POSCO Jang In-hwa, Declares Over 1 Trillion KRW Annual Cost Reduction (Comprehensive)

Establishment of 7 Major Future Innovation Tasks
20% Executive Salary Return
Strengthening Secondary Battery Competitiveness

Jang In-hwa, Chairman of POSCO Group, aims to reduce costs by more than 1 trillion KRW annually to secure steel competitiveness. To lead by example in times of crisis, he has decided that executives, including himself, will return up to 20% of their salaries.

According to POSCO Holdings on the 22nd, Chairman Jang recently attended a board strategy session where he established and announced seven major future innovation tasks centered on these points. This came after operating the ‘POSCO Future Innovation TF’ for a month since his inauguration to thoroughly review the overall management status of the group.

Chairman Jang emphasized, "Through the seven future innovation tasks, we will strengthen the competitiveness of core businesses and innovate the overall management system to create a turning point for becoming a top-tier company."

The seven tasks proposed by Chairman Jang are ▲rebuilding steel competitiveness ▲securing fundamental competitiveness and pioneering innovative technologies that match the market value of secondary battery materials ▲establishing a responsible management system for business companies and diversifying new business discovery systems ▲innovating fair and transparent governance ▲enhancing employees’ ethical awareness and strengthening compliance management ▲fulfilling corporate responsibilities based on principles ▲organizational and personnel reform and establishing a horizontal organizational culture.

The group’s mainstay steel business will secure a super-gap manufacturing competitiveness. To overcome uncertain management conditions such as global oversupply and economic bloc formation, structural innovation will be promoted, and steel facilities will be streamlined to achieve cost reductions exceeding 1 trillion KRW annually. To this end, smart factories will be upgraded to Intelligent Factories that integrate artificial intelligence (AI) and robotics technologies, expanding their application across the entire order-production-sales process to increase productivity.

Additionally, plans include developing advanced steel production technology using electric furnaces and gradually expanding hydrogen reduction steelmaking technology to transition to a low-carbon production system, quickly launching products with reduced carbon emissions.

The secondary battery materials sector, which had raised concerns about losing momentum due to the ‘steelman’ image, will also be strengthened. Core raw material plants such as lithium and nickel, which will enter full-scale mass production this year, will be stabilized early. The first phase of the Argentina salt lake lithium plant, with an annual capacity of 25,000 tons, will begin mass production in the second half of this year.

[Image source=Yonhap News]

POSCO Holdings stated, "Although the electric vehicle market is experiencing a temporary chasm (slowdown), we are taking this as an opportunity to actively invest in high-quality resources such as lithium salt lakes and mines, thereby advancing our business strategy." They added, "By strengthening strategic cooperation with customers, we plan to accelerate the commercialization of next-generation materials such as solid electrolytes and lithium metal anode materials and secure the future market."

Chairman Jang also expressed his intention to pursue M&A of promising leading companies in the future materials sector during his tenure.

To overcome the steel downturn and innovate corporate culture, Chairman Jang plans to return 20% of the management’s salaries. He also formalized the review of abolishing the stock compensation system, which he announced shortly after his inauguration. However, he will implement merit-based personnel appointments, such as expanding promotions for high performers, and enhance communication to boost employee pride and restore trust through initiatives like CEO 100-day field visits. Alongside this, various system improvements such as dress code liberalization and job title reforms, as well as continuous changes in working methods including instructions, reporting, and meetings, will be pursued.

From a management system perspective, through the operation of a governance improvement TF, a fair and transparent CEO and outside director appointment process will be established. The POSCO Clean Committee will be newly established to improve the group-wide compliance management system, and a new ethics management declaration aligned with global standards will actively support the internalization of ethical management among employees.

A POSCO Holdings official stated, "Tasks that can be executed will be implemented immediately, and large-scale tasks such as transitioning to a low-carbon production system and M&A will be sequentially executed by 2026." They added, "To enhance task execution capability and achieve results early, the president or head of each business company will be responsible for driving the tasks, and the CEO will regularly check progress."

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