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| Kwang-mo Koo Chairman and CEO of LG Co., Ltd. © News1 |
It is expected that the LG Group will sweep up the smartphone business, which has been struggling. Considering the withdrawal of the business, it is evaluated that LG is showing more drastic steps than ever before entering the fourth year of chairman Koo Kwang-mo.
In an e-mail sent to employees on the 20th, Bong-Seok Kwon, president of LG Electronics, one of the core affiliates of the LG Group, said, “No matter how the MC (mobile communication) division’s business operation direction is determined, in principle, the employment of members will be maintained. “He said.
This is followed by reports that LG Electronics will sell its smartphone business, which has been struggling, and this is the first time that LG Electronics has made an official position internally and externally.
In particular, LG Electronics delivered a message from President Kwon to the media on this day, revealing that it’is open to all possibilities’, making it clear that it is considering withdrawing the business.
In order to improve the business structure of the MC business division, LG Electronics has made efforts in recent years to improve the efficiency of resource operations, adjust global production sites, and launch innovative products in recent years, but there is a clear technological gap with Apple and Samsung. I had a hard time. Since the second quarter of 2015, LG Electronics’ MC business division has maintained an operating deficit for 23 consecutive quarters, and the cumulative operating deficit reached 5 trillion won by the end of last year.
On this day, LG Electronics said, “Competition in the mobile business including smartphones in the global market is getting fiercer,” with a message from President Kwon. “LG Electronics is the best choice by calmly judging its current and future competitiveness in the mobile business. We believe that we have reached the point where we need to do this. We are carefully reviewing the direction of business operation with all possibilities open now.” At the same time, LG Electronics said, “When the direction of business operation is decided, we plan to share it transparently and promptly with members.”
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| © News1 |
Recently, some media reported that’LG Electronics has decided to completely close the smartphone business and will announce it soon’ in relation to the smartphone business, which was a chronic deficit. In this regard, LG Electronics took the position of’no work’, but when members of the MC division were shaken, it was reported that it delivered a message in the name of President Kwon Bong-seok.
An official at LG Electronics said, “The only thing that can be revealed at the moment is that we will keep the employees’ employment no matter how the MC business division’s business operation direction is determined. There is nothing to reveal.”
Including the consideration of the withdrawal of the smartphone business, LG Group has been boldly adjusting its business portfolio recently, focusing on major affiliates such as electronics and chemicals.
Last month, LG Electronics announced a plan to establish’LG Magna ePowertrain’, a joint venture for electric vehicle powertrain, with the goal of launching in July next year in partnership with Magna International, Canada, the world’s third-largest auto parts maker. In line with the electric vehicle era, LG Electronics will reinforce its electrical equipment business, and it is interpreted that it is an investment aimed at’Apple Car’, which is heating up the market recently.
An official in the business community said, “The news of LG Electronics’ establishment of LG Mag or ePowertrain is perceived as’big news’ more than any other news in the business world. It means that LG Group can compete with Hyundai and Kia in the future in the field of future cars. “
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| Hyundai Motor Group Senior Vice Chairman Eui-sun Eui (left) and LG Group CEO Koo Kwang-mo shake hands at the main building of the Ochang Factory (provided by Hyundai Motor Company © News 1 |
In his first greeting after taking office in 2018, LG Group Chairman Koo Kwang-mo has been constantly contemplating discovering future foods, such as recruiting the then CEO of Bain & Company Hong Beom-sik as the head of LG Corp.’s management strategy team, and the establishment of LG Magna is evaluated as one of the fruits. .
The business restructuring, considering the withdrawal of the MC business, reflects Chairman Koo’s will to boldly sort out the businesses that are inferior in competitiveness and preoccupy the future car business.
LG Group’s goal of listing LG Energy Solutions, a battery-specialized company established by the division of LG Chem, as soon as possible within this year, is an example of LG Group’s bold and fast decision-making.
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| Kwang-mo Koo, Chairman of LG Group and Bon-joon Koo, LG Group Advisor © News1 |
At the regular shareholders’ meeting in March, LG Group also faces a change in which the uncle of Chairman Koo Kwang-mo, Koo Bon-joon, leads five companies, including LG International, LG Hausys, Silicon Works, LGMMA, and Pantos, from the LG Group.
LG Corp., a surviving company after the spin-off, plans to focus its capabilities and resources in the fields of electronics, chemicals, and telecommunications services. After taking office as CEO of LG Koo Kwang-mo in 2018, LG reduced non-core businesses such as fuel cells, water treatment, and LCD polarizers according to the’selection and concentration’ strategy of its business portfolio, while reducing growth engines such as batteries, large OLEDs, and automotive electronics. Has been strengthened. When this division is completed, the three-year business restructuring work is expected to end.
A business official said, “The change led by Chairman Kwang-mo Koo, who became the total number at the age of 40, seems to be in earnest.” It seems that we will focus on securing new growth engines.”