a shame, Daewoo was making pretty great CRT TVs, maybe not as good as LG but still (IMO LG were the best, sony doesn't even come close)
Hmm this leaves out the fact the dude and his family were French citizens the whole time
1:00 Dude wore lipstick?
No he was just eating your anoose.
I wish i had "300,000" epmloyees!
👌👌
What about Adani Group of India? I am afraid.
Criminal Cartel.
재발 in korea will never go away.
South Korea is in another recession 😮 inflation increases
Man their cars were rubbish though. We it used to call them dogpoos.
300,000. EPMLOYEES?
Like normal employees except less benefits!
day-oo, not day-wuh!
My Family's first VCD Player is Daewoo :v
So literally the same scheme almost every company is doing still.....