By Kim Yoo-chul
Staff reporter
LG Group Chairman Koo Bon-moo is not going after a general reshuffle over its electronics division's dismal performance, group representatives said Thursday.
"Chairman Koo encouraged the executives to do better. It’s not his style to sack his employees over a short-term performance," one of them said.
Koo has just finished an annual one-month-long series of "Consensus Meetings" (CM) with his top executives, and attention was given to his meeting with Nam Yong, the LG Electronics CEO.
LG is expected to suffer a freefall of its quarterly profit during the April-June period mostly due to what analysts say are "smartphone woes."
"I am asking chief executives to work for the long haul. Take some more time to find customized ways to boost competitiveness in businesses," Koo was quoted as saying during the CM.
"The key question is what we should do to guarantee the group's prosperity over the long-term," he said.
LG officials said that Koo's remarks were intended to encourage them to work better so as to regain lost ground in pivotal business areas such as smartphones.
"It was not to upbraid them," the official said.
The chairman asked Nam to spend time on better and fine-tuned strategies to water down market concerns, the group representatives said.
"LG should prepare the future with a long-term view," Koo said.
The remarks come at a time when LG Electronics is not performing well on the smartphone market.
Although LG is the world’s third-biggest handset manufacturer after Nokia of Finland and Samsung Electronics, its global smartphone share is below 1.5 percent.
"It is evident that LG will suffer from operating losses at its phone business in the second quarter. Margins in low-end phones are declining and its smartphone lineup is not competitive," said an analyst at a local brokerage.
LG posted 27.7 billion won in operating profits in the first quarter of 2010.
LG Electronics plans to introduce 10 smartphones in the latter half capitalizing on developed markets to find some momentum in the highly-lucrative and rapidly growing segment.
With the "hardware-driven" strategy, LG plans to invest more to strengthen sales channels in emerging markets.