The union of Daewoo Shipbuilding & Marine Engineering has reacted angrily to the choice of Jung Sung-leep as new chief of the world’s second-largest shipbuilder.
The state-owned Korea Development Bank, the largest shareholder of DSME, on Monday recommended Jung, the incumbent CEO of STX Offshore & Shipbuilding, as the company’s new president. The development comes after months of indecision whether to reappoint current DSME president Ko Jae-ho or find a new candidate.
“(Choosing an outsider) reflects the bank’s intention to undergo a major restructuring process soon,” the DSME union said in a written statement on Tuesday. “It is also the bank’s attempt to make Jung serve as its mouthpiece before selling off the company.”
Jung Sung-leep.
If Jung’s nomination is confirmed at the shareholders meeting in May, he will be returning to the shipbuilder nine years after he left for STX. His nomination will be the company’s first naming of an outside personnel since it graduated from a debt workout program in 2011.
The union believes the KDB’s recommendation of Jung caps weeks of rumors that the KDB is seeking to boost short-term profit in order to sell the company at higher price. The sale price of DSME is estimated to be around 2 trillion won ($1.8 billion) by industry watchers.
Jung, a naval architect with a degree from Seoul National University, started his career with KDB when South Korea was entering the shipbuilding industry. After spending five years at the bank, he joined DSME in 1981 and worked there for 31 years before leaving to join STX.
Amid a prolonged slump in the shipbuilding industry, DSME exceeded its yearly orders target of $14.5 billion last year, securing contracts worth $14.9 billion. The company was the only firm among the top three local shipbuilders to surpass its annual goal last year.
By Suk Gee-hyun (monicasuk@heraldcorp.com)
