Cho Hyun-bum, chairperson of Hankook & Co., has pledged to restore newly acquired Hanon Systems' business within three years, vowing to implement sweeping reforms, the company announced Tuesday.
“It is critically important how we innovate Hanon Systems — a company that owns core mobility technologies — over the next three years by accurately analyzing and correcting its past errors and wrong practices,” Cho said during a management strategy meeting Friday.
“While prioritizing execution over planning, strategy and decision-making, we need to move swiftly and work closely together to identify what needs to be done and how to get it done,” he added.
The meeting took place at Hankook & Co.’s headquarters in Seongnam, Gyeonggi Province, with executives in attendance including Hankook & Co. CEO Park Jong-ho and Hanon Systems CEO Lee Soo-il.
Hanon Systems, the world’s second-largest mobility thermal management solutions provider, was acquired by Hankook Tire & Technology — a key subsidiary of Hankook & Co. — through a share purchase worth 1.8 trillion won ($1.23 billion) in December.
However, the company has struggled with a slowdown in global electric vehicle sales and restructuring costs, resulting in a net loss of 334.4 billion won in 2024.
According to reports from securities firms, Hanon Systems faces financial stability challenges, with net debt reaching 3.2 trillion won at the end of 2024 and a debt-to-equity ratio of 251 percent.
During the meeting, Cho emphasized the need to correct past management practices under private equity fund Hahn & Co., highlighting the importance of strengthening research and development, internal communication, market intelligence and management mindset.
He particularly stressed the need to break away from the company's previous accounting policy, which focused on inflating short-term operating profits, and instead adopt an approach that better reflects Hanon Systems' financial condition.
Cho’s remarks came after Hanon Systems' recent organizational restructuring, which aimed to enhance global competitiveness, operational efficiency and financial stability by realigning departments based on the original equipment manufacturer brands they serve.
forestjs@heraldcorp.com
