Early reshuffles reflect a bad year for chaebol
As part of plans to normalize operations and overcome such crisis, companies are expected to carry out a large scale reshuffle and structural reform, and industry insiders say they will make the move sooner than expected.
The company attracting most attention is, of course, the nation’s No. 1 conglomerate, Samsung Group, which has been without its ailing 72-year-old Samsung Electronics Chairman Lee Kun-hee for more than six months. The company said it will carry out a reshuffle of the high-ranking executives as soon as early next month and the biggest concern is when Lee’s only son and heir apparent, Jay Y. Lee, 46, vice president of Samsung Electronics, will succeed his father.
Another concern is whether Lee’s eldest daughter, Lee Boo-jin, 44, president of Hotel Shilla, will be promoted. She has been expanding her power within the group as president of Cheil Industries and an adviser to Samsung C&T Corporation.
The group also is expected to undergo structural reform since some affiliates, including Samsung Heavy Industries, merged with Samsung Engineering this year and the information technology and mobile divisions at Samsung Electronics have too many executives.
“Officials born after 1960, most of whom are in research and development departments, are predicted to be promoted,” according to one insider.
The nation’s leading automaker, Hyundai Motor Group, traditionally carries out a small-scale reshuffle whenever it needs to add some tension to the organization. Seol Yeong-heung, vice director for China; Choi Han-young, vice chairman of commercial vehicle department; and Park Seung-ha, vice chairman of Hyundai Steel have stepped down from their posts.
“There will be changes in the sales department, both for domestic and overseas, to improve our sales performance in the global market,” said a Hyundai spokesman.
The reshuffle at SK Group is scheduled for mid-December.
The group’s chief, Chey Tae-won, 54, has been in jail since January, so the reshuffle will be handled by the conglomerate’s highest decision-making body, the Supex Council. “Only a small number of officials will be promoted in the group, save for SK Hynix, which has had the best performance this year in the company’s history,” said an SK spokesman.
Some companies like Hyundai Heavy Industries (HHI) already have been reorganized in order to overcome their worst crises ever. The nation’s leading shipbuilder’s total revenue in the third quarter was 12.4 trillion won ($11.3 million) and showed an operating loss of 1.94 trillion won, nearly double the 1.1 trillion won loss it took in the second quarter.
HHI’s accumulated operating loss for this year is more than 3.2 trillion won. In October, HHI cut 81 of 262 executive positions as part of its normalization plan led by 63-year-old chief Kwon Oh-gap. Kwon said he will shut down unnecessary divisions and adjust the bonus system based on employee performance.
The nation’s leading steelmaker, Posco, started operating under its chief Kwon Oh-joon in March and will carry out a reshuffle in December for the first time. Posco traditionally reorganizes the group in February or March. “The competition is getting tougher every year due to an oversupply in the industry,” said a Posco spokesman. “This is part of our plan to overcome such a crisis.”
A week ago, Hanwha Group appointed Keum Choon-soo, who directed the group’s businesses in China, as the director of the planning and evaluation division, the command center of the group. “We changed the man in charge of the division before a reshuffle,” said a Hanwha spokesman. The group is expected to reform the solar business and finance divisions where the group invested a lot, but failed to make much profit.
BY LEE SANG-JAI, KIM HYUN-YEA [email@example.com]
with the Korea JoongAng Daily
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