Back in the Saddle Again

Samsung Chmn. Lee dines with Japanese Keidanren leaders at Samsung guesthouse in Seoul following his return

Lee Kun-hee, chairman of Samsung Electronics, said recently that the Korean electronics giant still has much to learn from its Japanese rivals, despite the waning influence of the island nation’s industrial icons, such as Sony and Toyota, which were once role models for Koreans firms.
Samsung, once an also-ran to Japanese electronics manufacturers, has overtaken its Japanese rivals in the TV and handset markets for the past few years, and further widened the gap during the latest global economic downturn.
“Samsung has been improving for the past several years, but it has a lot to learn from Japanese companies,” Lee was quoted as saying in a meeting with Hiromasa Yonekura, new chairman of the Japan Business Federation, on Tuesday. Hiromasa, president of Sumitomo Chemical Co., visited Seongjiwon, Lee’s private office at his home in Hannam-dong, central Seoul.
He also voiced the need for cooperation between Korea, Japan and China, citing their strength in manufacturing and growth potential. “I think there are a lot of areas where Korean and Japanese firms can cooperate,” he said.
The private sector needs to take the lead [in the cooperation of the three Northeast Asian countries],” he said.
This is his first official activity since he returned to the helm of Samsung Electronics, the flagship unit of Korea’s top conglomerate Samsung Group, on March 24. He left for Europe to campaign for Korea’s bid to host the 2014 Winter Olympics in the eastern city of Pyeongchang. Lee, a member of the International Olympics Committee, plans to meet other IOC members in Switzerland and Italy, and plans to return home around the end of April.
Lee Kun-hee, 68, returned to Samsung Electronics as its chairman, two years after resigning from the group chairman’s post following an independent counsel inquiry into tax evasion and breach of duty.
Despite the move, Lee will not be on the board of directors, Rhee In-yong, a Samsung senior vice president for communication said on March 25.
The senior Lee’s comeback had been predicted since December when he was given a presidential pardon, amid hopes that he could help Korea’s bid to host the 2018 Winter Olympics.
Following the pardon, Lee resumed his work as a member of the International Olympic Committee (IOC).
According to Rhee, CEOs of Samsung companies met with Lee twice in February to tell him that the group “desperately” needed his leadership. “We admit that we had trouble achieving cohesiveness among different business operations. Lee’s return will enable us to introduce more effective strategies, speed up investment and achieve synergies,” Rhee said.
Before his resignation, Lee’s office acted as a central “control tower” managing business strategies across all of the more than 60 Samsung subsidiaries.
Judging by an e-mail statement released by Samsung Electronics, Lee appears to be pegging himself as a savior at a time when a sense of urgency is evident inside the company.
At the Consumer Electronics Show (CES) in Las Vegas in January, Lee said that he would return to Samsung only if he sees a “crisis” befalling the group. “Top-tier global companies are falling. There’s no guarantee that Samsung will be an exception. In the coming 10 years, products that now represent Samsung will mostly disappear,” Lee was quoted as saying. “We do not have time to hesitate. We need a restart.” Lee said.
A Samsung executive, refusing to be named, told reporters that Lee had been shocked by the troubles at Japanese auto giant, Toyota, which might have influenced his decision.
The competition in the market for memory chips and LCDs is increasing, and old foes such as Sony are climbing back on the television front. Samsung Electronics is also burdened by the fact that it has yet to produce a smartphone capable of competing with the iPhone or BlackBerry.
Industry watchers believe that Samsung Electronics is struggling to adapt as the focus of competition in the tech industry shifts from hardware to software, as seen in the markets for smartphones and 3D televisions. nw

Chairman Lee Kun-hee (center) tours the Consumer Electronics Show in Las Vegas early this year accompanied by his son, Jae-yong (right), the chief operating officer at Samsung Electronics, and President Choi Ji-sung.