LG Electronics may close factories: CEO


Mon, Feb 23, 2009 - Page 12

LG Electronics Inc, the world’s third-largest maker of mobile phones, may close some of its factories as the company faces falling revenue and profitability amid the global recession, chief executive officer Nam Yong said.

“We are now in the assessment stage,” Nam told reporters in Dubai yesterday. “No job cuts are expected in Korea.”

LG, which gets more than 70 percent of its revenue from overseas, said earlier this month it planned to reduce costs by 3 trillion won (US$2.2 billion) this year after it unexpectedly posted a record quarterly loss of 671.3 billion won as the global recession damped demand for handsets and televisions.

The company will probably be unprofitable in the current period, Citigroup Inc and JPMorgan Chase & Co said, as the economic slump forces consumers to slow spending on appliances, flat-panel TVs and mobile phones.

Separately, South Korea’s exports rose 0.4 percent to US$17.8 billion in the first 20 days of this month, helped by a weaker won, the Ministry of Knowledge Economy said yesterday in an e-mailed statement.

A weaker won makes South Korean products more competitive, the ministry said. The won has plunged 16 percent so far this year, making it the worst performer among the 10 most-traded Asian currencies outside Japan. Seoul’s exports tumbled by a record 32.8 percent last month, foreshadowing a deepening slump in Asia’s export-driven economies.