Kia’s Butterfield: At Odds With Korean Culture

October 10, 2005
In the end, it was Peter Butterfield’s tendency to put himself above his company that did him in as CEO of Kia Motors America last week.

Butterfield, a former senior executive at Volvo Cars North America before taking over at Kia in late 2001, had led the company to a terrific growth rate and improvement in the dealer body. Kia’s U.S. sales under Butterfield grew from 223,727 to 270,055 in 2004. And sales are up 6.2 percent this year through September. Stand-alone Kia dealerships have gone from less than 10 percent of the total to about 50 percent.

But Butterfield was seen by his Korean masters as hogging credit. Korean managers at Kia, and its sister company Hyundai, are very different from their Japanese counterparts. The Japanese companies have not minded outspoken, strong American managers in the mold of Toyota’s Jim Press and Nissan’s Jed Connelly. But Korean auto executives have bigger egos and more hunger for the American public eye. Kia’s head public relations executive Kim Custer resigned recently, sources say, in large part over clashes with Butterfield, who believed Custer wasn’t working hard enough to elevate his reputation in the auto industry.

Butterfield, 52, was fired last week during a meeting with dealers, and was scheduled to give two speeches this month to automotive press associations.

Insiders say firing Butterfield became easier for Korean management when headhunters told them Len Hunt was available to take over. Hunt, 50, has run Volkswagen North America the last 18 months before getting ousted by Volkswagen AG. Hunt, who ran the U.S. Audi unit before that, was reassigned to run Bentley worldwide marketing.

Under Hunt’s watch, VW sales have continued to nosedive. Part of VW’s problem has been a slow pace of new product and declining reputation for quality, situations he inherited. But Hunt was also seen by VW as not pulling together successful marketing launches of the new Jetta and Passat, the sales of which have disappointed. Just as Hunt was reassigned, VW has given marketing communications chief Kerri Martin the go-ahead to fire long-time ad agency Arnold Worldwide.

In Hunt, Kia is getting an executive who has become known for driving change. At Audi and VW he sparked changes in how the company identifies and responds to quality problems with vehicles, and how cars are equipped and packaged for the North American market. But when it comes to marketing, which is a huge responsibility of any American head of a foreign-based automaker, his execution on marketing campaigns with the ad agency left a lot to be desired, complain some of his VW colleagues.

At Kia, Hunt will have to attack both product development issues, as well as the future of Kia’s image, which has been stunted a bit by being in Hyundai’s shadow. Hunt takes over as COO, and will report to CEO J.H. Lee, who was just promoted from executive vice president.

It remains to be seen if key executives such as marketing chief Ian Beavis will be affected. And Kia still has to recruit a head of communications.—Jim Burt

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