Turn crisis into opportunity

Koo Bon-moo LG Group Chairman

By Kim Yoo-chul

LG Group Chairman Koo Bon-moo has called for top executives to turn crises into opportunities in order to survive in the rapidly-changing economic environment.

He predicted that the group will face tougher challenges down the road, and urged them to become more flexible in order to adapt to changes at home and abroad.

Koo’s sense of urgency was apparent at a two-day meeting of CEOs at its training center in Icheon, Gyeonggi Province which began Wednesday.

“We are in an emergency situation. You should be fully aware that today’s risks could create new business opportunities, tomorrow. We have no time to hesitate. You should move faster,” Koo said during the meeting.

“Scarcity of LG-owned resources shouldn’t be an excuse. In any situation, you should find ways to win. This is the simple principle that I’ve been pursuing,” the chairman said.

Koo’s remarks came a couple of weeks after the chairman stressed the need for faster execution of management decisions in his New Year message to LG employees, while admitting that one of the nation’s leading business conglomerates is in crisis.

LG spokesman Terry Taekyung Lee said the chairman discussed issues that need to be immediately addressed and developed during the meeting with executives, including changes in the global financial market environment, technology innovation and transformation in international politics.

Among the participants were LG Vice Chairman Kang Yu-sik; LG Electronics CEO and Vice Chairman Koo Bon-joon, younger brother of the chairman Koo; LG Uplus Vice Chairman Lee Sang-chul; LG International Vice Chairman Lee Hee-beom; and LG Chem Vice Chairman Park Jin-soo.

The chairman’s sense of urgency emerged because the group’s key affiliates are losing ground in the global markets amid lingering uncertainties and the prolonged economic slump.

LG Electronics, the flagship of the group, fell to fifth position in smartphone sales, pushed aside by ZTE and Huawei Technologies of China.

Company officials said its smartphone business will report operating losses during the fourth quarter of last year because its cash-burning campaign to promote the G2 smartphone in developed markets had little impact.

Deepening business struggles in LG Electronics is directly affecting LG’s other technology affiliates, according to officials.

LG Display, for example, supplied its displays and panels to LG Electronics, the biggest stakeholder with 37.9 percent, with heavy discounts under request by LG Electronics.

Meanwhile, the petrochemical unit LG Chem is collaborating with LG Electronics in various auto component-related business projects because LG Electronics is shifting toward business-to-business (B2B) projects such as producing car components after it saw a steep fall in consumer electronics.

“We are trying to provide substantial help to LG Electronics because we have secured global automakers as clients for our rechargeable batteries. But struggles within LG Electronics is burdening us,” said an official at LG.