“Please work on the job you were continuing to do at your current location.”
It was reported on the 16th that LG Electronics, which is reviewing the entire mobile business including smartphones, has recently delivered such a message to employees inside the Mobile Communication (MC) division.
■ What is the message of “Keep doing what you were doing” LG Electronics announced on January 20 that it is reviewing its mobile business with all possibilities open after the rumors of the withdrawal of the smartphone business from the end of last year.
At that time, LG Electronics President Bong-Seok Kwon told the members of the headquarters through an e-mail, “LG Electronics has reached the point where it is necessary to make the best choice by calmly judging its current and future competitiveness in the mobile business When it is decided, we plan to share it quickly and transparently with the members.”
After that, public interest poured into what was the’best choice’ that Kwon mentioned. LG Electronics has officially mentioned that it means all possibilities such as business sale, withdrawal, and reduction operations. According to the investment banking (IB) industry, LG Electronics has been negotiating with Vietnam’s Vingroup to sell its local production plant, and it is known that it has been conducting various negotiations, including split sale, such as overseas goodwill and intellectual property rights.
Therefore, the internal message “Continue what you were doing at your current location” means that the transfer of personnel to other departments or transfer arrangements are not scheduled for the time being. It is interpreted as the meaning of trying to find another exit while maintaining.
Most of all, it is observed that they have not found suitable candidates for the sale or are having various difficulties in organizing the business, such as sale prices and options. LG Electronics has a shareholders’ meeting on the 24th of next week and LG Corp. on the 26th.
■ The fate of the LG phone business= The MC business division posted an operating loss for 23 consecutive quarters from 2015 to last year. The cumulative loss amounted to about 5 trillion won (4.7 trillion won). If LG Electronics was operated as a single division, it would be difficult to maintain the business. It must be said that the money earned from H&A and HE has endured so far. From the point of view of having to make a profit, it is correct to fold. However, there is a great regret about the future value of smartphones. Smartphone is one of the few mass products among IT devices. Everyone in the world carries one one with them all day long. Still, about 1.3 billion to 1.4 billion smartphones are sold a year. As the IT infrastructure in emerging markets such as India and Africa develops, it is expected to continue to expand. If the group’s willingness to internalize mobile technology and go all-in in the automotive parts business such as future cars is clear, it is highly likely to close the business. The prevailing outlook is that it will be difficult to maintain the current system no matter how the suspension of top management, such as business sale, withdrawal, and reduction of operation, is gathered.
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■ What’s going on with the rollable phone= On release It has been confirmed that the project of LG Electronics’ rollable smartphone’LG Rollable’, which has been highly anticipated, has been temporarily suspended. LG Electronics has been cooperating with Chinese panel maker BOE, but it is known that it is experiencing difficulties due to the technical problem of the flexible display. It is reported that it is currently testing DPP products internally. It is still unclear whether LG Electronics will start mass production by further improving BOE’s flexible display. The launch of general new products is also expected to be difficult until the first half of the year. It is expected that the start-up will take place only after the operation direction of the MC division’s mobile business is confirmed.
■ Status of LG Electronics MC Business Division= According to the 2020 Business Report, the number of LG Electronics employees (excluding fixed-term workers) totaled 38,883. Of these, the MC division’s workforce is 3,719, which is about 9.5% of the total workforce. It is the second largest after the H&A business division (1283 people) and the VS business division (4,390 people). The number of personnel in the MC business division was in the past 5,000 to 6,000. From two to three years ago, the number of manpower has been cut in half due to the transfer and transfer of other departments through improvement of the constitution.