By Kim Yoo-chul
POSCO has shifted into emergency management mode to deal with a series of challenges to its bottom line and business prospects.
POSCO Chairman Chung Joon-yang is leading the way, switching on risk management programs, including a group-wide effort to cut costs and raise efficiency.
``In a meeting with the presidents of POSCO’s main affiliates and senior executives, Chairman Chung told them to step up on risk management,’’ said a company spokesman, Friday.
``There are some concerns over management risk. A company should operate on a risk management footing on a daily basis,’’ Chung was quoted as saying in a statement by POSCO.
He said that Chung is getting closely involved and playing a more active role.
``It’s not cutting costs just for the sake of costing costs. Our primary goal is enhance efficiency to save costs, too,’’ he said.
Chung’s call for emergency footing is unusual because the chairman is known for his aplomb but comes after the world’s third-biggest steel producer’s profits were less lucrative than expected.
Moody’s credit ratings agency recently joined with Standard & Poor’s to cut the corporate credit rating on POCSO as Moody’s thinks POSCO’s financial profile will remain weak over the next 12-18 months given its higher-than-expected financial leverage this year and persistent obstacles within the steel industry in Asia.
POSCO reported operating profit shrinking 26 percent in third quarter earnings results during the July-September period, from the previous quarter.
``The earnings report wasn’t too bad. POSCO is accelerating moves to acquire new growth engines. The Chairman’s asking should be understood in that context,’’ said the POSCO official.
POSCO struck a deal with software giant Google to apply a smart work system in addition to an automated logistics management tool to maximize practical production.
The partnership calls for Google to help POSCO set up a management system driven by Google’s unspecified technology solutions, called ``POSPIA 3.0.’’
Recently, POSCO has been planning to sell its product line through its sales outlets without sticking to steel form or type _ a move which has been regarded as a ``classic case’’ of rationalizing a company’s supply base.
``That’s because our key clients are eager for a one-stop shop, not having to go to separate outlets for hot coils and cold-rolled products, which is part of risk management initiatives,’’ said the official.