CEO Kong Ki-young Hyundai Construction Equipment Co. / CEO Joo Young-geol of Hyundai Electric and Energy Systems.
The Hyundai Heavy Group is ready to embark on a new era in its operation after successfully reorganizing its operation by spinning off some of its businesses. In April last year, Hyundai Heavy regrouped its operation into four areas, including Hyundai Heavy Industries, Hyundai Electric and Energy System, Hyundai Construction Equipment, and Hyundai Robotics and clear the way for a holding company system.
The reorganization is aimed at ensuring transparency of the group’s management system, firmer independence of the operation of its affiliates, and making daring investments in R&D activities. In the first half of the year, they will try to clear up circulatory investments by moving from HHI to Hyundai Samho Heavy Industries, Hyundai Mipo Shipbuilding and back to HHI to strengthen the transparency of management.
Hyundai Heavy Industries will move to set up a holding company and boost the health of the group’s finances. In the second half, Hyundai Oilbank will go public to boost the overall financial health of the group, with 1.25 trillion won in funds secured through the issuance of new shares. The move strengthens its no-borrowing management policies to make daring investments in R&D to boost its competitive edge in technology.
Hyundai Heavy Industries Group conducted a generation-changing management reshuffle on Nov. 14 last year, its first major executive appointment following the sweeping reorganization separating the shipbuilding and non-shipbuilding operations.
Chairman Choi Kil-seon is retiring to play an advisory role, while vice chairman Kwon Oh-gap resigned from the chief executive position. The company will be run by its chief executive and president Kang Hwan-goo to strengthen “responsible management,” the company said.
Kwon, credited for efforts to help the firm overcome hardships lasting four years, will head the holding entity of the shipbuilder once it completes the process to transform itself into a holding structure. He is expected to focus on finding new growth engines, upgrading the group’s financial affairs, business reorganization and overseas operation, according to sources. During the reshuffle, the group also promoted Joo Young-geol, CEO of Hyundai Electric and Energy Systems Co. and Gong Gi-yeong, CEO of Hyundai Construction Equipment Co. from vice president to president.
Chung Ki-sun, senior executive director of Hyundai Heavy Industries and grandson of Hyundai group’s late founder Chung Ju-young, was promoted to vice president to lead the vessel and marine business and corporate planning office. He will also be named vice president of Hyundai Global Service Co., the shipbuilder’s ship repair and maintenance unit that began operation in December last year, to jointly lead the firm with CEO Ahn Kwang-hun.
Industry watchers believe that the shipbuilder has tightened the grip of Chung, the eldest son of its largest shareholder Chung Mong-joon, over the group management through the reshuffle.
An official from Hyundai Heavy said the generational change in the management would help the firm to escape the current crisis caused by dearth of orders.
Hyundai Heavy Industries Co., Ltd. (or HHI) is the world's largest shipbuilding company, headquartered in Ulsan, South Korea. Hyundai Heavy Industries was founded in 1972 by Chung Ju-yung, as a division of the Hyundai Group, and in 1974 completed the building of its first ships. In 2002 the company was spun-off from the parent company, the Hyundai Group, as a separate business entity.
HHI has four core business divisions: Shipbuilding; Offshore & Engineering; Industrial Plant & Engineering; Engine & Machinery. HHI also has five non-core related subsidiaries, which are: Hyundai Electric & Energy Systems; Hyundai Construction Equipment; Hyundai Robotics; Hyundai Heavy Industries Green Energy; and Hyundai Global Service.
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