For much of his life Steve Kelleher has been a goalie and, as such, the last line of defence. But since becoming president of Hyundai Auto Canada Corp. in 2002, Mr. Kelleher has been on offence – and on a winning streak.
He tended the goal easily at Cornell University in Ithaca, N.Y., but filling the skates was more difficult, since he followed by a few years Ken Dryden, who had a reasonably successful run there and later in net for the Montreal Canadiens.
Mr. Kelleher discovered that after his first game, a 5-4 victory over Colgate University, when a reporter from the student paper came into the dressing room and asked how he felt about letting in four goals. “Dryden never let in four goals – that was the inference,” he recalls.
He shrugged it off – Cornell won the game, after all – and has since carved out a success story of a different kind, leading Hyundai into the top six auto makers in Canadian sales by more than doubling its market share since he became president in 2002. And while the 59-year-old Toronto native no longer straps on the pads and skates between the pipes, he attributes some of his success in the business arena to lessons he learned at the rink.
Aside from the obvious principles of teamwork and discipline, Mr. Kelleher says the biggest lesson he learned was this: “It’s not a democracy playing on a hockey team. This guy is coach and he makes decisions and sometimes you don’t totally agree, but you get in line and you do it for the better of the team.”
So years later, when Hyundai zone managers told him that dealers across Canada would balk at a costly plan to renovate dealerships, it was time for a dressing room pep talk. Such “imaging” programs involve architectural and display guidelines, specified by head office, that can sometimes cost dealers millions of dollars. But Mr. Kelleher believed that dealers needed to be better positioned to take advantage of a flood of new vehicles.
He recalls telling his staff that he heard their concerns, but was going ahead with the program. “It turned out to be the right thing to do,” he said. “And it [contributed to] our growth when we did expand our product line and had more product to showcase.”
The Canadian operations were the first in the global Hyundai empire to put an imaging program in place. Getting out in front of the competition is another hallmark of Mr. Kelleher’s leadership.
When the auto industry hit a trough in 2008-2009 owing to the recession, Mr. Kelleher decided it was time to step on the accelerator, just as other auto makers were hitting the brakes.
“We made the decision and pitched for the budget to be aggressive as hell and come out of the gates in January ,” he recalls. “Not hunkering down, not cutting our advertising budget, not cutting our marketing budgets, but increasing because we thought we had the perfect product to be able to pick up. … That’s the kind of decisions we made here, not across the pond.”
When he proposed the plan to head office in South Korea, he didn’t get a no, but he recalls looks of concern. “That was a little bit of a sell.”
While mounting an offensive in a slumping market, he also unleashed what became known inside the company as “Dealer Storm” – an expansion of Hyundai’s dealership network by taking over Chrysler Canada Inc. and General Motors of Canada Ltd., franchises that were being terminated as those two companies restructured.
Hyundai gained about a dozen new outlets and an immediate bump with its first presence in such secondary markets as Brandon, Man., Courtenay, B.C., and Port Hope, Ont.
The result was a big burst in sales and market share, just as a wave of bad news hit the industry. Chrysler LLC and General Motors Corp. filed for bankruptcy protection, Ford Motor Co. was forced to restructure, and Toyota Motor Corp. was damaged by a recall crisis in 2010 and the natural disasters that affected all Japanese companies in 2011. It presented Hyundai with a splendid opportunity.
How much of it was luck?
“That’s why I say I didn’t make the NHL. I wasn’t in the right place at the right time,” he says over a buffet lunch at Tivoli Garden in a hotel in Markham, Ont., about a kilometre from the company’s head office.
Successful companies, he points out, position themselves to take advantage of such opportunities. So, as the past decade unfolded, Hyundai found itself with three big tasks on its to-do list: It had to design and develop the right vehicles, repair its historically ghastly reputation for quality, and convince dealers to upgrade their stores, so they and the company could be poised to gain from a flood of new vehicle offerings.
“If our product wasn’t good, and even if people were giving us a look, because of all those other things we wouldn’t have made the inroads we did,” he says. “Testimony to that is that with the Japanese back in full swing – more full swing than they’ve ever been – our market share has held.”
Mr. Kelleher’s 10-plus years at the helm of Hyundai Canada make him the longest-serving top executive in the industry, no small achievement at an auto maker that is notorious for micromanaging offshore operations for its home base in South Korea. He is also one of a handful of Canadians at the wheel of an auto maker in this country, where chief executive officers of subsidiaries are typically foreign-born and generally come and go about every three years.
Apart from the challenges that come with rapid growth, the first serious crisis for the company in recent years arose last fall, when Hyundai Canada’s parent company and sibling Kia acknowledged that the fuel economy numbers they claimed for about 900,000 vehicles sold worldwide were false.
Class-action lawsuits were launched in both Canada and the United States and the ensuing negative publicity could have severely damaged the brand.
But Hyundai globally and in Canada moved swiftly to compensate customers with a prepaid credit card that reimbursed them based on gas prices and the kilometres they drove, then added 15 per cent.
The concern among consumers, as Mr. Kelleher tells it, is not that the vehicles use one-third of a litre more gas to travel 100 kilometres than Hyundai advertised.
“The big issue with consumers [is] it wasn’t right,” he says. He hopes their attitude will be that the gas cards are atonement enough for the mistake. Hyundai’s sales figures for November and December in the immediate aftermath of the scandal – up 20 per cent and 21 per cent respectively year-over-year – appeared to indicate that sales did not suffer. Sales for all of 2012, at 136,283, set a record.
For Mr. Kelleher, that’s a relief. After all, a goalie is never offside.
Born Oct. 10, 1952, in Toronto.
A hockey scholarship took him to Cornell University in Ithaca, N.Y. He graduated in 1975.
Worked at the Ford Motor Co. of Canada Ltd. parts depot in Brampton, Ont., and earned his MBA at York University in Toronto before joining Hyundai Canada in the parts department in 1986.
Appointed Hyundai’s vice-president of sales, marketing, parts and service in 1997; became president and CEO in 2002.
He and his wife, Ursula, have a daughter Erin, 18, and a son Michael, 17. “Erin played goal, despite my best attempts to convince her otherwise,” Mr. Kelleher says.
He gave up hockey 10 years ago, mainly because of the increased demands on his time when he became president.
He was an assistant coach of his daughter’s rep hockey team in Durham Region, east of Toronto.
Established Hyundai Hockey Helpers, which assists deserving children to defray the costs of joining organized hockey.
Likely to be found at a movie theatre, art gallery or the Royal Ontario Museum on a Sunday afternoon.
ON THE BOOKSHELF
Currently reading Grave in Gaza by Matt Beynon Rees, but also enjoys historical biographies and historical fiction.
IN HIS OWN WORDS
“Most Saturdays, I’m here. It gives me quiet time to take care of the more strategic issues and not be bothered constantly.”
“We have to carve out a place in the market by people knowing that they’re going to get features that they want and use in a vehicle at an accessible price. Do people driving a car need all that crap in a car? I don’t need my car to tell me where the best Italian restaurant is that’s closest to my car. I could still do that before I start driving.”