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Coal Company CEO Fails to Deliver Reform Pledge

Posted July. 21, 2009 07:50,   


“Please be patient with us until we can make a change.”

Cho Gwan-il appeared full of passion when he took over as president of Korea Coal Corp. in August last year. He announced sweeping changes to a public company that earned the lowest government evaluation for a state-run corporation in the country’s history.

Even company executives said they saw no hope for change. When he ordered them to find ways to eliminate the deficit, they only replied it was impossible.

The union was another obstacle. When Cho said, “I will manage the company under strict principles,” the union responded, “Shall we really stick to principles?” Cho said he felt that the union was hinting at going on strike.

To change the atmosphere, he sent a letter of hope to all employees every Monday. He also devised a management reform program, checked it every 100 days, and visited all coal mining areas in Korea.

The result of last year’s management evaluation of state-run corporations released last month was also devastating for the coal company, which received the second-worst grade of “D.” Twenty-three experts also rated its reform attempt as negative.

Cho managed to avoid dismissal but got a stern warning. Bad labor-management relations seemed to be the main problem.

The CEO, however, was full of confidence Friday, saying, “How can we break with old practices and overhaul backroom dealings with the union overnight? Reform is still an ongoing process.”

The government announced a plan to modernize state-run companies Aug. 11 last year, but as seen in the case of Korea Coal Corp., reform requiring the dismantlement of chronic practices is difficult to implement.