Daewoo E&C CEO nominee faces union opposition
By Lee Hyo-sik
Park Chang-min Daewoo E&C CEO nominee
Employees of Daewoo Engineering & Construction (E&C) are expressing displeasure with CEO nominee Park Chang-min who is backed by the builder’s majority stakeholder, the state-run Korea Development Bank (KDB).
Union members and nonunion workers alike oppose the so-called parachute appointment by KDB, according to company officials, Monday.
Daewoo employees are calling on Park to voluntarily turn down the appointment, stressing that they will take all possible measures to prevent the former CEO of Hyundai Development Company from occupying the company’s top office.
“It is a must for Daewoo to expand overseas ventures to achieve sustainable growth in the future,” a Daewoo E&C labor union official said. “Given this, it makes no sense for someone without any experience or expertise in the overseas construction business to be appointed to lead Daewoo. He is not qualified.”
Daewoo E&C earned nearly 40 percent of its revenue from abroad last year.
On August 5, Daewoo’s ad-hoc recommendation committee, consisting of two KDB executives and three outside directors, decided to recommend Park as new CEO. The recommendation will be forwarded for approval at a shareholders’ meeting.
For months, the committee had been unable to reach a consensus on who would replace CEO Park Young-sik, whose term ended July 14. Daewoo’s outside directors, who represent the voice of company employees, sought to promote one of its own executives to CEO.
But KDB, which holds a 50.76 percent stake in the builder, wanted an outsider to take the helm.
The labor union is arguing that Park’s selection will severely undermine the firm’s corporate value, adding that dubious business practices in the past are likely to recur. “We cannot let Daewoo E&C become the next Daewoo Shipbuilding & Marine Engineering. We will mobilize all possible means to derail the parachute appointment.”
Unionized workers also blame KDB for its “flawed” decision-making process.
“KDB has made all the important decisions concerning Daewoo’s future behind closed doors,” the union official said. “The bank should be held responsible for making the latest CEO selection more chaotic than necessary.”
A nonunion Daewoo employee, who declined to be named, also said most workers do not support Park’s appointment. “I don’t understand why selecting the new CEO has to be this controversial. As far as I know, workers want someone familiar with the company to become the next leader, not an outsider.”
The union said it will hold rallies at the company headquarters in downtown Seoul and KDB headquarters on Yeouido. It also plans to physically block Park from coming to office if he is confirmed by shareholders to head the builder.