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Lee Kun-Hee, force behind Samsung’s rise, dies at 78

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Kim Tong-Hyung And Hyung-Jin Kim, The Associated Press


Published Saturday, October 24, 2020 9:45PM EDT


Last Updated Saturday, October 24, 2020 10:31PM EDT

SEOUL, Korea, Republic Of – Lee Kun-Hee, the ailing Samsung Electronics chairman who transformed the small television maker into a global giant of consumer electronics, has died. He was 78.

A Samsung statement said Lee died on Sunday with his family members, including his son and de facto company chief Lee Jae-yong, by his side.

Lee Kun-Hee had been hospitalized since May 2014 after suffering a heart attack and the younger Lee has run Samsung, the biggest company in South Korea.

“All of us at Samsung will cherish his memory and are grateful for the journey we shared with him,” the Samsung statement said. “Our deepest sympathies are with his family, relatives and those nearest. His legacy will be everlasting.”

Lee Kun-hee inherited control from his father and during his nearly 30 years of leadership, Samsung Electronics Co. became a global brand and the world’s largest maker of smartphones, televisions and memory chips. Samsung sells Galaxy phones while also making the screens and microchips that power its rivals, Apple’s iPhones and Google Android phones.

Samsung helped make the nation’s economy, Asia’s fourth-largest. Its businesses encompass shipbuilding, life insurance, construction, hotels, amusement park operation and more. Samsung Electronics alone accounts for 20% of the market capital on South Korea’s main stock market.

Lee leaves behind immense wealth, with Forbes estimating his fortune at $16 billion as of January 2017.

His death comes during a complex time for Samsung.

When he was hospitalized, Samsung’s once-lucrative mobile business faced threats from upstart makers in China and other emerging markets. Pressure was high to innovate its traditionally strong hardware business, to reform a stifling hierarchical culture and to improve its corporate governance and transparency.

Samsung was ensnared in the 2016-17 corruption scandal that led to then-President Park Geun-hye’s impeachment and imprisonment. Its executives, including the younger Lee, were investigated by prosecutors who believed Samsung executives bribed Park to secure the government’s backing for a smooth leadership transition from father to son.

In a previous scandal, Lee Kun-Hee was convicted in 2008 for illegal share dealings, tax evasion and bribery designed to pass his wealth and corporate control to his three children.

The late Lee was a stern, terse leader who focused on big-picture strategies, leaving details and daily management to executives.

His near-absolute authority allowed the company to make bold decisions in the fast-changing technology industry, such as shelling out billions to build new production lines for memory chips and display panels even as the 2008 global financial crisis unfolded. Those risky moves fueled Samsung’s rise.

Lee was born Jan. 9, 1942, in the southeastern city of Daegu during Japan’s colonial rule of the Korean Peninsula. His father Lee Byung-chull had founded an export business there in 1938 and following the 1950-53 Korean War, he rebuilt the company into an electronics and home appliance manufacturer and the country’s first major trading company.

Lee Byung-chull was often called one of the fathers of modern industrial South Korea. Lee Kun-Hee was the third son and his inheritance of his father’s businesses bucked the tradition of family wealth going to the eldest. One of Lee Kun-Hee’s brothers sued for a bigger part of Samsung but lost the case.

When Lee Kun-Hee inherited control from his father in 1987, Samsung was relying on Japanese technology to produce TVs and was making its first steps into exporting microwaves and refrigerators.

The company was expanding its semiconductor factories after entering the business in 1974 by acquiring a near-bankrupt firm.

A decisive moment came in 1993. Lee Kun-Hee made sweeping changes to Samsung after a two-month trip abroad convinced him the company needed to improve the quality of its products.

In a speech to Samsung executives, he famously urged, “Let’s change everything except our wives and children.”

Not all his moves succeeded.

A notable failure was the group’s expansion into the auto industry in the 1990s, in part driven by Lee Kun-Hee’s passion for luxury cars. Samsung later sold near-bankrupt Samsung Motor to Renault. The company also was frequently criticized for disrespecting labour rights. Cancer cases among workers at its semiconductor factories were ignored for years.

In 2020, Lee Jae-yong declared heredity transfers at Samsung would end, promising the management rights he inherited wouldn’t pass to his children. He also said Samsung would stop suppressing employee attempts to organize unions, although labour activists questioned his sincerity.

South Koreans are both proud of Samsung’s global success and concerned the company and Lee family are above the law and influence over almost every corner of society.

Critics particularly note how Lee Kun-Hee’s only son gained immense wealth through unlisted shares of Samsung firms that later went public.

In 2007, a former company lawyer accused Samsung of wrongdoing in a book that became a bestseller in South Korea. Lee Kun-Hee was subsequently indicted on tax evasion and other charges.

Lee resigned as chairman of Samsung Electronics and was convicted and sentenced to a suspended three-year prison term. He received a presidential pardon in 2009 and returned to Samsung’s management in 2010.

 

 

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Nav Canada warns air traffic controllers that job cuts are coming as pandemic crushes revenue – CBC.ca

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Air traffic controllers are being warned that layoffs are coming as Nav Canada pursues a “full restructuring” in response to a revenue slump caused by the COVID-19 pandemic, CBC News has learned.

CBC News has obtained a confidential memo sent internally to air traffic controllers on Thursday. In it, Ben Girard, Nav Canada’s vice-president and chief of operations, told staff that the company has seen a $518 million drop in revenue compared to its budget.

He said he’s been pushing the federal government for help, but — unlike some other countries — Canada has not released an industry-specific bailout package yet.

“We anticipate that until air traffic returns to higher levels, which will not occur until the end of this fiscal year, we will continue to operate in a daily cash negative position and this will be made worse as funding from the [Canadian Emergency Wage Subsidy] program is ratcheted back,” Girard wrote. 

Girard did not say in the memo how many air traffic controllers will lose their jobs or which locations will be affected. The memo said it’s looking to reduce the number of “IFR controllers.” These controllers are higher on the pay scale and work at area control centres in Gander, N.L., Moncton, N.B., Montreal, Winnipeg, Toronto, Edmonton and Vancouver.

The workers are responsible for controlling large amounts of airspace between airports using radar. Their job is to make sure planes keep proper distance from one another.

“I know this is very difficult news to hear. It is also very difficult news to deliver,” Girard wrote. “This is a decision that has been made at my level based on what needs to be done to ensure Nav Canada’s financial sustainability.”

Nav Canada manages millions of kilometres of airspace over Canada and used to provide air navigation services for more than three million flights a year. It’s funded through service fees paid by air carriers.

The Canadian Air Traffic Control Association said it is very concerned with the memo. 

“It is the opinion of this union that safety is not being taken into consideration in making sound decisions,” president Doug Best and executive vice-president Scott Loder wrote in a letter to members.

“Safety is the number one priority for Nav Canada and it has somehow taken a backseat to cost containment as the number one and only priority.”

‘We’re facing years of a downturn in air traffic’

In November, Canadian air traffic was down 54 per cent compared with the same time period in 2019, according to the memo.

“Over the summer and fall months, the outlook for the aviation industry has deteriorated significantly and it has become increasingly clear that we’re facing years of a downturn in air traffic that is much larger and broader in scope than we all initially believed, and will be much deeper and longer than any downturn in the history of the industry,” Girard wrote.

Nav Canada says it is conducting studies of air traffic control towers in Whitehorse, Regina, Fort McMurray in Alberta, Prince George in B.C., and Sault Ste. Marie and Windsor in Ontario that “will result in workforce adjustments.” The company is also looking into closing a control tower in St. Jean, Que.

Nav Canada air traffic controllers were told on Thursday that a workforce adjustment is coming because ‘the aviation industry has deteriorated significantly.’ (Jonathan Hayward/The Canadian Press)

Government ‘pressed’ for help 

The company has been focused on securing liquidity and tapped into the Canada Emergency Wage Subsidy (CEWS) to pay up to 75 per cent of employees’ wages, he wrote. Girard added that these payments are being reduced and will run through December, but Nav Canada isn’t sure if it can continue receiving that wage support.

“While an extension for the CEWS program through June 2021 was recently announced, NAV CANADA’s eligibility is uncertain,” he wrote.

Girard said the federal government has so far failed to come up with a bailout package for the airline sector, despite “significant lobbying.”

Last month, the Globe and Mail reported that the federal cabinet is working on a package for the airline sector that would include low-interest loans. 

Since Sept. 22, Girard wrote, the company has cut more than 700 managers and employees — 14 per cent of its workforce. It also let go of 159 students earlier in the pandemic, he added, and in November cut even more, “leaving just a few in the system.”

Along with the cuts, seven air traffic control towers are being considered for a downgraded level of service, and another 25 sites that are already Flight Service Stations — which provide only advisory services — could face more cuts.

Nav Canada’s board of directors has cut its fees by 20 per cent, and executives and managers have dropped their salaries by up to 10 per cent, Girard wrote.

These cost reductions, as well as access to government support through the wage subsidy program, have saved the company $200 million since March 1, he added. 

“However, that number still pales in comparison to the $518 million reduction in revenues as compared to budget,” Girard wrote.

“Despite these cost-containment efforts, we find ourselves in a situation where we expect our revenues to continue falling far short of our costs for several years, and we continue to require further cost-containment measures and indeed, a full restructuring of our business.

“In an environment where 30 per cent of costs are associated with ‘things’ and 70 per cent of costs are associated with ‘people,’ when all possible cuts with ‘things’ have been done, any further cuts will directly affect people.”

Girard added that he hopes the company can bring back some of the laid-off staff once the pandemic passes.

The Canadian Air Traffic Control Association said it will continue to challenge Nav Canada. The union hopes there will be “enough interest” in departure incentives for older controllers to offer them a package to retire. 

“The views of Nav Canada at this point are violating the vision, mission and overarching objectives of this company,” Best and Loder said in their letter to members.

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Nav Canada warns air traffic controllers that job cuts are coming as pandemic crushes revenue – CBC.ca

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Air traffic controllers are being warned that layoffs are coming as Nav Canada pursues a “full restructuring” in response to a revenue slump caused by the COVID-19 pandemic, CBC News has learned.

CBC News has obtained a confidential memo sent internally to air traffic controllers on Thursday. In it, Ben Girard, Nav Canada’s vice-president and chief of operations, told staff that the company has seen a $518 million drop in revenue compared to its budget.

He said he’s been pushing the federal government for help, but — unlike some other countries — Canada has not released an industry-specific bailout package yet.

“We anticipate that until air traffic returns to higher levels, which will not occur until the end of this fiscal year, we will continue to operate in a daily cash negative position and this will be made worse as funding from the [Canadian Emergency Wage Subsidy] program is ratcheted back,” Girard wrote. 

Girard did not say in the memo how many air traffic controllers will lose their jobs or which locations will be affected. The memo said it’s looking to reduce the number of “IFR controllers.” These controllers are higher on the pay scale and work at area control centres in Gander, N.L., Moncton, N.B., Montreal, Winnipeg, Toronto, Edmonton and Vancouver.

The workers are responsible for controlling large amounts of airspace between airports using radar. Their job is to make sure planes keep proper distance from one another.

“I know this is very difficult news to hear. It is also very difficult news to deliver,” Girard wrote. “This is a decision that has been made at my level based on what needs to be done to ensure Nav Canada’s financial sustainability.”

Nav Canada manages millions of kilometres of airspace over Canada and used to provide air navigation services for more than three million flights a year. It’s funded through service fees paid by air carriers.

The Canadian Air Traffic Control Association said it is very concerned with the memo. 

“It is the opinion of this union that safety is not being taken into consideration in making sound decisions,” president Doug Best and executive vice-president Scott Loder wrote in a letter to members.

“Safety is the number one priority for Nav Canada and it has somehow taken a backseat to cost containment as the number one and only priority.”

‘We’re facing years of a downturn in air traffic’

In November, Canadian air traffic was down 54 per cent compared with the same time period in 2019, according to the memo.

“Over the summer and fall months, the outlook for the aviation industry has deteriorated significantly and it has become increasingly clear that we’re facing years of a downturn in air traffic that is much larger and broader in scope than we all initially believed, and will be much deeper and longer than any downturn in the history of the industry,” Girard wrote.

Nav Canada says it is conducting studies of air traffic control towers in Whitehorse, Regina, Fort McMurray in Alberta, Prince George in B.C., and Sault Ste. Marie and Windsor in Ontario that “will result in workforce adjustments.” The company is also looking into closing a control tower in St. Jean, Que.

Nav Canada air traffic controllers were told on Thursday that a workforce adjustment is coming because ‘the aviation industry has deteriorated significantly.’ (Jonathan Hayward/The Canadian Press)

Government ‘pressed’ for help 

The company has been focused on securing liquidity and tapped into the Canada Emergency Wage Subsidy (CEWS) to pay up to 75 per cent of employees’ wages, he wrote. Girard added that these payments are being reduced and will run through December, but Nav Canada isn’t sure if it can continue receiving that wage support.

“While an extension for the CEWS program through June 2021 was recently announced, NAV CANADA’s eligibility is uncertain,” he wrote.

Girard said the federal government has so far failed to come up with a bailout package for the airline sector, despite “significant lobbying.”

Last month, the Globe and Mail reported that the federal cabinet is working on a package for the airline sector that would include low-interest loans. 

Since Sept. 22, Girard wrote, the company has cut more than 700 managers and employees — 14 per cent of its workforce. It also let go of 159 students earlier in the pandemic, he added, and in November cut even more, “leaving just a few in the system.”

Along with the cuts, seven air traffic control towers are being considered for a downgraded level of service, and another 25 sites that are already Flight Service Stations — which provide only advisory services — could face more cuts.

Nav Canada’s board of directors has cut its fees by 20 per cent, and executives and managers have dropped their salaries by up to 10 per cent, Girard wrote.

These cost reductions, as well as access to government support through the wage subsidy program, have saved the company $200 million since March 1, he added. 

“However, that number still pales in comparison to the $518 million reduction in revenues as compared to budget,” Girard wrote.

“Despite these cost-containment efforts, we find ourselves in a situation where we expect our revenues to continue falling far short of our costs for several years, and we continue to require further cost-containment measures and indeed, a full restructuring of our business.

“In an environment where 30 per cent of costs are associated with ‘things’ and 70 per cent of costs are associated with ‘people,’ when all possible cuts with ‘things’ have been done, any further cuts will directly affect people.”

Girard added that he hopes the company can bring back some of the laid-off staff once the pandemic passes.

The Canadian Air Traffic Control Association said it will continue to challenge Nav Canada. The union hopes there will be “enough interest” in departure incentives for older controllers to offer them a package to retire. 

“The views of Nav Canada at this point are violating the vision, mission and overarching objectives of this company,” Best and Loder said in their letter to members.

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Nav Canada warns air traffic controllers that job cuts are coming as pandemic crushes revenue – CBC.ca

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 on


Air traffic controllers are being warned that layoffs are coming as Nav Canada pursues a “full restructuring” in response to a revenue slump caused by the pandemic, CBC News has learned.

CBC News has obtained a confidential memo sent internally to air traffic controllers today. In it, Ben Girard, Nav Canada’s vice president and chief of operations, told staff that the company has seen a $518 million drop in revenue compared to its budget.

He said he’s been pushing the federal government for help but — unlike some other countries — Canada has not released an industry-specific bailout package yet.

“We anticipate that until air traffic returns to higher levels, which will not occur until the end of this fiscal year, we will continue to operate in a daily cash negative position and this will be made worse as funding from the [Canadian Emergency Wage Subsidy] program is ratcheted back,” Girard wrote. 

Girard did not say in the memo how many air traffic controllers will lose their jobs, or which area control centres will be affected.

“I know this is very difficult news to hear. It is also very difficult news to deliver,” he wrote. “This is a decision that has been made at my level based on what needs to be done to ensure Nav Canada’s financial sustainability.”

‘We’re facing years of a downturn in air traffic’

Nav Canada manages millions of kilometres of airspace over Canada and used to provide air navigation services for more than 3 million flights a year. It’s funded through service fees paid by air carriers.

In November, Canadian air traffic was down 54 per cent compared to the same time period in 2019, according to the memo.

“Over the summer and fall months, the outlook for the aviation industry has deteriorated significantly and it has become increasingly clear that we’re facing years of a downturn in air traffic that is much larger and broader in scope than we all initially believed, and will be much deeper and longer than any downturn in the history of the industry,” wrote Girard.

Nav Canada says it is conducting studies of air traffic control towers in Whitehorse, Regina, Fort McMurray in Alberta, Prince George in B.C., and Sault Ste. Marie and Windsor in Ontario which “will result in workforce adjustments.” The company also is looking into closing a control tower in St. Jean, Quebec.

Nav Canada air traffic controllers were told today a workforce adjustment is coming because “the aviation industry has deteriorated significantly.” (Jonathan Hayward/Canadian Press)

Government ‘pressed’ for help 

The company has been focused on securing liquidity and tapped into the Canadian Emergency Wage Subsidy to pay up 75 per cent of employees wages, he wrote. Girard added these payments are being reduced and will run through December, but Nav Canada isn’t sure if it can continue receiving that wage support.

“While an extension for the CEWS program through June 2021 was recently announced, NAV CANADA’s eligibility is uncertain,” wrote Girard.

Girard said the government has so far failed to come up with a bailout package for the airline sector, despite “significant lobbying.”

Last month, the Globe and Mail reported the federal cabinet is working on a package for the airline sector that would include low-interest loans. 

Since September 22, Girard wrote, the company has cut more than 700 managers and employees — 14 per cent of its workforce. It also let go 159 students earlier in the pandemic, he added, and in November cut even more, “leaving just a few in the system.”

Along with the cuts, seven air traffic control towers are being considered for a downgraded level of service and another 25 sites that are already Flight Service Stations — which provide only advisory services — could face more cuts.

Nav Canada’s board of directors has cut its fees by 20 per cent, and executives and managers have dropped their salaries by up to 10 per cent, Girard wrote.

These cost reductions, and access to government support through the wage subsidy program, have saved the company $200 million since March 1, he added. 

“However, that number still pales in comparison to the $518 million reduction in revenues as compared to budget,” wrote Girard.

“Despite these cost-containment efforts, we find ourselves in a situation where we expect our revenues to continue falling far short of our costs for several years, and we continue to require further cost-containment measures and indeed, a full restructuring of our business.

“In an environment where 30 per cent of costs are associated with ‘things’ and 70 per cent of costs are associated with ‘people’, when all possible cuts with ‘things’ have been done, any further cuts will directly affect people.”

Girard added that he hopes the company can bring back some of the laid-off staff once the pandemic passes.

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