Hyundai Heavy reappoints incumbent CEOs amid one trillion won sales loss
Hyundai Heavy Industries co-CEO Choi Gil-seon, left, and Kwon Oh-Gap is seen in this file photo, Sunday. / Korea Times file
By Jhoo Dong-chan
The world’s largest shipbuilder Hyundai Heavy Industries (HHI) has retained incumbent CEOs, Chairman Choi Gil-seon and President Kwon Oh-gap, after the company suffered a sales loss of 1.5 trillion won last year.
An HHI official said on Sunday that Choi and Kwon are expected to serve the company as co-CEOs for another term despite last year’s sales loss of 1.5 trillion won. HHI is also reportedly recruiting a number of non-executive directors from finance circles.
“Last year’s sales deficit is rather considered to attribute to the downturn in shipbuilding industry,” said an official.
“Both Choi and Kwon have carried out a strong reconstruction to improve the company’s sales since their appointment in 2014. Only a year and half passed. The company believes that they are leading the company right direction. They just need some time.”
Choi and Kwon’s reappointment will be voted at the upcoming shareholder’s general meeting on March 18. If voted through, two will serve the co-CEO post until March 2018.
Choi and Kwon were greatly applauded for their performance when HHI dominated the world’s shipbuilding industry in the 1990s and early 2000s, but the duo’s efforts fell short of the industry’s expectations as failing to salvage the company’s nose-diving sales deficit in 2014.
The HHI’s sales deficit in 2014 was three trillion won due to slowdown in orders for merchant vessels accompanying with the decline in upstream investment amid falling oil prices. It has since caused the lower sales for the company, as it is not in any position to sell slots at low prices, having already suffered huge operational losses.
Choi and Kwon were then appointed to HHI’s CEO post together in September 2014 after the then CEO Lee Jai-seong, who stepped down to take responsibility for the firm’s worsening performance.
Choi graduated from Seoul National University for bachelor’s degree and had earlier served as HHI’s chief executive and president from 2005 to 2009, before which moving on to chair the Korea Offshore Shipbuilding Association and Korea Plant Industries Association.
As the company faced an unprecedented sales deficit of three trillion won in 2014, the shipbuilding industry veteran was asked to step in once again as HHI’s reliever in September 2014.
After graduating from Hankuk University of Foreign Studies with a bachelor’s and the University of Ulsan with a master’s degree, Kwon first joined HHI in 1978 and served as senior executive vice president from 2007 to 2010. He later moved to Hyundai Oilbank where he served as CEO and was believed to lead the company stable growth until 2014.
Kwon is also the right-hand man of Chung Mong-joon, the firm's largest shareholder with a 10.15 percent stake.
HHI is also expected to appoint former Financial Service Commission chairman Kim Seok-dong and Min Yoo-sung, former Korea Development Bank CEO, as non-executive directors.