LG Elec’s new CEO in US to tackle supply bottleneck issue, study new biz

[Photo provided by LG Electronics Inc.]

LG Electronics Inc.’s new CEO Cho Joo-wan has chosen the United States for his first overseas tour in 2022 to check the worsening supply bottleneck issue and explore new business opportunities with Silicon Valley-based ICT companies.

Cho’s visit to the U.S. was part of LG Electronics’ efforts to survive the current crisis caused by double whammies of the ongoing Covid-19 pandemic and the geopolitical risk from Russia’s invasion of Ukraine, industry sources said Sunday. Before the latest trip to the U.S. early this month, Cho in December last year visited Austria’s automotive lighting systems supplier ZKW that it acquired in 2018. ZKW has been grappling with plunged output due to the production disruption of finished vehicles amid prolonged global chip shortages.

During his visit to the U.S., Cho had discussed the logistics bottleneck issues at major ports with North America employees that has affected the company’s performance since the Covid-19 outbreak. It has led the company’s logistics costs to more than double last year. In the first quarter of this year alone, its financial burden from shipping costs more than doubled from a year ago-period.

The ratio of logistics costs to the company’s total manufacturing costs is estimated to have risen to double digits from single digit, according to industry experts.

Cho also discussed with U.S. employees various measures to cement LG Electronics’ leadership in the global home appliance market where it beat U.S. electronics giant Whirlpool in sales and became the world’s top white goods seller last year. Under Cho’s direction, LG Electronics will enhance its built-in electronics lineups by adding more high-end models beyond the current premium Signature Kitchen Suite and LG Studio lines.

Cho also met with Hiroshi Lockheimer, senior vice president of Google and head of the platform business such as for Android OS and Chrome. Their meeting was to discuss cooperation on new business in automotive software or platforms of LG Electronics that entirely pulled out of the smartphone business last year, industry experts say.

Separately, LG Electronics announced Sunday it has scouted Korean American mechanical engineer and roboticist Dennis Hong as its advisor to strengthen its robotics business. He is a professor at the University of California, Los Angeles and the founding director of the Robotics & Mechanisms Laboratory (RoMeLa) of the Mechanical & Aerospace Engineering Department.

Cho had spearheaded the North American business of LG Electronics for six years before he came to Korea to serve as the chief strategic officer of the headquarters in 2020. He had led LG’s home appliances business in the U.S. since 2014 and headed the North American business and the U.S. operation since 2017.

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