This year, 8 out of 10 major construction companies replaced their leaders. This move is interpreted as a measure to manage expenses and risks amid concerns that the construction industry could face its worst year yet next year.
According to the construction industry on the 24th, among the companies ranked 1st to 10th in construction capability evaluation this year, POSCO Engineering and Construction, HDC Hyundai Industrial Development, Hyundai Construction, Hyundai Engineering, Daewoo Engineering and Construction, DL E&C, SK Eco Plant, and GS Engineering and Construction replaced their chief executive officers (CEOs).
On the previous day, the POSCO Group promoted and appointed Jung Hee-min, the head of the construction business division (vice president), as the new CEO of POSCO Engineering and Construction. POSCO Engineering and Construction reported 9.9 trillion won in performance (including overseas, plant, and maintenance projects) by the third quarter of this year, surpassing its target of 7.8 trillion won, gaining recognition for navigating through the economic downturn.
This personnel change involved the replacement of 7 CEOs across various subsidiaries and a 15% reduction in the number of executives. The new CEO, Jung, is from the field and is the first internal promotion in 15 years, interpreted as a measure to overcome the construction slump.
On the 6th of this month, HDC Group appointed Jeong Kyung-gu, who was the chief financial officer (CFO) of HDC Hyundai Industrial Development, as the CEO and president. HDC Hyundai Industrial Development received an upward adjustment in its credit rating outlook from Korea Ratings and Korea Corporate Ratings, among others, being recognized for its stable financial structure. Given that adjustments are anticipated in the housing market for the time being, this change is interpreted as a measure to strengthen the financial line to find future growth engines.
Hyundai Construction promoted Lee Han-woo, head of the housing business division, to CEO (vice president) through the executive reshuffle at Hyundai Motor Group last November. This is interpreted as a move to maintain its status in the maintenance market, where it secured the top position this year, led by what is known as a "housing expert." At the same time, Hyundai Motor Group appointed the head of the finance division (vice president) as the CEO of Hyundai Engineering.
Daewoo Engineering and Construction appointed Kim Bo-hyun as the new CEO last month. Given that he led the acquisition team for Jungheung Group, this is interpreted as a group-level personnel change aimed at overcoming the construction crisis. DL E&C appointed Park Sang-sin, head of the housing business division, in August, while SK Eco Plant appointed Kim Hyung-geun, the top CFO of SK E&S, as its CEO in July.
GS Engineering and Construction appointed Heo Yoon-hong as CEO, the son of honorary chairman Heo Chang-soo of GS Group, last March. Heo has made revitalizing GS Engineering and Construction, which suffered image damage due to the collapse of the underground parking lot at a residential complex in Incheon last year, his primary task.
Among the top 10 construction companies this year, only two — Samsung C&T and Lotte Engineering and Construction — did not replace their leaders. Oh Se-cheol, CEO of Samsung C&T’s construction division, is in his fourth year of tenure and will serve until 2027. Park Hyun-cheol, CEO of Lotte Engineering and Construction, also successfully retained his position amid this reshuffle at Lotte Group.
A major construction company official noted, "Following this year, the construction industry is expected to continue to face a downturn due to rising raw material prices leading to increased construction costs, a domestic economic slowdown, and political uncertainties," adding, "It appears that there was a significant leadership change to reduce expenses alongside organizational restructuring and reorganization.