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LG beefs up efforts to comply with Biden's Made in America policies
LG Group Chairman Koo Kwang-mo, left, speaks to Minister of Trade, Industry and Energy Lee Chang-yang, during a banquet at the National Museum of Korea in Seoul to welcome U.S. President Joe Biden to Korea, in this May 21 file photo. Yonhap
By Park Jae-hyuk
By Park Jae-hyuk
LG appears to be making group-wide efforts to keep pace with U.S. President Joe Biden's initiatives to revitalize America's manufacturing industries, which have been more intense ahead of November's midterm elections, according to industry officials, Wednesday.
Earlier this week, LG Group Chairman Koo Kwang-mo reportedly visited the U.S. state of Ohio to tour the No. 1 electric vehicle (EV) battery production line of Ultium Cells, a joint venture between LG Energy Solution (LGES) and General Motors (GM).
Koo is said to have paid a visit on Monday (local time), amid concerns coming from the Korean automotive industry over the U.S. Inflation Reduction Act (IRA). The act provides a tax credit to U.S. consumers who purchase EVs with final assembly in North America. All vehicle battery components must be manufactured or assembled in North America, and their critical minerals sourced from the U.S. or countries that have free trade agreements with the U.S.
According to LGES, the Ultium Cells factory began test production last month.
There was therefore speculation that the LG Group chairman may meet with the U.S. president this month, along with the Ohio governor and the CEO of GM, while holding a ceremony to celebrate the construction of the factory in the Midwestern state.
Biden actually mentioned LG in a White House statement released last week.
Describing the recent decision of LGES and Japan's Honda to build their joint venture's EV battery factory in Ohio as “another win for America and another win for Ohio,” he connected the two Asian companies' investments to his administration's efforts to implement the IRA.
LGES, however, said that nothing has been decided yet regarding the ceremony.
“It is still unclear when the Ultium Cells factory will begin mass production,” an LGES official said.
An LG Group spokesman also declined to confirm the chairman's itinerary, saying that it is confidential.
On Tuesday, LG Chem announced it has decided to acquire a 100-percent stake in Boston-based AVEO Pharmaceuticals for $566 million to expand its commercial footprint to the U.S. and diversify its pipeline with a broad range of oncology therapies.
The Korean firm's announcement was made about a month after Biden signed an executive order to launch a National Biotechnology and Biomanufacturing Initiative.
The executive order, intended to induce pharmaceutical firms to conduct R&D and production in the U.S., has been interpreted widely as an attempt to restrain the growth of China's biotech industry.
Although the measure was expected to have a limited impact on Korea's biotech industry, domestic pharmaceutical firms have recently accelerated their efforts to build manufacturing plants in the U.S. and to acquire American biotech companies.
“From a longer-term perspective, Korean pharmaceutical firms need to follow the global drugmakers considering multi-sourcing strategies, including production in the U.S.,” Shinyoung Securities analyst Choung Yoo-kyung said. “Companies focusing on the development of novel drugs should rethink their strategies for the U.S. market.”
LG Chem, however, denied the speculation that Biden's executive order prompted its decision to take over AVEO, saying that it has prepared for this deal for a long time.