Hyosung son draws attention by quitting

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Hyosung son draws attention by quitting

Attention has been increasing all week in the business community as to abrupt resignation of chaebol scion Cho Hyun-moon from his executive post at an official Mercedes-Benz dealership.

Cho, who is not only the group’s executive vice president but also the second son of Hyosung Group Chairman Cho Seok-rai, handed in his notice at The Class Hyosung, an official dealer for the German luxury brand in Seoul.

The group owns a 58 percent stake in the company, which accepted his resignation on Saturday.

Cho, who also serves as the CEO of a subsidiary named Hyosung Power and Industrial Systems Performance Group, previously held a total of 13 executive posts at the group’s subsidiaries but recently gave up six of them.

The former Harvard Law School graduate came to Korea to head up Hyosung’s heavy industrial business. Due to temporarily poor performances of the business last year, Cho has reportedly been under guidance of his father on comprehensive management.

Cho has been spearheading a remarkable growth of the heavy industry business for the past six years. He put his top priority on hiring capable technicians. From 2007 to 2010, Cho's unit achieved one trillion won ($883 million) in operating profit.

However, the heavy industrial group posted a 45 billion won loss last year for the first time since Cho took it over in 2007.

“Although it seems like the heavy unit is doing well in sales, it has been seeing continuing losses lately as competition in major markets has intensified,” said an official at the company. The official said, however, profitability is forecast to be recovered from the latter half of the year.

Hyosung's heavy unit won a 270 billion won order to build electrical substations in Qatar in March.

Some market observers say Cho stepped down from his executive posts to concentrate his efforts on the heavy industrial business.

However, a local media report claims he threw in the towel due to differences with his brothers over management styles. “There is not much significance in the vice president’s latest resignation because he retains his other positions, which are more influential,” said an official at the group.

By Song Su-hyun [ssh@joongang.co.kr]
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