SK chief raises need for reverse thinking in using AI

On the 25th, Chey Tae-won, chairman of SK Group, attended the closing ceremony of the ‘2024 Ulsan Forum’ at the Ulsan Exhibition and Convention Center, explaining innovation strategies for Ulsan utilizing technology and culture. (SK Innovation)

Manufacturing companies may transform into companies that train AI and sell it moving forward, according to SK Group Chairman Chey Tae-won.

“Currently, the focus is on how AI can help manufacturing, but thinking from just one perspective makes it difficult to achieve differentiated competitiveness,” Chey said during the 2024 Ulsan Forum held at Ulsan Exhibition & Convention Center in South Korea’s southeastern industrial city on Wednesday.

The forum, held under the theme “Pivoting Ulsan: Shaped by Technology and Culture,” focused on how to integrate AI technology into the manufacturing industry.

Chey highlighted the importance of reverse thinking, noting that while AI is currently seen as a tool for manufacturing innovation, it could become a product that will fundamentally reshape the industry in the future.

SK Group, the country’s second-largest conglomerate, has declared its transition into an AI company, identifying AI as a key technology to drive the conglomerate‘s future.

“AI thrives on data. To make it smarter, it requires vast amounts of data,” Chey said. “Not just individual companies but even large enterprises will struggle to train AI with their own data alone. We need efforts to pool data across entire industrial complexes and use it collectively.”

“If Ulsan builds the necessary infrastructure for AI and collects data from local companies, it will create a competitive AI,” he added. “If we think on a larger scale, incorporating manufacturing data from Yeosu, Incheon, and other regions, the potential is tremendous.”

Chey also suggested leveraging cultural elements to change Ulsan’s image, which is currently associated with factories and industrial complexes.

He proposed a “residence program,” noting that “Ulsan has many oil and petroleum storage tanks. If the city transforms these empty tanks into libraries or builds an opera house, people will definitely come to see them.”

Commenting on the merger between SK innovation Co. and SK E&S Co., Chey said that “we will collaborate comprehensively, from new energy to current energy,” while expressing confidence that the rebalancing process would be successful.

Meanwhile, SK Group is looking to make early executive appointments as part of its emergency management system, according to the group and industry sources on Thursday. The conglomerate plans to conduct its annual executive reshuffle in November 2024, a month earlier than usual and breaking its informal rule of holding these appointments in early December.

Industry insiders saw this move as the conglomerate’s proactive response to address its current management crisis, as well as reflecting the intention of SUPEX Council Chairman Chey Chang-won, who has called for comprehensive reform since taking office in 2023.

The SUPEX Council is SK Group’s highest advisory group.

SK Group has been undergoing an intense rebalancing under Chey’s leadership, including an unusual mid-year CEO change and the sale of subsidiaries. Chey also changed the name of the Expanded Management Meeting, an annual CEO meeting traditionally held in June, to the “Management Strategy Meeting” and unveiled a comprehensive plan for new business investments aimed at restructuring the group’s 219 subsidiaries and improving profitability.

Chey initially called for a reshuffle in early November 2024, but it is expected to take place after the middle of the month due to various internal circumstances, according to the sources. With the unified SK innovation set to be founded in the same month, the group-wide rebalancing is expected to accelerate.

There is a particularly pressing need for the conglomerate to expedite executive appointments to address the ongoing management crisis of its electric vehicle battery subsidiary, SK on Co. SK on, which is facing growing concerns due to the slowdown in the EV market, recently decided to offer voluntary retirement and unpaid leave to its employees. This is the first time the company is resorting to this measure since it was founded in 2021, and forms part of its efforts to cut labor costs and strengthen competitiveness to overcome the current challenge.

The voluntary retirement package targets employees hired before November 2023, offering 50 percent of annual salary and short-term incentives to those who apply. The company is also preparing to explain the situation to employees and prevent unrest.