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Huh Chang-soo, |
"We need to decide what to do and where our focus should be put based on the long-term prospects of our business portfolio," he told 150 executives at the group's headquarters in southern Seoul, Wednesday. "Making a decision about what to do is important. But what's equally important is deciding what to give up."
Huh, who also chairs the Federation of Korean Industries, one of the biggest business lobby groups in Korea, said that the overall climate for business is "tough" and it's unlikely to get better any time soon.
"In this situation, we should retool our organization proactively and come up with fresh ideas to bolster profitability," he said.
"Perhaps we can take advantage of this situation to strengthen our fundamental health and review our business strategies from scratch," he added.
Lee Sung-wook, a GS spokesman, denied allegations that the chairman's remarks hinted at any drastic change in the group's business portfolio.
"The remarks heighted attitudes and the mindset the chairman wants executives to have. It's not an indication of any major change (in the firm's business portfolio)," he said.
GS Group has undergone a tough time in business this year. GS Caltex (GSC), the group's biggest affiliate, saw its operating profits plunge 79 percent in the first quarter from a year earlier amid stagnant oil consumption. In May, GSC reduced the number of its executives by 15 percent and streamlined its operations in an aggressive cost-cutting move.
Earlier this year, Moody's Investors Service and Standard & Poor's downgraded the refiner's corporate credit rating, forecasting that the firm's financial profile will remain weak for at least a year owing to capacity additions from its rivals in China, India and the Middle East.
"We cannot lead the market with a recipe for success that worked in the past," the chairman said. "To meet the fast-changing demands of customers, we should change first."
