Hyundai Motor Group Executive Vice Chairman Chung Euisun has been elected the new chairperson of the group’s board of directors, in an apparent move to give the heir apparent more managerial power as he seeks to strengthen the future mobility vision.
According to the company, it was decided for Chung to succeed his father, Hyundai Motor Group Chairman Chung Mong-koo, in his chairmanship during a board of directors meeting held Thursday.
The senior Chung has held the position for 21 years.
The change was predicted when the directors last month did not decide whether to reelect Chung Mong-koo as the executive director, hinting at his virtual retreat from the management front.
Chung Euisun has been leading the group by representing the company at major events at home and abroad since he was promoted to the second-highest executive vice chairman role in 2018.
Last year, he was named CEO of Hyundai Motor Group -- along with president Lee Won-hee and Ha Eon-tae -- and auto parts-making affiliate Hyundai Mobis.
On Wednesday, Chung was reelected as group affiliate Hyundai Mobis’ internal director.
In less than a two-year period, Chung has been highlighting the conglomerate’s transformation into a mobility solution provider.
He has expedited investments in hydrogen cars, electric vehicles and air mobility to take the lead in the future mobility industry, amid growing protectionism in major automotive markets abroad.
Chung has led partnerships with and investments in global mobility firms -- mobility company Uber, ride-sharing company Grab, Indian car-hailing company Ola, Croatia’s electric car maker Rimac, self-driving startup Aurora and autonomous driving tech developer Aptiv -- focusing on next-generation mobility such as autonomous and connected cars.
Also, Chung has worked to revamp the corporate culture of the group, which has a reputation for the most disciplinary- and seniority-oriented working culture in Korea.
Hyundai Motor Group’s job titles and pay grades have been simplified, while the conventional dress code for employees has been scrapped.
The group said Chung reportedly stressed the need to restyle the automaker to become more flexible and agile so the group can survive fast-changing industrial trends and competition with rivals.
Despite his active leadership, some market experts had viewed that Chung Euisun may not take the chairmanship of the group’s board of directors, mainly due to concerns that the automaker’s vision to enhance the board’s transparency and independency should be prioritized, separating the business and group ownership.
But amid the deteriorating business environment over the rapid global spread of COVID-19, industry insiders said that Hyundai Motor needed a timely breakthrough via Chung’s leadership.
The Korean automaker has suffered dwindling sales and frozen market sentiment since the COVID-19 outbreak, temporarily shutting down a manufacturing factory in Ulsan.
Operation at Hyundai Motor’s Alabama plant in US also halted Wednesday local time after an employee was confirmed to have developed COVID-19. The automaker’s US unit said the resumption of operation has not been decided yet.
Alabama plant is responsible for manufacturing some 370,000 units annually including popular models such as Sonata, Santa Fe and Elantra -- Avante’s US version.
The Georgia plant of Kia Motors which receives engine supplies from the Alabama plant has also been subsequently halted.
Jose Munoz, chief executive of Hyundai Motor’s North American division, said in a recent interview with The Wall Street Journal that he expects 15-20 percent drop in US sales this month compared to the previous year.
Munoz also told a US news outlet that the automaker is expected to see 10-20 percent of its annual sales affected by the COVID-19.
“It can be seen that Hyundai Motor Group is pinning hopes on Chung Euisun for him to properly cope with the unexpected business situation as he holds chairmanship of the board of directors,” said an industry insider.
Meanwhile, Hyundai Motor Group said that Chung being appointed chairperson of the board of directors is “irrelevant” to holding the management right, stressing that succeeding in the executive management right from his father is not imminent.
“What chairperson of the board of directors does is to call for a meeting and preside over a meeting,” said a Hyundai Motor official.
By Kim Da-sol (email@example.com