LG chairman sounds alarm over rise of Chinese rivals

LG Group Chairman Koo Kwang-mo, left, attends a Korea-U.S. Business Roundtable in Washington, D.C., Aug. 26. Yonhap

LG Group Chairman Koo Kwang-mo sounded the alarm over aggressive investments by the conglomerate's Chinese rivals, saying LG companies “still have much to do” to strengthen their fundamental competitiveness.

The group said Thursday that Koo made those remarks during a strategy meeting between LG Group CEOs at the conglomerate’s training institute in Icheon, Gyeonggi Province, a day earlier.

The meeting was attended by over 40 top executives of LG Electronics, LG Display, LG Chem, LG Energy Solution, LG Uplus and other affiliates, including their CEOs and chief digital officers overseeing each unit’s artificial intelligence (AI) transformation.

The participants shared their views on the increasingly challenging business environment and held in-depth discussions on ways to accelerate AI transformation as a way to overcome challenges, LG Group said.

“Chinese competitors are making capital and human resource investments three to four times greater than ours,” Koo said.

“Based on our shared view of the need to enhance fundamental competitiveness, we have been working on strategic selection and concentration in business, R&D for distinctive competitiveness and structural improvements in profitability, but we still have much to do.”

Koo has been urging action to enhance the group’s overall competitiveness during CEO meetings in March and June, using terms such as “survival” and “golden time."

LG Electronics ended its electric vehicle charger business in April, reallocating its resources to its heating, ventilation and air conditioning business and artificial intelligence. LG Chem also ended its water filter business in May.

Also, LG Electronics has recently launched a company-wide voluntary redundancy program to reduce expenditure, while other key affiliates are putting their resources up for sale to improve profitability.

During Wednesday’s meeting, LG CEOs said the AI transformation will boost productivity and secure cost competitiveness. They agreed that leadership must set clear goals and ensure swift execution to avoid missing critical opportunities for change.

Meanwhile, Chairman Koo said the group’s top executives should pay greater attention to the safety of employees, referring to a U.S. Immigration and Customs Enforcement raid on a battery plant on Sept. 4 in Georgia that is jointly operated by Hyundai Motor and LG Energy Solution.