Choji Consistent SK, going to the end after being emptied for 10 years

Input 2021.03.22 06:00

Nearly two years have passed since the battery dispute between LG Energy Solution and SK Innovation occurred, but it was not finished. As the final judgment of the US International Trade Commission (ITC) came out in February, the prospect that the two companies would reach an agreement was dominant, but the recent conflict between them has been in a deeper atmosphere than before the ruling.

In its ruling, ITC decided to give a grace period so that SK, which supplies batteries to Ford and Volkswagen, can supply products for four and two years, respectively. Even in the recently released ruling, it emphasized that it could not have the ability to develop battery technology within 10 years without LG’s trade secrets. LG insists that SK should pay at least 3 trillion won in compensation. It also pointed out that SK could take over its Georgia plant in the US.

SK insists on a consistently hardline route. LG does not lose and responds face-to-face and continues the fight. Some of the battery industry tilts their heads at SK’s actions while the panse is completely tilted toward LG.

According to the battery industry on the 21st, the amount of settlement money is too large for the reason SK does not bend the hard line. It is said that there was an internal judgment that there was no future of the company itself if SK agreed to the agreement of Sujowon University. The amount of compensation worth 3 trillion won is difficult to earn even if SK has been conducting business in the US battery market for 10 years. If you pay compensation, you can virtually lose money. It is understood as the intention of SK Innovation chief executive Kim Joon, who said that it would be better to make hopes while watching the results of the ongoing lawsuit until the end.

The battery industry is paying attention to the board of directors of SK Innovation, which has carried out the position that if a large amount of compensation is paid to LG, it may be considered a job assignment. At the heart of the board of directors is Kim Jong-hoon, a former head of the bargaining headquarters of the Ministry of Foreign Affairs and Trade.

In the process of concluding the Korea-US Free Trade Agreement (FTA) in December 2010, Chairman Kim has a history of leading the thin ice plate negotiations by confronting the United States with a strong policy of “If we didn’t do an FTA, we couldn’t discuss the beef issue.”

Even in the dispute with LG, Chairman Kim’s disposition is revealed. In a recent interview with a media, he said, “If you can’t run the factory for 10 years, it’s like just quitting the business.” It’s right to fold it,” he stressed.

U.S. President Joe Biden’s exercise of veto is a variable that will lead SK to a lifelong life (he suffered death and barely saved his life). However, since ITC was established in 1916, there have been 6 cases in which the president has exercised veto power, and there have been no cases in which the veto has been exercised in case of infringement of trade secrets. The deadline for exercising the veto is April 11th.

From the perspective of a third party, President Biden’s exercise of his veto might be said to be a bleak hope, but SK has its own certainty. If SK fails to reach an agreement and fails to operate its factories, it will inevitably hurt the economy and jobs in Georgia. This is why President Biden has the expectation that it will not burden the US economy and will pave the way for only the parties to the dispute to settle legal interests in court.

There is also a view that LG recently sent a letter to a federal senator from Georgia to mention the possibility of an acquisition as a kind of “bluffing” (false betting). An official from the battery industry said, “LG will have plans to expand the US battery business as much as the specified production capacity, but if it acquires the SK Georgia plant, it is highly likely that it will withdraw other previously planned investments.” We believe that the economic effect of the investment will be lost, and LG’s acquisition proposal will not be meaningfully accepted,” he explained.

There is also an expectation that the situation will be better than before if the government actively mediates. Under pressure from the government, LG realizes the amount of compensation to make SK’s battery business sustainable, and the picture that SK reluctantly accepts is ideal.

Prime Minister Jeong Sye-gyun, who has consistently spoken about the agreement between the two companies, appeared on the YouTube broadcast’Sampro TV’ on the 7th and urged an agreement between the two companies again. Prime Minister Jung said, “I need to grow the electric vehicle industry and make it a food for the future, but we are not able to deal with each other because of fighting inside.”

According to the battery industry, at the beginning of this year, Prime Minister Chung urged a three-way agreement with LG Chem Vice Chairman Shin Hak-cheol and general president Kim Joon, who are the chief battery litigation officers of the two companies. As the matter becomes urgent, the possibility of more active intervention cannot be ruled out.

An official from SK Innovation said, “ITC’s decision did not fully take into account the impact of the import ban on the public interest, such as the decline in competitiveness of the US battery industry, restrictions on unfair competition in the market, and environmental pollution caused by carbon emissions due to battery supply delays.” ““If LG is damaged due to the infringement of trade secrets, it can be sufficiently relieved in future legal proceedings such as the Delaware Federal Court,” he said.

Reporter Lee Kwang-young [email protected]

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