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Hyundai Motor promotes foreign executive in sweeping reshuffle, shares surge

Hyundai Motor promotes foreign executive in sweeping reshuffle, shares surge
FILE PHOTO: The Hyundai logo is seen during the first press day of the Paris auto show, in Paris, France, October 2, 2018. REUTERS/Regis Duvignau/File Photo -
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Regis Duvignau(Reuters)
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By Hyunjoo Jin

SEOUL (Reuters) – Hyundai Motor Co <005380.KS> appointed President Albert Biermann as its first foreign head of research and development as part of a sweeping reshuffle which helped send the South Korean automaker’s shares surging more than 7 percent on Wednesday.

The move, first reported by Reuters on Tuesday and confirmed by the Hyundai Motor Group on Wednesday, is part of preparations for generational change in the executive ranks at South Korea’s second-largest family-owned business empire.

It follows the promotion of Euisun Chung in September to Hyundai Motor’s executive vice chairman, moving him closer to succeeding his 80-year-old father, Mong-Koo Chung, as chairman of Hyundai Motor Group.

Hyundai Motor, which together with affiliate Kia Motors Corp <000270.KS> forms the fifth-biggest automaker in the world, has been battling to reverse falling profits amid U.S. recall costs and weak sales in the U.S. and Chinese markets.

The South Korean duo is also being investigated by U.S. prosecutors and safety regulators over recalls related to engine defects, Reuters reported last month.

Hyundai Motor shares jumped as much as 7.2 percent to 119,500 won on Wednesday, their highest level since Oct. 17, while shares in affiliated companies also rallied.

“The reshuffle signals that the junior Chung is tightening his grip on the conglomerate, a move which raises investors’ hopes for change,” said Kim Joon-sung, an analyst at Meritz Securities.

GIVINGWAY

Hyundai Motor’s two vice chairmen in charge of research and development – Yang Woong-chul and Kwon Moon-sik, both aged 64 – will resign and become advisors, group said.

Hyundai Motor Vice Chairman Kim Yong-hwan, known as Chairman Chung’s top lieutenant, would be new vice chairman of steelmaking affiliate Hyundai Steel <004020.KS>.

The shake-up aims to drive “internal innovation and enhance the group’s ability to respond to the change of the business environment in the future,” group said in a statement.

A person familiar with the matter told Reuters on Tuesday that the executive reshuffle was “part of a generational change (the junior) Chung is pushing for”.

Biermann, a former BMW <BMWG.DE> performance vehicle development official, adds to a flurry of foreign executives that heir apparent Chung, 48, has brought in to a company typically dominated by Koreans.

In October, Thomas Schemera, also a former BMW executive, was appointed to lead product planning for autonomous cars, connected and electrified vehicles, while Luc Donckerwolke, a former Bentley design chief, was appointed to oversee design at Hyundai and Kia.

The group has previously appointed new senior executives at its overseas operations, including China and the United States.

(Reporting by Hyunjoo Jin, additional reporting by Joori Roh and Yuna Park; Editing by Stephen Coates)

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