Hanwha Promises 1-Year Job Security for Samsung Execs

Hanwha Group has pledged to retain for at least one year all of management of four chemical and defense firms it is buying from Samsung Group under a controversial deal.

High-performing executives will be retained even longer, Hanwha said. The conglomerate earlier pledged to retain 8,200 non-management staff at the companies, but executives were expected to be let go.

A senior Hanwha executive said Monday, "We will of course offer longer-term contracts to managers who perform well."

Another Hanwha executive said, "There were rumors that managers would be laid off, which raised concerns, but we will try to retain all staff."

Samsung Techwin CEO Kim Cheol-kyo also tried to calm fears in an email on Monday, saying, "Job security and even the treatment of management-level staff will be maintained and guaranteed."

Samsung Techwin workers last week formed an emergency committee and are preparing to form a labor union, which is prohibited in the Samsung Group, to protest against the massive deal.

Hanwha announced last week it is buying the chemical and defense firms from Samsung for W1.9 trillion (US$1=W1,112).

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Hanwha Chief Goes Back to Work with Massive Deal

No sooner had disgraced Hanwha Group chairman Kim Seung-youn finished his community service sentence for corruption than the conglomerate announced it is buying four chemical and defense firms from the Samsung Group for W1.9 trillion (US$1=W1,108).

Hanwha will acquire a 32.4 percent stake in Samsung Techwin, which in turn owns a 50-percent stake in Samsung Thales, a joint venture with French arms manufacturer Thales International.

Hanwha Chemical and Hanwha Energy will buy a 57.6 percent stake in Samsung General Chemicals, which also has a 50-percent stake in Samsung Total Petrochemicals, a joint venture with the French oil company Total.

The deal, Korea's biggest since the 1998 Asian financial crisis, makes Hanwha Group the country's ninth-largest conglomerate with assets totaling W50 trillion.

Hanwha has promised to keep on all 8,200 current Samsung workers, but whether the tainted conglomerate can keep the pledge remains to be seen.

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Samsung's Big Deal with Hanwha Signals New Lean Era

Lee Jae-yong

The Samsung Group's decision to sell off its petrochemical and defense subsidiaries to Hanwha signals the start of a new leaner era under conglomerate heir Lee Jae-yong, industry watchers believe.

This is the first time since the Asian financial crisis that Samsung has sold off so many affiliates at once.

The group's financial situation is not bad enough to explain the selloff by itself, suggesting that it signals a new focus on core business by boldly ditching unprofitable units.

Under Lee’s father Lee Kun-hee, who nominally remains chairman although he is gravely ill, the behemoth was locked in an all-out struggle to become No. 1 in every major sector.

But now industry sources say Samsung is shifting its policy and looks to be benchmarking GE’s growth strategy, under which the U.S. company aggressively bolsters core business with strong growth potential while shedding money-losing units.

By selling off its non-core petrochemical and defense businesses, Samsung can now concentrate on electronics, finance, construction and heavy industry.

Others say the conglomerate wants to shield itself from persistent criticism that it is too greedy and would swallow up all of Korean industry if it could.

But it remains massive. The latest asset sale only reduces the number of Samsung affiliates from 81 to 66.

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Hanwha Chief Goes Back to Work with Massive Deal

No sooner had disgraced Hanwha Group chairman Kim Seung-youn finished his community service sentence for corruption than the conglomerate announced it is buying four chemical and defense firms from the Samsung Group for W1.9 trillion (US$1=W1,108).

Hanwha will acquire a 32.4 percent stake in Samsung Techwin, which in turn owns a 50-percent stake in Samsung Thales, a joint venture with French arms manufacturer Thales International.

Hanwha Chemical and Hanwha Energy will buy a 57.6 percent stake in Samsung General Chemicals, which also has a 50-percent stake in Samsung Total Petrochemicals, a joint venture with the French oil company Total.

The deal, Korea's biggest since the 1998 Asian financial crisis, makes Hanwha Group the country's ninth-largest conglomerate with assets totaling W50 trillion.

Hanwha has promised to keep on all 8,200 current Samsung workers, but whether the tainted conglomerate can keep the pledge remains to be seen.

View the original article here