Columbian Chemicals Korea Human Resource Integration 1999 - 2002

1
Columbian Chemicals KoreaHuman Resource
Integration1999 - 2002
2
Columbian Chemicals Global

• Subsidiary of Phelps Dodge Corp - Phoenix
• CCC Headquarters Marietta, Georgia USA
• CCC Product - Carbon Black
• Employees 1,355
• Manufacturing Facilities
• 5 North America
• 1 South America
• 5 Europe
• 1 Asia
• 2002 Annual Sales 520,000,000

3
Columbian Chemicals Korea

• Company start date February 1, 1999
• 1999 2002
• CCK Employees 94 88
• Contractors 56 35
• Capacity 000 MTs 100 120
• Annual Sales 000 44,000 54,000
• Fixed Cost / MT 86
  40

4
Due Diligence Process 1998

• Understand Korean Business and Social Culture.
• Utilized Prudential Intercultural Training
• Utilized Korean Consultant - Towers Perrine
• Design Company Organization
• Utilized CCC Global Models
• Incorporated Korean Best Practices now in use.
• Staff the Organization
• Retained Key Korean Employees
• Utilized CCC Expertise as Expatriates

5
Integration Priorities

• Understand and Utilize Intercultural Synergies
• Understand the current Organization issues
• Develop Human Resource Strategy
• Communicate to Employees
• CCK Organization Structure and Staffing
• CCK Mission
• CCK Core Values
• CCK On the Job Behaviors
• CCK Key Business Skills
• CCC Global Regulations
• CCC General Business Behaviors

6
Intercultural Synergies

• Reality happens to be like a landscape possessed
  of an infinite number of perspectives all equally
  veracious and authentic. The sole false
  perspective is that which claims to be the only
  one there is.
• ---Jose Ortega y Gasset---

• CCC
• Open Communications and Transparency
• Lean Manufacturing
• Low Level Decision making
• Risk Taking / Outside the Box
• Value of Diversity
• Performance Based Rewards
• Korea
• Loyalty to Organization
• High Education / Training
• Work Process Discipline
• Team Oriented Activities
• World Class Manufacturing
• Data driven decision making

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Organization Issues 1999

• Morale was low due to poor business results
• Weak HR Management in place.
• Employee identification with KKPC Culture.
• Lack of English communications skills
• Lack of western business culture understanding
• Employees fear - resulted in forming Union
• No use of Performance Based Compensation
• Union Employees wages were above Managers due to
  Bonus System
• Technical employees felt they lack career
  development opportunities
• Managers wanted to be differentiated from
  Technical employees.
• Employees expected immediate improvement in
  Salaries and other Benefits.

8
Human Resource Strategy

• Utilize Best Practices from within CCC Global and
  Korea to establish and operate a Value Driven
  World Class Manufacturing Organization

9
HR Integration Actions

• Hire HR Manager with international experience and
  excellent English communications skills.
• Develop Employee Communications Plan.
• Introduce CCC Mission, Core Values, On-the-Job
  Behaviors, Key Business Skills and General
  expectations.
• Revise Work Processes based on New Organization.
• Complete detailed Wage and Benefit Surveys
• Implement Employee Performance Evaluation and
  Development Process
• Implement Employee Performance Based Compensation
  Systems.
• Develop and implement Training Programs

10
CCK Organization
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CCK Mission

• Create Value for our stakeholders by offering a
  compelling value package of products and services
  at competitive costs in an environmentally
  responsible and safe way.

12
CCK Core Values

• Safety
• Quality
• Trust
• Confidence
• Teamwork
• Accountability
• Doing What is Right

13
CCK On the Job Behaviors

• Promote Safety / Work Environment
• Fostering Teamwork
• Being Flexible and Adaptive
• Creating Ownership
• Acting with Integrity
• Fostering Open Communications

14
CCK Key Business Skills

• Using Sound Judgement
• Driving for Results
• Focusing on the Customer
• Investing People
• Knowing the Business
• Being Innovative

15
CCC Key Global Regulations

• Code of Business Ethics
• Non-Discrimination Policy
• Financial Regulations and Controls
• Travel and Entertainment Policy
• QS 9000 Quality Management System
• CCC Safety Policies
• OHSAS 18001 Safety Management System
• ISO 14001 Environmental Management System

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CCC Management Beliefs

• All employees are Responsible and Accountable for
  their Job Performance. Sub-Standard Performance
  will not be accepted.
• Your Career Promotions depends on your
  Performance and Capabilities not your Age,
  Seniority or your Education. This applies to all
  employees.
• Your Career Development Plan is your
  Responsibility.
• Compensation Systems will be Based on
  Performance.
• Management is responsible to ensure work
  atmospheres are enjoyable and based on mutual
  respect for all without any form of harassment or
  discrimination.

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Challenging Events

• Delay in hiring of HR Manager in 1999
• Union Executives in 1999 had no experience
  leading to poor negotiations and Union Chairman
  resignation and removal from Union.
• HR Manager resigned in 2000.
• Disciplinary action against 2nd Union Chairman
  leading to his resignation in 2000.
• 3rd Union Executive Team lack of experience and
  unreasonable requests in 2001 led to 20 day
  strike.
• 2nd HR Manager replaced 2001.
• Management lack of communications to Union prior
  to decision making on new Regulations.

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Lessons Learned

• Hire HR Manager prior to business start and
  ensure they have high levels of Korean common
  sense and Communications skills.
• Spend as much time on HR Performance as you do on
  Operations and Financial Performance.
• Communicate, communicate, communicate then
  communicate some more.
• Quickly implement Supervisory Leadership
  training for all managers.
• Do not underestimate need to consider Korean
  Cultural issues when new HR Regulations are
  implemented. Prepare prior to business start.

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Positive Developments

• 3rd HR Manager hired in 2002 very stabilizing
  force.
• Management Employee Evaluation and Development
  Systems and Performance Based Compensation in
  place since 1999 and working well.
• Year End Bonus for all Employees based on
  Performance criteria.
• Promotion Systems for Management and Technical
  Workers tied to Performance criteria.
• Technical Workers promoted into Management.
• Successful Integration of all Key Global Work
  Processes and Regulations.
• High levels of Communications and Employee
  Participation
• High levels of Trust and Understanding now exist
  between Management and Employees.
• CCK viewed as a Benchmark Company within CCC in
  many areas.