It has been a year since LG Group has been under the leadership of Chairman Koo Kwang-mo. Although there were mixed emotions towards a leader who is in his 40s taking control of LG Group, level of expectations towards Chairman Koo has grown even more while level of concerns has diminished. Chairman Koo has attempted many changes since he took the control of LG Group. Finding strong driving forces and separation of subsidiaries still remain as future tasks.
◊Chairman Koo focuses on stabilizing LG Group in his first year as the chairman
Chairman Koo was appointed as the chairman of LG Group after going through a general meeting of shareholders and a board of directors meeting on the 29th of June of last year. As former Chairman Koo Bon-moo passed away, Chairman Koo became the leader of LG Group at the age of 40.
He handled unsettled atmosphere within LG Group and had focused on finding stability with the group. He attended very few outside events during his first year as the chairman and he had focused his time on preparing management strategies. However, he started to expand his strides in management in 2019 by attending outside events.
There have been many changes such as getting rid of minor businesses.
He decided to liquidate LG Pure Cell Systems, which was co-invested by LG Holdings, LG Electronics, and LG CNS to develop next-generation full cells. LG Electronics is currently going through a process of selling Hientech and LG Hitachi Water Solution while LG Display closed down its OLED business for regular lights. LG Innotek is looking into stopping its wireless charging business for Smartphones while LG CNS closed down its American hospital solution business. Fact that LG Electronics stopped producing Smartphones within South Korea and moved its production lines to Vietnam is also a huge change.
In the past year, LG Group’s subsidiaries have focused on improving their major businesses while eliminating minor businesses.
◊Finding future driving forces through increased investments
LG Group has been pushing for reorganization of businesses and securement of future driving forces under the leadership of Chairman Koo. It has been looking for future businesses and technologies through active investments and M&A. It is looking for opportunities in industries of AI, automotive electronic part, robot, and 5G.
Major M&A under the leadership of Chairman Koo was acquisition of CJ HelloVision by LG Uplus. It is expected that LG Group will create synergy through telecommunication and IPTV businesses as it would secure many cable members once acquisition procedure is completed.
In addition to large-scale M&A, LG Group has increased its investments into domestic and foreign startups to secure new technologies in advance. Through ‘LG Technology Ventures’, it has been actively investing into American startups. LG Technology Ventures was established in Silicon Valley to operate $425 million fund that was co-invested by LG Electronics, LG Display, LG Chem, LG Uplus, and LG CNS last year. So far, it has invested into promising startups that specialize in self-driving technology, AI, robot, VR and AR, bio/material, and next-generation display.
◊LG Group to carry out more changes starting from this year
Although LG Group has shown many changes, it is expected that it will start to carry out more changes on full-scale. It is likely that there will be a rapid process of reorganization centered on future LG Group that Chairman Koo is thinking about.
There are changes to how employees work and how LG Group is hiring employees. Chairman Koo has been enjoying having direct conversations and he has been emphasizing on-site management. Chairman Koo’s methods naturally improved a culture where employees must be obedient to orders from above.
Culture of personnel matter that had centered on hiring within the group has been changed as well. LG Group recruited Chief Vice-Chairman Shin Hak-cheol of 3M has the vice-chairman of LG Chem and Department Head Kim Hyung-nam of Hankook Tire’s R&D Headquarters as the leader of LG Corp.’s Automotive Part Team. This is the first time LG hired an outside CEO since 2010. LG also placed executives from global businesses into important posts within the group.
This year’s personnel matters are also drawing eyes. LG Group did not carry many personnel matters in 2018 as it was looking to stabilize the group. However, huge changes are expected to LG Group’s personnel matters this year as it is looking to reorganize the group and push for new businesses.
“Although it seems that LG Group leaned towards more to stability rather than reformation in 2018, number of executives and employees who resigned in 2018 was not low.” said a representative for the financial industry. “It is likely that LG will carry out more personnel matters this year than last year and high management positions will be the biggest variables to LG Group’s personnel matter.”
Staff Reporter Kwon, Keonho | wingh1@etnews.com