Will Hanon Systems Add 'Technology' to Its Name... Cho Hyun-beom's '10-Year Technology Vision'

Hanon Systems to Change Company Name and Relocate Headquarters
Leading Candidate: 'Korea Innovative Technologies'
Reflecting Chairman Cho Hyun-beom's 'Technology-Focused' Policy
Accelerating Leap to Global High-Tech Group

Hankook & Company Group is reportedly considering changing the name of Hanon Systems, which it recently finalized the acquisition of, to ‘Hankook Innovative Technologies.’ Previously, the group also added ‘Technology’ to the name of its core company, Hankook Tire. This is interpreted as reflecting the management intention of Cho Hyun-beom, chairman of Hankook & Company Group, to leap forward as a global high-tech group.

According to industry sources on the 21st, Hanon Systems will hold an extraordinary general meeting of shareholders in December to discuss various agenda items such as the name change and relocation of its headquarters. Last month, Hankook & Company Group signed the main acquisition contract, confirming Hanon Systems’ incorporation into its affiliates. Once the contract procedures are completed, Hankook Tire Technologies will become the largest shareholder holding 54.7% of Hanon Systems’ shares.

The leading candidate for the new name is ‘Hankook Innovative Technologies.’ According to the Korea Intellectual Property Office’s information system, Hankook & Company already applied for the trademark ‘Hankook Innovative Technologies’ in 2017 and completed registration in 2018.

Exterior of the Korea & Company Group headquarters Techno Plex. Provided by Korea & Company

The background for considering this name change is said to significantly reflect Chairman Cho’s will to become a global high-tech company. Since 2015, when Hankook Tire, together with the private equity fund Han & Company, acquired shares of Hanla Visteon Climate Control (formerly Hanon Systems), Chairman Cho has been envisioning a ‘Mobility Technology Group’ centered on tire, battery, and thermal management system technologies.

In 2019, Hankook Tire Group undertook a major brand overhaul by adding ‘Hankook’ and ‘Technology’ to the names of its holding company and major affiliates. The group’s holding company name changed from Hankook Tire Worldwide to Hankook Technology Group, and Hankook Tire was renamed Hankook Tire & Technology. As part of the preparatory work, Hankook Tire Group also secured the trademark ‘Hankook Innovative Technologies,’ leaving open the possibility of acquiring Hanon Systems in the future and preparing the name in advance as an affiliate.

The word ‘Technology’ is a term that Chairman Cho is particularly attached to. It reflects his usual belief that ‘technology’ is the most important factor to secure independent competitiveness without being subordinated to automakers as a parts supplier. Although the trademark dispute has prevented the use of the name Hankook Technology Group, the core affiliate Hankook Tire maintains the name Hankook Tire & Technology. The group’s headquarters building is named Technoplex, the R&D research center is called Technodome, and the tire test track is named Technoring, applying the keyword ‘technology’ throughout the group.

Cho Hyun-beom, Chairman of Korea & Company. Provided by Korea & Company

Once the acquisition of Hanon Systems is completed within this year, Hankook & Company will enter the top 30 business groups in Korea with assets worth 26 trillion won. The goal is to leap forward as a high-tech electric vehicle company based on tire and vehicle thermal management system businesses. Hankook Tire & Technology has secured technological capabilities in the electric vehicle tire sector, launching the world’s first electric vehicle dedicated tire brand ‘iON.’ Hanon Systems is recognized as the second-largest global player in the air conditioning sector, including battery thermal management systems, electric compressors, and integrated refrigerant and coolant modules.

With an emphasis on ‘Technology,’ attention is also focused on the chemical integration of Hankook & Company and Hanon Systems after the acquisition is completed. Experts judge that aside from being businesses necessary for mobility, there are not many overlapping technological areas. However, there is weight on the possibility of finding synergy through organizational integration. Chairman Cho has appointed Lee Soo-il, vice chairman of Hankook Tire & Technology, as the head of the integration promotion team (PMI) to lead the fusion between the two organizations. Chairman Cho emphasized, “We respect Hanon Systems’ independent business operation method and aim to realize internal integration and achieve sustainable growth by sharing Hankook & Company Group’s management philosophy, culture, and know-how.”

Overcoming the ‘chasm’ of electric vehicles (a temporary demand slowdown before mass adoption) and recovering profitability is also a challenge. Hanon Systems’ operating profit margin, which exceeded 6% until 2019, fell to 2.9% last year. This is because electric vehicle demand did not increase as quickly as expected, and investment and R&D costs have not yet been recovered. In particular, the delay in electrification plans by Ford, one of its major customers, had a significant impact.

A Hankook & Company official said, “We are intensifying integration work, including organizing the Hanon Systems PMI team,” and “We are prioritizing synergy in the business after integration.” However, regarding the name change and headquarters relocation, the official drew a line, saying, “These are matters under discussion and nothing has been decided yet.”