Hyundai Heavy Industries (HHI) suffered about 5 trillion won in operating losses between 2014 and 2015 due to the slumping global shipbuilding industry. In September 2014, Hyundai Oil Bank President Kwon Oh-kap was appointed to become HHI vice chairman to serve as a “relief pitcher” to save HHI, the parent company of the refinery.
Under the stewardship of HHI Vice Chairman Kwon, HHI began all-out strategies to rescue HHI. To recuperate HHI, executives and staff members made great sacrifices. Vice Chairman Kwon began to make sacrifices on his own right away.
He has never received any pay from his company since November 2014. How much salary Kwon has foregone for the past 30 months is not exactly known. Given the fact Kwon received 860 million won in salary while serving as president as Hyundai Oil bank, his lost salary is estimated to stand at about 2 billion won.
HHI Vice Chairman Kwon’s promise to never earn any compensation until his company makes an annual profit looks have come to an end. The reason is that HHI chalked up profits for the second quarter of this year, the sixth consecutive quarter.
Chairman Choi Kil-sun, President Kang Hwan-koo and President Ka Sam-hyun, three of the HHI Big Four leaders, had been joining HHI Vice Chairman Kwon in returning their pay since November 2015.
That HHI’s Big Four leaders returned their pay for more than one year is unprecedented in Korea.
Thanks to sacrifices by HHI’s Big Four leaders, including Vice Chairman Kwon, HHI has shown signs of a turnaround. Staff members’ sacrifices cannot be also ignored. HHI saw its manpower plunge to 23,000 from 28,300 people in 2014. More than 5,000 HHI employees were laid off.
HHI executives and staff members’ concerted efforts to rescue their company have began to yield tangible outcomes earlier this year. What is noteworthy is the improvement of HHI’s fiscal soundness. HHI’s posting of operating profits for the sixth consecutive quarter is owed to the company’s strategies to dispose of its own assets.
HHI implemented a 3 trillion won self-rescue plan by disposing of Hyundai Hotel, and HHI is expected to top the self-rescue goal of securing 3.5 trillion won as the company will implement additional asset disposals in the second half of this year, HHI officials said.
In terms of business performances, HHI outbid other shipbuilders. Three units of HHI Group HHI, Hyundai Samho Heavy Industries, and Hyundai Mapo Dockyard won orders worth a combined $4.5 billion to build 81 ships in the first half of this year. The figure has already surpassed their business performances in 2016 when they won orders worth a combined $5.9 billion to build 64 ships.
The three companies of HHI Group are forecast to win orders worth a combined more than $12 billion by the end of this year, double last year’s figure, HHI officials and business sources said.