A clearer view of what matters

Before his term ends, POSCO Group Chairman Jang In-hwa will once again be put to the test as a leader. The process for selecting the next chairman is scheduled to begin this December, but with the preferential reappointment review system abolished, Jang will have to go through the same process as other internal and external candidates. Appointed in March 2024, his term runs until next March.

The results have improved, but the underlying picture shows clear challenges as well. POSCO Holdings posted operating profit of 945 billion won in the third quarter of this year, up 47.9% from a year earlier. However, much of that gain reflected a base effect from POSCO E&C’s large loss last year, while operating profit at POSCO, the steel business unit, fell 22.2%. That means it is hard to say the core business has fully regained its competitiveness based on the groupwide improvement alone.

Chairman Jang is pushing a “triple core” strategy centered on steel, battery materials and energy. Investment in facilities for automotive steel sheet production, a transition to an LFP (lithium iron phosphate) cathode production system, and the acquisition of U.S. shale gas assets have been presented as key steps to secure growth engines. Whether these investments will translate into real business results is likely to become an important benchmark in future evaluations.

Industrial safety is another issue that cannot be overlooked. At POSCO E&C, fatal accidents occurred repeatedly last year, and another death took place in June this year at the Shin Ansan Line construction site. Safety is a matter that reflects a company’s responsibility and management capability, separate from earnings or investment plans. Delivering concrete results in reducing accidents and improving on-site safety remains a heavy task for Jang.

Labor relations have, for the moment, taken a breather. POSCO’s union staged a strike for the first time in 58 years since the company was founded, but on the 30th of last month, labor and management reached a tentative wage agreement, avoiding an additional strike. That said, the provisional deal does not mean the conflict has been fully resolved, so implementation of the agreement and restoration of trust will need to follow.

On the external cooperation front, activity has continued at a brisk pace. Chairman Jang served as the Korean-side co-chair of the Korea-Australia Economic Cooperation Committee, promoting collaboration on critical mineral supply chains, and at the World Steel Association general meeting, he helped secure Seoul as the host city for next year’s conference. This can be seen as part of POSCO Group’s efforts to broaden its global cooperation base.

In the end, the key to the reappointment review will be more than just improved group earnings. The steel business’s competitiveness, the results of new business investments, progress on industrial safety, and restored trust in labor-management relations are all expected to be weighed together. This piece was compiled based on a report from ShinA Ilbo.