Kolon Reduces Number of Executives by 40 Percent

On November 21, according to Kolon and related industries, Kolon is planning to settle its regular executive personnel shuffle details for the second half of this year by the end of this week and officially announce them by November 29.

An executive officer of Kolon revealed, “To strengthen responsible management and for business restructuring, we have decided to undergo an unprecedented reduction of executive personnel,” and that “this is not a simple renewal of personnel, but an actual personnel restructuring with a 40 percent reduction of 130 executive officers including the presidents of subsidiaries.” Such restructuring by Kolon is the largest since the foreign exchange crisis.

He also added, “With the personnel reduction, group president Lee Oong-yeol will undergo a full-scale organization reform with three main businesses, chemical and manufacturing fields centered on high value added material business, construction business, and fashion and distribution business, as an axis”, and that “other businesses will be disposed of by such methods as sale or attraction of foreign capital.”

Kolon’s extensive restructuring is because of the sense of an impending crisis.

The group’s main corporation, Kolon Industries Inc., has produced a 23.2 billion won loss in the third quarter due to the long-term labor union strike in the factory of Gumi, North Gyeongsang province, and FnCKolon, the company’s clothing sector, has also seen a loss of 6.7 billion won in the third quarter.

Recently, the fact that an executive of Kolon Capital embezzled 47 billion won came to be known and as a result, the group’s image has suffered a blow.

A person associated with the restructuring headquarters of company A said, “Due to the deterioration of various internal and external variables, there will be many companies underachieving this year,” and that “following Kolon, there will be many companies with the topic of ‘crisis management’ and ‘restructuring’ at this regular personnel shuffle.”

Keuk-In Bae bae2150@donga.com