"Geopolitical Risks and Recession, Let's Assess by Crisis Situation"…4 Major Groups Face Growing Concerns in the Second Half

SK Group, Expanded Management Strategy Meeting on the 15th
Chey Tae-won "We Must Strengthen Scenario Planning"

Samsung Electronics Also Holds Consecutive Strategy Meetings for DS and DX
LG Koo Kwang-mo "Let's Create Change"
Hyundai Motor Strengthens Electric Vehicle Drive

Amid the prolonged global economic downturn, the four major conglomerates have consecutively begun discussing their management strategies for the second half of the year and assessing the crisis situation. Geopolitical risks and uncertainties in the domestic and international business environment have persisted for a long time. The concerns of major groups are also focused on overcoming the crisis.

SK: "US-China Conflict, Economic Recession... Let's Establish Management Plans for Each Crisis Scenario"

Choi Tae-won, Chairman of SK Group, is heading to the conference room to attend the '2023 Expanded Management Meeting' held at Walkerhill Hotel in Gwangjin-gu, Seoul, on the morning of the 15th.
[Image source=Yonhap News]

On the 15th, SK Group held the '2023 Expanded Management Meeting' to deliberate strategies for each affiliate and business company centered on the complex crisis situation. The SK Expanded Management Meeting is an annual meeting where SK Group's top executives gather to discuss management strategies, along with the 'Icheon Forum' in August and the 'CEO Seminar' in October. This year, it was held at the Grand Walkerhill Seoul in Gwangjin-gu, Seoul.

Chairman Chey Tae-won of SK Group, who entered the venue on crutches, emphasized the need to strengthen 'Scenario Planning' to respond organically to various risk variables and opportunity factors such as US-China competition and the global economic recession.

In his keynote speech at the '2023 Expanded Management Meeting,' he said, "We are now living in a global transition period where it is difficult to survive with past management methods," adding, "We must advance scenario planning management to respond to unexpected crisis variables, which can be called economic downturns, black swan events (highly unlikely events), as well as opportunity factors arising from US-China competition."

Besides scenario planning, Chairman Chey also called for a reexamination of global strategies. He stressed, "It will be difficult and slow for each SK affiliate to respond individually," and emphasized, "Group-level responses are needed for each market such as the US, China, Europe, and Japan."

About 30 people, including Chairman Chey, Senior Vice Chairman Chey Jae-won, Vice Chairman Chey Chang-won, Chairman Cho Dae-sik, the seven committee chairpersons of the SUPEX Council, CEOs of major affiliates, and external experts attended the expanded management meeting.

It is known that a significant portion of the meeting was devoted to discussing SK Group's financial situation. SK Hynix, the group's main affiliate, recorded a loss exceeding 3.4 trillion won due to weak demand for memory semiconductors and falling product prices. Some predict that the operating loss this year could exceed 1 trillion won. SK On, the battery business affiliate, must continue large-scale investments despite being in a deficit situation.

Samsung Electronics Chairman Lee Jae-yong is seen conversing with attendees at the state banquet hosted by the Secretary of State at the U.S. Department of State in Washington DC on April 27 (local time).
[Image source=Yonhap News]

Samsung Electronics Holds Successive Strategy Meetings for DS and DX Divisions... LG's Koo Kwang-mo: "Let's Create Change"

Samsung Electronics will hold a global strategy meeting on the 20th of this month. The Samsung Electronics global strategy meeting is held twice a year, where domestic and overseas executives gather to review the business conditions of each division and discuss new growth engines and business plans. Chairman Lee Jae-yong is expected not to attend the meeting directly, as in previous years, but will be briefed on business strategies later.

The Device Experience (DX) division, led by Vice Chairman Han Jong-hee, plans to hold a strategy meeting from the 20th to the 22nd. This meeting is expected to focus on strengthening competitiveness in the home appliance business, which has been sluggish due to the global economic recession. The global marketing strategies for the Galaxy Z Flip5 and Fold5, scheduled to be unveiled in the second half of the year, will also be discussed. A reboost marketing strategy to continue the sales success of the Galaxy S23 series in the first half is also anticipated.

The Semiconductor (DS) division, led by President Kyung Kye-hyun, is also expected to hold a strategy meeting on the 20th. The DS division will discuss measures to overcome the complex crisis caused by demand contraction and seasonal off-seasons, and reorganize strategies to secure a technological lead based on market forecasts such as improvement in business conditions due to production cuts. Investment reviews to respond to demand for next-generation products such as AI semiconductors are also expected.

Koo Kwang-mo, Chairman of LG Group, is conversing with attendees at the '2023 Korea Small and Medium Business Conference' held on the lawn of the Presidential Office in Yongsan, Seoul, on the 23rd of last month.
[Image source=Yonhap News]

LG Group has been conducting sequential strategic reporting meetings for each affiliate since the 8th of last month, chaired directly by Chairman Koo Kwang-mo. During this period, CEOs of major affiliates such as LG Electronics and LG Chem attended the reporting meetings to discuss mid- to long-term strategic directions and ways to enhance execution, including future business portfolio strategies and analyses of customer and market changes. It is reported that a sense of crisis was shared regarding the situation where LG Display posted a loss exceeding 1 trillion won in the first quarter, and LG Chem, LG Innotek, and LG Household & Health Care experienced profit declines compared to last year.

Chairman Koo recently emphasized at a presidents' council meeting, "Although the economic recovery is delayed more than expected, let's not be swayed by ups and downs and continuously create change."

Hyundai Motor Strengthens Electric Vehicle Drive

Hyundai Motor and Kia plan to hold a global regional headquarters meeting next month, chaired by each company's CEO. This meeting, attended by regional headquarters heads and key market managers, is held once each in the first and second halves of the year. Although sales performance has shown a steady trend this year as well as last year, concerns about an economic recession have emerged, so measures tailored to this are expected to be discussed.

Hyundai Motor Group Chairman Chung Euisun is attending the 'Korea H2 Business Summit' held at the Hyatt Hotel in Yongsan-gu, Seoul on the 14th. [Image source=Yonhap News]

In particular, in the US, which has emerged as the largest market for Hyundai Motor and Kia, sales have been sluggish because electric vehicles do not qualify for tax credits under the Inflation Reduction Act (IRA). They are responding by increasing the proportion of commercial sales such as rental cars and expanding dealer incentives independently. They are also reportedly pushing to advance the completion date of the dedicated electric vehicle factory, originally scheduled for the second half of the year after next, as much as possible.

In China, where market share has shrunk, new electric vehicles tailored to local demand will be launched. In growing markets such as India, Indonesia, and Vietnam in Southeast Asia, plans to introduce new models or strengthen marketing are expected to be discussed. A decision regarding the Russian business, which is rumored to be withdrawing, may also be made. Domestically, smoothly concluding wage and labor negotiations with the labor union is considered a key issue.

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