Two brothers leading LGs resurgency
Group owners teaming up for business upturn
By Kim Yoo-chul
At LG Group, the nation’s top-tier conglomerate, the roles of the eldest brother seem to be take care of internal jobs including research while that the younger brother in charge of its flagship is about the group's global businesses.
LG Group Chairman Koo Bon-moo is consistently asking chief executives at its key subsidiaries to foster R&D initiatives via paying rare visits to local manufacturing sites.
His younger brother Bon-joon, who leads LG Electronics, has vigorously inspected facilities outside of the country, according to a top-ranking LG executive.
``The CEO will fly to South America and the United States, respectively, this month to respond to pending issues and check up strategic products there,’’ said the top-ranking LG executive, asking not to be identified, on Monday.
The anonymous executive added that the chief executive has recently returned from his trips to India, Saudi Arabia and Dubai.
``The CEO is directly caring for overseas partners. We’ve already seen some progresses of soothing business concerns involving LG Electronics,’’ he said.
``He flies to overseas at least twice a month since his inauguration last October. We think his proactive works will help the company turn around since such efforts chalk up substantive results.’’
LG Electronics reported a record operating loss for the fourth quarter of 2010 as it suffered serious troubles in catching up with the smartphone trend ruled by Apple and Samsung Electronics.
Bon-joon tried to change things in favor of the Seoul-based company and one of his top priorities seems to remain well aware of the industry trend of the highly-stuffed consumer businesses.
Such philosophy contrasts to the marketing-oriented approach of sacked former LG CEO Nam Yong.
``Situations have been changing. Executives at LG’s R&D center in downtown Seoul directly report to the CEO more than two times per month about the trend in technologies and LG’s current status,’’ the executive said.
``We are being asked to boost the so-called `product leadership,’ which LG formerly lacked. We are trying to listen from grassroots, the approach that we hadn’t embraced for the past few years.’’
LG Electronics is projected to reap 13.5 trillion won sales during the first quarter of this year, while the operating profit during the period is expected to amount to 75 billion won boosted by improvements in handsets and TV margins, according to Kyobo Securities, a local brokerage.
LG Electronics is the world’s second-biggest flat-panel display producer.
Chairman turns to internal issues
LG said in a statement that its chairman Koo has recently visited battery- and solar cell-, and liquid crystal display (LCD) panels for tablet PCs-producing lines in Korea.
``We can say that’s the part of `field management’ initiative of the tycoon. Chairman Koo asked related executives to spend more on research and development (R&D) to secure future revenue streams,’’ LG spokesman Jeong Jeong-wook said.
LG plans to invest a record 4.7 trillion won for R&D this year from 3.7 trillion won a year before because the dearth of the ``global hit’’ items has been deemed as LG’s Achilles’ heel.
Hybrid batteries for electric vehicles (EVs), solar cells and LCD panels for tablet PCs are what LG says is ``next-generation businesses’’ that receive more investment budgets.
LG Chem, which targets to create 3 trillion won from batteries from 2015, has so far secured 10 leading carmakers including General Motors and Ford as its clients.
Amid ``green initiatives’’ by governments, it’s been expected LG Chem to win more battery orders, though an LG Chem spokesman Song Choong-sup only confirmed its additional 1 trillion won investment plan by 2013 for more outputs.
Since late last year, LG Electronics is exporting solar cells produced from its local plant in Gumi, southeastern industrial city, with the annual capacity of 120 megawatts. In solar cells, LG is aiming to reap 3 trillion won in revenues from 2015.
For displays, LG Display is providing customized flat-screens to the world’s leading tablet-PC makers such as Apple of the United States amid an explosive growth in demand.
``LG Display plans to boost the monthly capacity of tablet PC panels to 5 million within this year. Asked by the chairman’s call for the cooperative growth with local suppliers, LG will also give more administrative, financial and technical supports to suppliers,’’ added Jeong of LG.
LG Display trails only Samsung Electronics in the global LCD industry, while the parts-making affiliate LG Innotek is aiming to join the ``top five’’ in component manufacturing over the next few years.