+ A

Not another man of steel

Apr 21,2018
이미지뷰
이미지뷰
Posco CEO Kwon Oh-joon answers questions from reporters at the steelmaker’s headquarters in southern Seoul on Wednesday after he announced that he would resign at a board meeting. [YONHAP]
Yi Jung-jae

*The author is a columnist of the JoongAng Ilbo.

Reruns are dreary. They’re never exciting because you know what is going to happen. Kwon Oh-joon, chairman of Korea’s top steelmaker Posco, resigned this week despite having two years left of the second term he started last year. The news — announced after a hastily organized board meeting — is hardly surprising. Kwon cited personal reasons, but it seems highly unlikely that he stepped down because he wanted to.

Kwon stood firm for longer than expected. His seat has been insecure ever since President Moon Jae-in took office in May last year. He was not invited to be part of the usual big-name businessman entourage accompanying the new president’s overseas trips to the United States, China and Indonesia. The exclusion was an obvious message of disapproval from the Blue House. Aides said he fretted about when would be the best time to bow out.

Kwon has been shown the door in the exact same way as his predecessor. Chung Joon-yang took over leadership of the steelmaker under President Lee Myung-bak, and ignored pressure from the Park Geun-hye administration as he started his second term. Just like Kwon, he was excluded from the former president’s state visit to China in 2013. Chung chose to ignore the message, and only reluctantly walked out after hearing that he wasn’t wanted from the Blue House.

So what’s next? Since this is a rerun, we can just look back at the last episode. Who heads and runs the biggest steel mill is still up to the Blue House even though the company was privatized in 2000. After it pushed out Chung, the Park Blue House pulled out a list of candidates to refresh the board. Newly-appointed Kwon also had his list of choices, but did not dare to show it to the Blue House. He read out the new appointments given to him by the presidential office.

Kwon’s performance as CEO has had mixed reviews. He had to clean up the mess of his predecessor who ran businesses beyond reason. He shed money-losing projects and deleveraged. As a result, both the bottom and top line improved significantly. But he has been criticized for keeping to his inner circle. He promoted lab researchers and engineers to positions in charge of finance, management and planning. The executive seats were dominated by his classmates in metal engineering at Seoul National University. Although Posco benefited from output and a capacity scale-down in China, many say it could have gained more.

Frankly, I don’t oppose Kwon’s exit. First of all, how he was recruited is not clear. Second, he did not meet expectations as the leader of the sixth largest conglomerate with a revenue of 61 trillion won ($57 billion). I somewhat agree that new wine should go into new wineskins. But I am disappointed that the progressive government kicked out a recruit from the past government in the same old style. It is following the bad practices of the past that it had criticized so much.

What’s done is done. To make up, the government should seat the right person as Posco’s top chair. It must find someone beyond its exclusive progressive circle. The candidate also should be apt in steelmaking and management. The person must be well-versed in steel production.

Steel is at the heart of the trade war between the world’s two largest economies. If the leadership is not top-rate, Posco could be shaken. The helm also should not be handed over to the steel mafia, or the bureaucratic community with shady relationships with the industry. The 50-year-old company is no longer just a steel mill. Its other operations have also expanded. A separate leader could be in charge of non-steel operations such as energy, engineering, ICT and trade.

To make the best possible choices, the government must be clear-headed. If it, too, considers Posco’s managerial titles as trophies for its own people, it should think again. The public is sick and tired of reruns.

JoongAng Ilbo, April 20, Page 30