Hyundai Motor Group, the world’s third-largest automaker, is set to replace the heads of its auto parts and steel-making affiliates in an earlier-than-usual annual management reshuffle to deal with growing uncertainties in the global market.
The second-largest conglomerate in South Korea reportedly appointed Hyundai Motor Co. Vice President Lee Kyu-seok as CEO of Hyundai Mobis Co., the world’s No. 6 auto parts maker, according to industry sources on Thursday. Seo Gang Hyun, CFO of the country’s largest automaker, was named Hyundai Steel Co. CEO.
The group is scheduled to announce the reshuffles on Friday. Hyundai Motor Group usually shakes up the top management of its affiliates in December.
“The move aims to strengthen the group’s ability to deal with crises in advance in preparation for expected prolonged uncertainties amid the growing volatility in the global business environment,” said one of the sources.
HYUNDAI MOBIS, HYUNDAI STEEL
Lee, who is in charge of purchasing, apparently is very detail-oriented as his work has been very thorough, sources said. Some of them said he is hard to please.
Hyundai Mobis’ current CEO Cho Sung-hwan, who has been leading the company for three years, plans to step down and take an advisory role while focusing on his duties as the president of the International Organisation for Standardization (IOS).
Cho, the first South Korean elected as IOS President, will take office in 2024 for two years. With 167 member countries, the ISO is the world’s largest standards organization in terms of the number of standards for various industries such as automobiles, shipbuilding, aircraft, energy, electronics and healthcare.
Seo was known as the group’s key financial executive as he worked for the accounting and finance divisions of both Hyundai Motor and Hyundai Steel.
“He has laid the foundation for a profit-oriented management system. He has recently been in charge of innovation for sustainable future growth,” another source said.
Ahn Dong-il, the current Hyundai Steel CEO, is poised to resign and take on an advisory role. Ahn, a former executive of POSCO, the country’s top steelmaker, improved automotive steel technology during his five-year term.
Hyundai Steel is expected to generate 20% of automotive steel revenue from sales to other carmakers rather than the group affiliates – Hyundai Motor and Kia Corp. – this year, nearly double the 11% in 2018.
MORE RESHUFFLES AHEAD
The group may replace heads of other affiliates such as Hyundai Engineering & Construction Co., Hyundai Rotem Co. and Hyundai Wia Corp., although the CEOs of Hyundai Motor and Kia are likely to keep their positions thanks to record-high earnings.
“It is hard to say that Hyundai Motor Group completed the management reshuffle for this year as the group pursues unscheduled shakeups and the year-end management changes (in Hyundai Mobis and Hyundai Steel) are being done exceptionally early,” said the other industry source.
The group is expected to reshuffle non-top executives, including vice presidents, in December as usual with appointments of about 100-200 new executives for the goal of innovation with stability. It is predicted to select a large number of employees in their 40s as executives for future growth.
The conglomerate may tap research and development talent as executives for electric vehicle and software-defined vehicle businesses, industry sources said.
“The group is likely to focus on selecting leaders, who will carry out change and innovation amid the uncertain global business environment,” one of them said.
Write to Il-Gue Kim and Sungsu Bae at [email protected]
Jongwoo Cheon edited this article.