The chief executive of South Korea’s LG Electronics stepped down yesterday to take responsibility for its loss-making handset business.
LG said in a statement the board accepted Nam Yong’s resignation and appointed Koo Bon-joon, vice chairman of LG International, as his successor. Koo will assume his new role next month.
“At a meeting of the board of directors held Friday, Nam Yong offered to resign as CEO to take responsibility for the slack performance and pave the way for a new CEO to prepare for next year and onward,” the statement said.
Nam, 62, was appointed chief executive of the electronics giant, the world’s third-largest mobile phone maker, in 2007.
Koo, 59, has served as executive officer at many subsidiaries of the LG Group, which is headed by his brother Koo Bon-moo. Both are members of the group’s founding family.
In July LG Electronics reported a 33 percent fall in second-quarter net profit from a year earlier as its handset business lost money for the first time in four years. Prices of its traditional phones fell sharply as customers turned to smartphones instead.
This week LG Electronics rolled out its Optimus One smartphone in an attempt to catch up, and said it is pushing to sell 10 million of them worldwide.
Kiwoom Securities analyst Kim Ji-san told Dow Jones Newswires there were expectations the leadership change could improve the firm’s fortunes.
“LG is in need of internal reform because it was too slow to react to the smartphone market as well as deteriorating performance of its overall handset business,” he said.
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