DSME execs say they’ll go down with the ship

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DSME execs say they’ll go down with the ship

Executives of Daewoo Shipbuilding and Marine Engineering (DSME) offered their heads on the chopping block Wednesday, saying they would let the company decide their fate after the shipbuilder’s miserable recent performance that led to 2 trillion won ($1.74 billion) in losses there.

The company said 90 executives and managers handed out a statement to workers that also said they would do their best to get the company back on a firm footing. The statements were given out at both the corporate headquarters in Seoul and at the Okpo dockyard on Geoje Island in South Gyeongsang.

The executives say they drafted the statement last weekend; the company’s CEO, Jung Sung-leep, said on Monday that an aggressive restructuring is called for, including shutting down unnecessary businesses and reorganizing divisions to improve business efficiency. But the managerial act of contrition is unlikely to result in any firings; Jung said earlier this month that cutting employees cannot be an ultimate solution to DSME’s problems.

“We will let the CEO decide our fate and everything else,” the executives said in the statement. “We will step down from our posts if the company asks us to do so and will accept a salary cut if necessary, because we decided to do everything we can do to normalize the company. We will try our best to accomplish the goals set for this year and will not hesitate to take the responsibility for the outcome.”

The statement was part of the reaction to the sudden revelation of massive losses that had not been reported before. Earlier this month, the company announced suddenly that it would show 2 trillion to 3 trillion won in red ink in the second quarter because of a poorly performing offshore plant business. The company was the only shipbuilder to post cheery news recently, but the good performance was shown to have been made of fool’s gold.

The executives’ “best efforts” pledge also seemed to ring hollow because DSME is being faulted for hiring outside directors who know little about the industry.

Five of DSME’s eight directors are outsiders. Two are former assemblymen (Lee Jong-koo and Cho Jeon-hyuk). One, Lee Young-bae, once was the director of business planning for a government agency; a third, Jung Won-jong, is a financial professor at Dong-A University who once led a credit company.

Critics say the outside director positions were filled with such people because it tends to think like a public corporation and is open to patronage positions.

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