Samsung speeds up power transition
By Kim Yoo-chul
Park Keun-hee
Yoon Yong-am
Junior Lee faces task of handling patent battle with Apple
By Kim Yoo-chul
The promotion of Samsung Electronics Chief Operating Officer (COO) and President Lee Jay-yong to vice chairman came as a surprise because there had been speculation that he would maintain his current position.
A Samsung executive said that the one-notch elevation for the only son of Samsung Electronics Chairman Lee Kun-hee and the strongest candidate to succeed him, reflects Samsung’s move to push for leadership change.
The promotion suggests that Lee Jay-young will gain more power to influence the nation’s largest conglomerate.
He will play a bigger role in handling key issues, such as the ongoing patent dispute between Samsung and Apple.
``Maybe, Samsung’s top management reached a consensus to accelerate efforts for a power shift to the third-generation. The current chairman was given that role when he was 45. The junior Lee is now 44,’’ said another source inside Samsung, asking not to be identified.
The chairman’s oldest daughter and CEO of Hotel Shilla Lee Boo-jin and his youngest daughter Lee Seo-hyun, a senior executive at Cheil Industries, were excluded from the promotions.
In a statement distributed by Samsung, the company said the promotion of Lee Jay-yong to vice chairman recognizes his outstanding achievements as a leader of innovation and as an agent of change, which has led to Samsung becoming one of the world’s best-loved brands and to a commensurate rise in shareholder value.
``Lee has also made invaluable contributions to the unprecedented growth of Samsung’s smartphone and TV business,’’ the firm said
Wednesday’s reshuffle includes seven new presidents. But one interesting point is all of the elevated executives are considered as the junior Lee’s trusted lieutenants.
Samsung Life Insurance CEO Park Keun-hee was promoted to vice chairman. Park has a close personal relationship with the junior Lee. The Samsung Electronics’ marketing chief at its mobile division is now the president, while Hong Won-pyo was promoted as president of Samsung’s media solution center.
The new Samsung Corning CEO Park Won-hyu and Samsung Heavy Industries CEO Park Dae-young and Samsung Asset Management CEO Yoon Yong-am are all close to the junior Lee.
Another noticeable point is that the group has given more authority to public relations by promoting Rhee In-yong ― a chief Samsung communications officer _ to president. With Rhee, Lim Dae-key, who is also an expert in PR strategies, was promoted to CEO of Cheil Worldwide.
``The promotion of Rhee and Lim means Samsung plans to seek better communications as it is receiving more attention due to family-related issues. Coordination is the key for the group’s communication strategies,’’ said an official.
Samsung Electronics hasn’t named a new head of its finished-goods division. Kwon Oh-hyun is the chief executive of Samsung Electronics but he mainly handles parts-related business such as displays and semiconductors.
Yoon Boo-keun is leading Samsung’s consumer electronics business as the president, while Shin Jong-kyun is the firm’s handset division chief. Since June, the CEO position of the company’s finished-goods division has been vacant as former chief Choi Gee-sung was transferred to head the group’s control tower.
``Choi is considered a private tutor for the new vice chairman Lee. Choi and Lee will collaborate on various key projects, mostly related to the group’s next cash-cows. With help from Yoon and Shin, Vice Chairman Lee will spend more time to implement advanced manufacturing and supply chain management systems to the 80 Samsung affiliates,’’ said company officials and industry watchers.
Financial markets welcomed the junior Lee’s promotion with optimism that Samsung’s conventional and new businesses will take off under the increased authorities of the vice chairman.
On Wednesday, stock of Samsung Electronics ended at a record high of 1,455,000 won per share gaining 1.75 percent, data from the Korea Exchange (KRX), the nation’s main bourse operator, showed.
``The new vice chairman will put more emphasis on boosting what Samsung is already doing well because he is being asked to prove his management capability steadily. Therefore, we are positive about the business outlook for Samsung’s parts-related businesses,’’ said Daewoo Securities analyst James Song.
``It’s true that Lee managed the partnership with Samsung’s main rivals well over the past two years as COO. That helped us see record revenue and profit amid struggles currently seen by Japanese technology companies,’’ said a fund manager from a U.S.-based investment bank in Seoul, who handles billions of dollars in technology-related stocks.