LG chairman calls for drastic change for sustainability
LG Group chairman Koo Bon-moo speaks during a New Year meeting at the group’s headquarters in Yeouido, Seoul, Monday. / Courtesy of LG Group
By Kim Yoo-chul
LG Group Chairman Koo Bon-moo has urged top management of group affiliates to bolster their presence in the automotive component and energy business that the group has identified as new cash-cows.
“We need to be aware about the rapid rise of new players in businesses in which LG Group affiliates are involved,” he told executives at a New Year’s event at the company’s headquarters in Yeouido, Monday.
“The newcomers are challenging us with new thinking and new ways of implementation. They are changing the rules of the game. What if LG fails to address this? These are real threats.”
His remarks came after key technology units have seen extended losing streaks over the last few years in terms of global share and profits. They were mostly hit by the growing emergence of Chinese rivals.
For example, LG Electronics, the group’s key affiliate and also the world’s No. 2 TV maker, failed to improve profits and sales last year.
This was due to a consumer shift that sapped demand for LG products. It has also led LG’s component affiliates LG Display and LG Innotek to post unimpressive performances last year, LG officials said.
Koo asked the group management to move faster to maintain the firm’s lead over rivals.
“If you see a market potential in automotive parts and energy-related systems, then please don’t hesitate to invest. I will support you,” Koo said.
Given greater market uncertainty, financial risks in emerging economies and low global economic growth, the chairman said LG would overhaul its corporate structure, if necessary, to become adaptive.
Telecom unit CEO urges fundamental change
LG Uplus CEO and Vice Chairman Kwon Young-soo asked employees to join moves toward “fundamental change.”
Mentioning Chinese proverbs, which highlighted steady developments away from conventional thoughts, Kwon said he would directly lead the way to lay the groundwork for LG Uplus to break up the decades-long “5:3:2” market order.
SK Telecom is market leader with 50 percent, followed by KT with 30 percent and the remainder going to LG.
“You want to become the No. 1 player ― unfortunately, there is a long way to go,” Kwon said in his address to employees. “Without fundamental change, I can say it’s impossible to achieve this ambitious goal.”
The executive, a former LG Display CEO and president of LG Chem, called for quick execution, implementation and preparedness.
“Amid challenging situations, you can’t do it all,” he said. “Please find out core values and core points and which business models can help LG Uplus differentiate itself from others.
“You also should find out what markets and consumers want.”
The CEO will fly to Barcelona, Spain, in February to participate in the Mobile World Congress (MWC) fair to seek out business opportunities.