By Lee Min-hyung
LG Electronics has started building its new North American headquarters in the United States, investing some $300 million (343.6 billion won) on the three-year project that the firm believes will generate tens of millions of dollars for the regional economy.
The Seoul-based firm said Wednesday that the building in New Jersey will open at the end of 2019. The move is part of the firm’s bid to maximize efficiency by integrating its scattered offices in the U.S. into the new headquarters.
“The new building is expected to contribute some $26 million annually to the local economy by creating jobs and paying taxes,” an LG Electronics official said. “While building the new headquarters, we also estimate more than 2,000 jobs will be created in the construction industry there.”
The project comes as the protectionist stance of U.S. President Donald Trump is feared to affect Seoul-based technology titans including LG and Samsung. He has urged non-American firms to establish manufacturing facilities in the U.S.
For this reason, LG expects the new headquarters to be a milestone for its expansion there.
The U.S. market is a cash cow for LG Electronics’ overseas businesses, making up some 30 percent of the firm’s total sales abroad as of the end of the third quarter last year. LG’s premium products, including televisions and refrigerators, have driven up its profitability there.
The company’s mobile business is also performing well in the U.S., accounting for 15.7 percent of the U.S. smartphone market in the third quarter, according Strategy Analytics data.
“Backed by our LG SIGNATURE premium built-in kitchen appliances and high-end organic light-emitting-diode (OLED) televisions, the new American headquarters will speed up our plan to achieve a second leap forward in the U.S.,” the official said.
The company also said employees from other LG affiliates, including LG Household & Health Care and LG CNS, will use the new building.
LG Electronics faced opposition getting the project off the ground. The company had to iron out differences with the provincial government and the Rockefeller Foundation over some environmental issues surrounding the building’s location. But last June it won a license after reaching an agreement to protect scenic views of the Hudson River Palisades.
High-ranking officials, including LG Electronics North America CEO William Cho, Bergen County Executive James Tedesco and Larry Rockefeller, an environmental lawyer, attended the groundbreaking ceremony.
Cho said the new headquarters will lay the foundation to make the firm more sustainable.
“Englewood Cliffs has been home to LG in the U.S. for 30 years, and the new world-class headquarters will boost our growth and commitment to being a good corporate citizen focusing on the environment,” he said.