[비즈한국] The sense of crisis within Aekyung Group is escalating following a plane crash involving Jeju Air089590. Jeju Air's stock price has plummeted, and the number of flight reservation cancellations has reached tens of thousands in just a few days. As criticism mounts against Aekyung Group, the parent company of Jeju Air, attention is turning toward the actions of Chairwoman Jang Young-shin, who has built the group over the past 50 years.
Character
Born in Seoul on July 22, 1936, Aekyung Group Chairwoman Jang Young-shin is 89 years old this year. Having spent a wealthy childhood, Chairwoman Jang entered Chestnut Hill College in Philadelphia, USA, in 1955 to major in chemistry. After graduating, she married in 1959 and had three sons and one daughter. She once revealed that while she had planned to continue her studies abroad after college, she decided to marry after yielding to the persistence of her husband, who flew all the way to the U.S. to propose multiple times. Her late husband, Chae Mong-in, the founder of Aekyung Group, was a neighborhood friend she had known since childhood. For the first 10 years of her marriage, she lived as an ordinary housewife. In 1970, when her youngest son, Chae Seung-seok, former CEO of Aekyung Development, was only three days old, her husband passed away from a heart attack, prompting her to take over the company management to make a living.
Chairwoman Jang is known for her boisterous personality and direct way of speaking. Among the foreign firms that trade with Aekyung, she was reportedly called a "tough woman." Gifted at singing, she frequently participated in competitions from a young age, and during college, she was active in a choir, taking on the role of prima donna in opera performances. Her long-standing hobbies include attending concerts and ballet performances. She enjoys learning foreign languages and even studied Chinese after turning seventy. She is known to be an early riser, starting her day at 5:00 AM. She was diagnosed with breast cancer in 2009 but made a full recovery after chemotherapy.
Career
She served as CEO of Aekyung Fats & Oils Industrial in 1972 and ascended to the position of Chairwoman of Aekyung Group in 1985. She became the first chairwoman of the Korea Women Entrepreneurs Association in 1997 and served as vice chair of the Federation of Korean Industries in 1999. In the 2000 16th National Assembly election, she ran as a candidate for the New Millennium Democratic Party in the Guro-eul district of Seoul and was elected. However, she lost her parliamentary seat in 2001 after the Supreme Court ruled her election invalid due to violations of the Public Official Election Act. She has not engaged in political activities since. She has been serving as the chair of the Aekyung Welfare Foundation since 2001 and also holds a position as a board member at the Korea Advanced Institute of Science and Technology (KAIST).
Capability
She is recognized as the first female CEO in Korea. At the time she took over the company after her husband's sudden death, she could barely even read the numbers on documents and often felt intimidated by her employees. Since it was a time when women's social participation was limited, she has stated that she devoted herself entirely to work under the motto "Life is business" to succeed as a female executive.
After her husband's death, as she took charge of Aekyung Fats & Oils, Chairwoman Jang expanded the business from simple soap manufacturing into the chemical industry. When the oil crisis hit just one year after she took responsibility for management, she personally pioneered overseas markets to overcome the crisis. By the end of the 1970s, Aekyung had grown into a representative detergent company in Korea, and in the 1980s, it expanded its products to include toothpaste, cosmetics, and shampoo.
In 1993, she opened Aekyung Department Store in Guro-dong, Guro-gu, Seoul—the site of the old Aekyung factory—and began the retail business. In 2005, she partnered with Jeju Special Self-Governing Province to establish the low-cost carrier (LCC) Jeju Air. Transforming from an ordinary housewife to a business leader, Chairwoman Jang grew Aekyung from a small soap company into the 62nd largest corporate group with 41 affiliates.
Criticism
Aekyung Group had previously lost public trust due to the humidifier disinfectant scandal. In 2011, an incident occurred where consumers who used humidifier disinfectants died or developed lung diseases. This was because the disinfectants contained toxic chemicals. Aekyung was identified as one of the companies that caused the highest number of victims in the humidifier disinfectant crisis and was rebuked as a "murderous corporation."
The fact that it took eight years after the incident occurred for the company to offer an official apology to the victims was also a source of controversy. In 2019, Chae Dong-seok, Chairwoman Jang's second son and Vice Chairman/CEO of Aekyung Industrial018250, attended a hearing to uncover the truth behind the humidifier disinfectant tragedy and apologized to the victims. Lawsuits related to the disinfectants are still ongoing to this day.
Recently, the Jeju Air plane crash has caused Aekyung Group’s credibility to plummet significantly. On December 29 of last year, a Jeju Air passenger plane traveling from Bangkok, Thailand, to Muan Airport in South Jeolla Province attempted a belly landing, collided with localizer-related facilities outside the runway, and exploded. The accident resulted in the deaths of 179 out of the 181 people on board, including the crew. Eleven hours after the accident, AK Holdings, the holding company of Aekyung Group, issued a public apology in the names of the Chairwoman and the staff. Chae Hyung-seok, the eldest son of Chairwoman Jang and Vice Chairman of Aekyung Group, also visited Muan Airport to apologize to the bereaved families in person. However, negative sentiment toward Aekyung Group, the parent company of Jeju Air, continues to grow.
Challenges
It is assessed that Aekyung Group is facing its greatest crisis since its founding due to the Jeju Air plane crash. Jeju Air has been considered the "cash cow" of Aekyung Group, generating the highest revenue among all its affiliates. However, since the crash, Jeju Air's stock price has plunged, and flight cancellation requests are pouring in. The number of Jeju Air flight cancellations received between the day of the crash, December 29, and December 30, reached approximately 68,000. With group subsidiaries such as Aekyung Chemical and AK Plaza already experiencing management difficulties, there is growing anticipation that continued poor performance at Jeju Air will deal a fatal blow to the group's profit structure.
The corporate image has also suffered a serious blow. As issues regarding Aekyung Group's reliability are raised and the humidifier disinfectant tragedy is brought back into the spotlight, there are even signs of a boycott against Aekyung products. Although Chairwoman Jang released a public apology pledging to do her utmost to handle the aftermath of the accident and support the bereaved families, public sentiment remains icy.