The top management of Hyundai Heavy Industries, the nation’s top shipbuilder, on Sunday asked all of its executives except for the chairmen and CEO to file for resignation, as part of its desperate restructuring attempt to recover from the aftermath of the record-breaking 1.1 trillion won ($1 billion) deficit it posted in the second quarter.
According to company sources, the group’s vice chairman Choi Kil-sun and the newly appointed CEO Kwon Oh-gap on Sunday delivered the message to more than 260 executives at an emergency meeting.
“We need (to engage in) painstaking innovation for (bringing about) change, to take responsibility for the sake of our clients at home and abroad, our stakeholders and the Korean people,” Kwon reportedly said at the meeting.
The CEO, who was appointed on Sept. 15, just days after the shocking sales report, has previously hinted at slashing salaries of executives. “But Kwon, who is faced with tackling the worst situation ever, thought we need something more,” an insider said.
Those who are requested to quit are the high-ranking officials at the Hyundai Heavy Industries as well as affiliates Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries. Executives who are regarded as essential for the company’s operations will be reinstated later, industry insiders said.
Hyundai Heavy Industries is expected to scale down and restructure the company into production- and sales-oriented entities. Overseas branches and projects will also be streamlined, according to pundits.
This is the first time the group has made such a drastic decision, which reflects the globally strained shipbuilding economy since the so-called global financial meltdown in 2008.
In 2009, then-vice chairman Min Keh-sik and then-CEO Choi returned all of their salaries to the company, encouraging all executives to return up to 50 percent of their salaries. In June, high-ranking officials decided to slash their wages by up to 30 percent, expressing their willingness to take responsibility for the poor results.
By Bae Ji-sook (
baejisook@heraldcorp.com)
