HHI cuts 81 executive-level positions

Hyundai Heavy Industries eliminated 81 of 261 executive-level posts yesterday as part of efforts to normalize the company that reported a loss of 1.2 trillion won ($1.1 billion) in the first half of the year.

The decision to cut the positions came four days after the new president, Kwon Oh-gap, announced a large-scale reshuffle for HHI and its affiliates.

Industry sources said the company’s situation may be more serious than had been thought since the job reductions were much larger and came earlier than expected.

Yesterday’s announcement also included 31 promotions. Ha Kyung-jin, vice president of Hyundai Samho Heavy Industries, and Moon Jong-bak, vice president of Hyundai Oilbank, were made presidents.

Meanwhile, 28 managerial-level employees, including Park Hee-gyu of HHH, were promoted to executive jobs.

“The core of these appointments is to make better and more accurate communication channels within the company by reducing the size of the organization,” said a company spokesman. “We also try to dispatch the right people to the right positions.”

Among the most noteworthy appointments was that of Noh Dong-yeol, who ascended to an executive position. It is the first time that someone who joined Hyundai Heavy Industries as a production worker has become an executive. Noh signed on with the company as a shipbuilding engineer in 1974, then later excelled in quality inspections of large vessels, including drillships.

The industry interpreted the move as typical of the style of Kwon, who said earlier this week he would try to find answers in the production field and operate the company with its sales and production departments as its center.

A promotion of a young family member of the company’s major shareholder, Chung Mong-joon, also attracted attention. Chung Ki-seon, who was a managerial-level employee in the management planning department, was appointed as an executive. The 32-year-old joined the company in 2009.

“The company wanted to put a young and talented person in a high-ranking position,” said a spokesman for the company.

Industry sources saw it as a move to strengthen the Chung family’s position in the company.

Since the global financial crisis in 2008, Hyundai Heavy Industries has struggled with its profitability as orders for new ships declined and competition increased.

It aggressively expanded its maritime plant business, but failed to generate substantial profits.

In addition, wage negotiations with its labor union have been ongoing since May.

BY KWON SANG-SOO [sakwon80@joongang.co.kr]