Lotte’s endangered dream

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Lotte’s endangered dream

The creation of a 555-meter (1,800-foot) skyscraper that will be an indoor and outdoor wonderland for both kids and adults - the Second Lotte World - had been a life-long dream of Shin Kyuk-ho, the founder of one of South Korea’s largest conglomerates. Shin, who will turn 93 this year, has always said his last wish was to build the world’s tallest Lotte World, a second version of the city’s premier amusement park.

Shin is close to seeing his dream come true. The 123-story building will be completed by the end of next year, nearly three decades after his company purchased the land in Jamsil, southern Seoul. It may not be the world’s tallest, as Shin had originally envisioned, but still the aged entrepreneur should be brimming with pride for realizing his dream of building the tallest theme park-shopping-recreational complex in Seoul. In a perfect world, Shin would be cheered by 10 million Seoul citizens.

It appears that Shin will get just half of that dream. His dream project has become kind of a nightmare after a chain of accidents - 12 in just the last two months. Lotte complains the media makes a big hoopla over nothing. The accidents may not be big but the fact that Lotte considers 12 accidents insignificant is a big thing indeed. Water can leak from a giant aquarium and cinema floors can shake.

But casualties cannot be taken lightly.

When a construction worker fell from the eighth floor and a 130-kilogram (287-pound) door fell on a customer, Lotte did not immediately call for emergency aid. It explained that its officials were too engrossed with taking their own emergency actions. One opposition lawmaker claimed that Lotte employees were trained not to let any mishaps in the new building become known to the outside world. Lotte has been trying to cover up and make excuses. But the more it tries to hide, the more people suspect there is something fishy going on.

The company has done itself no favors in its attempts at crisis control. Executives blame the PR office for failing to control publicity, saying construction on such a scale cannot be without problems. But putting the blame on the PR department won’t make any problems go away.

Even if the PR department is incompetent, it may be because the over-zealous attention from the founding family was too much to handle. No one can maintain good judgment when they are under enormous pressure. What results is cover-up and distortion of facts instead of quick and transparent communication. The root of the problem may be the same egoistic and top-down family management that led to the Korean Air heiress’s “nut rage” and our former President Lee Myung-bak’s blind ambition to completely renovate the country’s four rivers within his five-year term.

The Second Lotte World, which partly opened in October, saw visitors drop to 70,000 in two months from 100,000 in the first month. It was mostly empty last weekend. A safety supervisor was replaced and the organization toughened. But so far those actions haven’t gained credibility. The company needs to overhaul its entire attitude and its approach to safety issues.

DuPont has been placing top priority on workplace safety. Its devotion to safety dates back 200 years to when the company lost 30 percent of its employees in a major explosion. Since then the chemical company’s founder invested to build safe factories. It has strict rules.

No employees can be put to work until the chief executive or supervisor tests new machinery first. Anyone driving without a seat belt will be fired. It firmly believes all accidents are preventable. Investment in safety led to revenues from unexpected areas. DuPont now consults on workplace safety and sells safety-related equipment and materials. Safety control accounts for about 11 percent of the revenues of the chemical company. This is what we call learning from a mistake.

It is not too late for Lotte and its founder’s cherished pyramid. If it is determined to build the world’s most fun building, there is no reason why it cannot make it the safest as well. Someone should seriously advise the chairman to close the building down for a month or two to re-examine the facility from the bottom up, every nut and bolt. If the mall closes for a month, Lotte would lose about 100 billion won ($91.2 million). Image is everything for a retailer and entertainment operator. If rumors and safety concerns continue and even snowball, Lotte’s Tower could turn into a tombstone instead of pyramid for the owner.

JoongAng Ilbo, Jan. 8, Page 34

*The author is an editorial writer of the JoongAng Ilbo.

by Yi Jung-jae
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