"TFT Establishment Aimed at Optimal Portfolio"... Andongil Leading Change from Within

[Asia Economy Reporter Hwang Yoon-joo] "We will make this year a second leap forward by promoting efforts in each field to become a competitive steel company. Please watch us closely."

Andong-il, CEO of Hyundai Steel, who is entering his second year in office, has begun to reveal his own style in earnest. The signal was the organizational restructuring carried out at the end of last year for 2020.

After carefully assessing the company's management situation since his inauguration last year, CEO Ahn established a Task Force Team (TFT) within the Planning Office in this organizational restructuring. Among the TFTs, the most notable division is the newly established 'Steel Business Competitiveness Enhancement TFT' aimed at strengthening automotive business capabilities and improving quality. CEO Ahn appointed Jang Cheol-hong, a responsible manager at Hyundai Motor Company, as the head of the TFT. At the same time, a Global TFT was created within the Sales Headquarters to expand global sales of automotive steel sheets and strengthen overseas networks.

When the reporter asked about the purpose of establishing the TFT at the '2020 Steel Association New Year's Meeting' held on the 10th, CEO Ahn said, "The establishment of the TFT within the Planning Office was made because I thought it was time to review how to optimally compose the portfolio," adding, "There are traditional businesses such as shaped steel and rebar, the forged and steel pipe businesses incorporated into us, and other future businesses like fuel cells that are not yet profitable. We need to examine each business deeply."

Changes have also begun in the way of working. The Process Innovation (PI) TFT, which was previously under the head of the Management Headquarters, was changed to report directly to CEO Ahn. Regarding this, CEO Ahn explained, "As the companies have been integrated overall, there are inconsistencies in production systems and other areas," and added, "We moved the PI organization directly under the CEO to unify and simplify the way we work."

There is a reason why CEO Ahn is focusing on the business portfolio and the way of working. Hyundai Steel recorded an operating profit of 34.1 billion KRW in the third quarter of last year, down 66.6% compared to 2018. There are concerns about a deficit in the fourth quarter, and the deterioration of performance is expected to continue into the first quarter of this year.

Accordingly, it is expected that Hyundai Steel will accelerate both strengthening the competitiveness of its core steel business and restructuring. The sale of the steel pipe division is a representative example. The steel pipe division was incorporated into Hyundai Steel through the acquisition and merger (M&A) of Hyundai Hysco in 2015. However, since incorporation, its profitability has been low, and the possibility of sale has been continuously raised. CEO Ahn's statement that "we are reviewing (the sale) from the perspective of improving profitability" is in this context.

CEO Ahn said, "We are internally reviewing the profitability of all business divisions," and added, "Since the market conditions are not good, we are considering parts where profitability is low by product or where we do not necessarily need to manage."

Earlier, Hyundai Steel accepted applications for voluntary retirement from office workers born before 1966. This is the first time since its founding that Hyundai Steel has implemented voluntary retirement.

This content was produced with the assistance of AI translation services.