UPDATED. 2024-07-19 07:49 (금)
Kwon Bong-Suk, president of LG Electronics, says, "There will be no more restructuring at MC business headquarters."
Kwon Bong-Suk, president of LG Electronics, says, "There will be no more restructuring at MC business headquarters."
  • Jeongeun Park·Stan LEE
  • 승인 2019.02.19 14:38
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The company will proceed with material cost innovation to improve cost structure
Kwon Bong-Suk MC/HE Business Division Head (President).
Kwon Bong-Suk MC/HE Business Division Head (President).

"The personnel restructuring of mobile communications (MC) business headquarters is over."

Kwon Bong-Suk, head of LG Electronics' MC/HE business (president), answered in a press conference on April 15th, "There will be no more restructuring," to a reporter asking, “the number of employees at the MC business division seems to be decreasing continuously.” President Kwon said, "In the past two to three years, we have created a base on which a small number of small people can do what it once took many more people to do. In this process, MC business division personnel have been assigned to the Research Institute under the Chief Technology Officer (CTO) or the VC business headquarters responsible for automobile electric parts business."

According to industry sources, LG Electronics' MC division has reduced its labor force by 10~20% every year by moving them to other business divisions or affiliated companies. His remarks on the day that there is no further restructuring mean that the organization has completed its organizational efficiency efforts. President Kwon said, "Although the restructuring of the workforce is over, we will push for material cost innovation to improve the cost structure." However, to a question asking how LG Electronics would decrease the deficit, President Kwon refused to reply directly by saying that he will discuss it again after the result for the first half of the year is released.

President Kwon has appeared as a "relief pitcher" in the MC business division, which has been in the red for several years. LG Electronics has put Kwon Bong-Suk in charge of MC business division in addition to making him the president of the home entertainment (HE) business division overseeing the TV business at the end of last year. It was unprecedented in the history of LG Electronics to put one person in charge of the two of the three major business divisions including household appliances, TVs, and mobile phones.

There is a background to President Kwon’s double duty. He worked as a product planning group leader (managing director) at the MC business division for two years from 2012 to 2013. At that time, strategic smartphones G2 and G3, which were launched by President Kwon’s lead, were sold 7 million units and 10 million units, respectively, in the global market. However, after he moved to LG in late 2013, LG Electronics' smartphone business took a downward turn. LG Electronics' MC division has been in a deficit for 15 consecutive quarters.

President Kwon will continue to focus on streamlining the overall business’ efficiency. "We are not looking to create a derivative model based on the same model," he said. LG Electronics' MC business division has introduced a derivative model to exhaust parts inventory when sales of flagship models have not been successful in the past few years. The method of 'pushing' the product to telecommunication companies by changing only the model name only created losses. As President Kwon said, more accurate demand forecasting and component procurement strategies are expected to be established to reduce derivative model releases.

Product brand will be the same as before. President Kwon said, "We considered the strategy of changing the brand, but we thought it was better to keep the brand because the customer awareness about G and V series is increasing." The company is trying to preempt the 5G market. President Kwon said, "We decided to launch 5G phones with 3 domestic telecommunication companies and a US telecommunication company. We will make the most stable and complete 5G phone in terms of speed, heat, and power consumption." LG Electronics will unveil its 5G V50 V-Sink on Mobile World Congress (MWC) 2019 to held in Barcelona, ​​Spain on February 24th (local time). It will also release 4G long-term evolution (LTE) strategy phone G8 Thinq and LTE low-to-mid-range phone Q series and K series.

President Kwon said that it is not the time for foldable phones yet. "If you think about the market response and user experience, it seemed that the market is not ready. Thus, foldable phones were removed from the initial release. We'll emphasize the dual display (where the substitute display can be attached/detached by the user’s need) rather than the foldable," he said.

President Kwon emphasized, "From the customer's point of view, we are aware that LG's identity is unclear and product differentiation is insufficient. We will concentrate all our efforts on enhancing real customer value to create the base for our next leap.”

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