Mon, May 12, 2003 - Page 11 News List

Ex-academic develops a taste for Taiwan Tobacco and Liquor

Morgan Hwang, former director of National Taipei University's Business School, became the first chairman of the Taiwan Tobacco and Liquor Corp after the state-run monopoly was corporatized last July. Hwang talked with `Taipei Times' staff reporter Kevin Chen recently about his plans to restructure the company

By Kevin Chen  /  STAFF REPORTER

Taiwan Tobacco and Liquor Corp chairman Morgan Hwang is working to change the way the former monopoly and its employees work and think by adding private-sector business strategies to the corporate brew.

PHOTO: CHIANG YING-YING, TAIPEI TIMES

Taipei Times: Is it difficult for you, a business professor, to shift gears from academics to managing a state-run company?

Morgan Hwang (黃營杉): I have been in this position for more than six months, and to be honest, the job is a bit easier than I originally thought. Basically the quality of employees here is good. What they are lacking is marketing and planning experience, and that's where I can offer my expertise. In the past, many chairmen of state-run enterprises were appointed based on political considerations. While they might have had a reputation in their prospective area, they were generally lacking managerial skills.

TT: Market watchers were also concerned about your qualifications, saying you had no experience in managing a company. What's your response to those charges?

Hwang: Many people did question my ability, saying I don't have much real market experience. But I started out my career as a salesperson for Sampo Co (聲寶) and stayed there for 11 years before I left it as a vice president at its US affiliate. I served as general manager at China Color Printing Co (中華彩色印刷) for seven years and executive manager for Yeu Tyan Machinery Manufacture Co (羽田機 械) for another two. I have 32 years' experience teaching and 21 years' overlapping experience in the private sector. So, saying I have no experience in the private sector is not true.

TT: How long is your contract with Taiwan Tobacco and Liquor Corp?

Hwang: Three years. But since Vice Minister of Finance Sam Wang (王得山) served as acting chairman for three months before I came in, I only have 33 months left to serve on the job [laughs].

TT: As the head of a government-controlled business with NT$65 billion in annual sales and a 7,000-strong workforce, how do you plan to help the company stay competitive in the market?

Hwang: First, we have to improve profit margins and sales volume. But the key is to restructure the company. We have four business divisions -- wine, beer, tobacco and distribution -- and are mulling the addition of marketing or biotech divisions. Everyone knows that our organization is both old and problematic. I haven't made big restructuring changes so far, but I will patiently deal with problems.

Actually, I have a different definition of the efficiency of state-owned enterprises, as they are also part of administrative agencies which are required to achieve multiple goals. Unlike private companies focusing solely on profits, state-run companies have to perform under a bureaucratic system.

TT: Any plan to cut surplus workers to improve efficiency?

Hwang: I have no plan to do so for now. To be frank, as chairman of a state-run company, I'm not here to lay-off people and increase unemployment. On the other hand, most of our employees have been working in the bureaucratic system for years and are just in the first year of adjusting themselves to a new corporate culture. Realistically, I will watch their performance over the first year-and-half and do what I'm supposed to do, if necessary.

TT: How high is your overhead?

Hwang: Our overhead is very high, between 30 and 40 percent of our sales. Believe it or not, about 200 employees have annual salaries over NT$2 million each. But our high personnel costs weren't a problem created overnight. It is a traditional problem and cannot be resolved simply by reducing their salaries. Under the law, we can't cut employee salaries as long as we are making a profit. Therefore, I am thinking of assigning more work to employees and expect them to deliver more.

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