Kwang-mo Koo, Chairman of LG
The leadership of’Selection and Concentration’ of LG Group Chairman Kwang-mo Koo (43), who declared the withdrawal of the smartphone business, has been put to the test. As Chairman Koo’s’future portfolio’ maintenance, which marks his fourth year in office this year, is accelerating, attention is focused on what outcomes it will achieve.
Future portfolio strategy to speed up
Take care of a sluggish business at least once for three or four months
Robot/AI new growth business bold M&A
Preemptive investment in automotive parts such as electrical equipment
“High-speed restructuring of business structure as a young general manager”
According to the business community and LG on the 6th, since Chairman Koo took office in June 2018, the LG Group has built a new growth engine through mergers and acquisitions (M&As) and the launch of joint ventures in nine fields. Instead, it summarized nine non-mainstream and sluggish businesses, including smartphones. 〈Refer to the graphic〉 It is about once every 3-4 months with a scalpel on a major project. There are many evaluations in the business world that “as a young general manager, they are changing their business structure by balancing the amount of sales and acquisitions at an unusually rapid pace.”
The future businesses that Chairman Koo focuses on are robots, electronic components, and artificial intelligence (AI). A month after Koo took office, LG Electronics bought a 33.4% stake in Robostar, an industrial robot company. Robots are a field where all the core technologies of the 4th industrial revolution, such as sensors, autonomous driving, Internet of Things (IoT), and AI, are applied. Just a month later, it acquired ZKW, an Austrian automotive lighting company, for 1.4 trillion won. As it is a large-scale investment that is difficult to proceed without the decision of Chairman Koo, it was evaluated that he showed his will to bet on the automotive electronics business.
In September 2018, LG Chem bought Unisil, an American automotive adhesive company, for 150 billion won. In addition, the company announced that it will establish LG Magnai Powertrain (51% stake) in partnership with Magna International, Canada, the world’s third-largest auto parts maker. Last month, Aluto, a joint venture between LG Electronics and Swiss LookSoft, was launched. The company plans to commercialize infotainment (information + entertainment) and digital cockpit (multi-display) based on’WebOS Auto’, an operating system for vehicles. Through this, LG is preemptively investing in future auto parts that are expected to grow and are highly profitable.
After taking office as LG Chairman Kwang-Mo Koo. Graphic = Reporter Joongang Cha [email protected]
In the field of display, his will is clearly revealed. In April 2019, LG Display liquidated the organic light-emitting diode (OLED) business for lighting. At the same time, LG Chem acquired DuPont’s soluble OLED technology. It is a technology to create a display in a desired shape through inkjet printing on a panel. Thanks to this, LG Chem is able to stand shoulder to shoulder with industry leaders Sumitomo and Merck at the level of technology.
Chairman Koo’s determination led to the liquidation of the LG Electronics fuel cell business, the sale of a 35% stake in LG CNS, the sale of the liquid crystal display (LCD) polarizer business of LG Chem, and the liquidation of the smartphone business. The industry’s view is that the intention of securing human resources for LG Magna, which is scheduled to be launched in July, is also included in closing the smartphone business. LG Magna’s headquarters is currently LG Electronics’ Incheon business site, and about 1,000 employees of this company are planning to move. LG plans to convert and deploy some of the 3,400 smartphone workers.
Chairman Koo emphasized choice and concentration at the regular shareholders’ meeting of LG Corp. held last month. “Last year, LG reorganized its non-core business according to its selection and concentration strategy with its subsidiaries,” he said. “LG has advanced its business portfolio in the direction of strengthening the competitiveness of its main business and growth business.” Regarding the future strategy, he said, “LG will respond quickly to changes, manage risks thoroughly, and continue to challenge ceaselessly.”
Reporter Choi Hyun-joo [email protected]
