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Construction firms replace CEOs as profits dip
From left are DL E&C CEO nominee Seo Young-jae, Shinsegae E&C CEO nominee Huh Byung-hoon and POSCO E&C CEO Chon Jung-son. Courtesy of each company
By Park Jae-hyuk
Major construction firms have replaced their chief executives with financial experts in recent weeks to brace for a prolonged industry downturn, according to industry officials, Sunday.
DL E&C decided Wednesday to hire former LG Electronics executive Seo Young-jae as the new CEO, following the resignations of his predecessor, Ma Chang-min, and other senior executives last month. The former CEO’s resignation was attributed mainly to the company’s worsening profits from housing construction and a series of industrial accidents that killed multiple workers in recent years.
The company introduced the CEO nominee as an expert in strategic planning and finance, as well as an IT specialist, in response to concerns over his lack of experience in the construction industry.
“The nominee has extensive experience in the field of management, so he is expected to show his leadership for DL E&C’s quantum jump,” a DL E&C official said.
Shinsegae E&C said Tuesday that it dismissed CEO Jeong Doo-young and decided to give the post to Vice President Huh Byung-hoon, who previously served as a chief financial officer at Shinsegae Group and Samsung affiliates.
The replacement came as the construction firm suffered a 187.8 billion won ($139 million) operating loss last year and faced downgrades in its credit ratings.
“The nomination of Huh as the new head of our construction unit shows our group’s will to take care of the construction unit’s financial issue to the end,” a Shinsegae Group official said.
POSCO E&C is another construction firm that recently replaced its CEO with a financial expert.
Former POSCO Holdings President Chon Jung-son, who was in charge of strategic planning and finance at the steelmaker, was appointed last month as the successor to former POSCO E&C CEO Han Sung-hee, who had led the construction firm since 2020.
“The new CEO is expected to prioritize financial soundness and competitiveness of POSCO E&C, which has faced difficulties due to the slowdown in the construction industry,” a POSCO Group official said.
Some construction firms tasked their owner family members with management.
Last year, GS E&C replaced CEO Lim Byeong-yong, a professional manager, with Huh Yoon-hong, the son of the company’s largest shareholder, GS Group Honorary Chairman Huh Chang-soo, to restore its tarnished brand image after a parking garage at an apartment complex in Incheon being constructed by the builder collapsed last April.
Kolon Global appointed Vice Chairman Lee Kyu-ho, the oldest son of Honorary Chairman Lee Woong-yeul, as a new executive director last month.
Taeyoung E&C, which is under the corporate restructuring process due to its liquidity crisis, has been led by founder Yoon Se-young, who returned to management just before the company filed for debt workout last December.