New Shinhan Life CEO faces tall task
Cheong Mun-kuk
By Lee Kyung-min
Newly appointed Shinhan Life Insurance CEO Cheong Mun-kuk will face a tall order to manage post-merger integration between Shinhan and Orange Life, as the union vehemently opposes his appointment.
Cheong, currently CEO of Orange Life, is to take office in March once his appointment is approved at the shareholders' meeting. He is set to become the first Shinhan subsidiary CEO who has not served as an executive at the financial group.
Known as a restructuring expert, Cheong is widely expected to launch an aggressive integration drive involving a substantial workforce reduction.
Union workers at Shinhan Life said they will continue to protest against any actions Cheong claims are for “corporate restructuring.”
A rally organized by up to 25 workers is ongoing in front of the headquarters of Shinhan Life and Shinhan Financial Group during morning hours when employees go to work.
“We will continue to voice our shared concerns to protest what could shatter our livelihoods in the coming months,” You Jung-sig, the leader of union workers at Shinhan Life Insurance.
“Layoffs are the easiest way to reduce costs, compared to coming up with a long-term, growth-oriented business strategy, which businesses with vision should prioritize over short-term cost-cutting measures,” You said.
Cheong was among “young and fresh” executives nominated by the firm's holding company Shinhan Financial Group Chairman Cho Yong-byoung at a board meeting on Dec. 21.
His success will largely hinge on how well he handles possible conflicts between the two entities with different corporate cultures.
Shinhan is a traditional Korean financial services firm and Orange, formerly ING Life Korea, was previously managed by MBK Partners after the private equity took it over from ING Group.
In September, 2018, Shinhan decided to purchase Orange's 59 stake for 2.3 trillion won ($2 billion) in a bid to strengthen its non-banking sector.
His “infamous” reputation with workers came after he cut 92 jobs as the CEO at Allianz Life, the former Korean unit of Allianz Group, although the dismissed workers were reinstated except for one person.
Allianz is the predecessor of ABL Life Insurance.
He also cut 20 percent of the workforce at ING Life.
However, the union believes Cheong's layoff strategy will not work at Shinhan Life.
The company value will plunge, You said, if Cheong removes workers without considering employee morale.
“The recent handsome corporate profit (at Shinhan Life) is the result of continued hard work and devotion in previous years. He cannot guarantee that his strategy will help improve company performance,” he noted.
Officials from Shinhan Financial Group and Shinhan Life Insurance said nothing has been decided over Cheong's business strategy, declining to comment on the union's protest.
“He has yet to begin his job as the new CEO,” a Shinhan Life Insurance spokesperson said. “It is too early to make any assumptions.”