LG Koo Kwang-mo Administration Starts 'Relay' Business Report Meetings from Today... What to Watch For?

LG Electronics Kicks Off One-Month Management Performance Report
'Emergency Management and Future Preparation' Accelerate
Regular Personnel Changes Expected by End of November

[Image source=Yonhap News]

[Asia Economy Reporter Han Yeju] "The more difficult the management environment, the more we must not be led by that environment. We must approach the future proactively and actively, and be able to decide the future ourselves" (September 29 President Workshop, Koo Kwang-mo, Chairman of LG Group)

Koo Kwang-mo, Chairman of LG Group, will hold a month-long business report meeting starting with LG Electronics on the 25th. At this meeting, Chairman Koo is expected to review this year's performance and discuss the direction of the future portfolio. As the global economic crisis spreads, there is intense interest from the business community in LG's business report meetings. Analysts also say that Chairman Koo's management leadership, facing the biggest challenge in over four years since his inauguration, is now being put to the test.

According to the business community, Chairman Koo Kwang-mo of LG Group will hold business report meetings with executives of affiliates at the LG Twin Towers in Yeouido, Seoul, from today until late November.

The business report meeting is an annual event held every October to November, where the group head, CEOs of each affiliate, and business division heads gather to review the business performance of the year and discuss next year's business plans. In 2020, the meetings started on October 10, and last year on October 26. It is a forum to discuss strengthening capabilities for future preparation and strategies to enhance competitiveness in core and growth businesses. It is a key strategic meeting for the group and is closely linked to year-end personnel changes and organizational restructuring.

The business report meeting is directly chaired by Chairman Koo. It is conducted in a format that develops ideas through discussion rather than instructions or reports.

This year's first presenter at the business report meeting is expected to be LG Electronics. Due to global market instability, consumer purchasing sentiment has weakened, causing a sharp decline in sales of TVs and home appliances, which are core products of LG Electronics, raising concerns. In fact, LG Electronics' operating profit for the third quarter of this year decreased by more than 300 billion KRW compared to a year ago, excluding a provision of 480 billion KRW related to the GM Bolt recall.

With factors such as the Russia-Ukraine war, supply chain instability, rising raw material prices, and inflation increasing management uncertainty, the future performance outlook for other major affiliates besides LG Electronics is somewhat pessimistic. For example, LG Display's operating loss in the third quarter exceeded 500 billion KRW, widening the deficit compared to the previous quarter. This is why it is expected that Chairman Koo will order the preparation of strong countermeasures at this business report meeting.

After LG Electronics, electronic affiliates such as LG Innotek and LG Display will hold report meetings, followed by other group companies including LG Chem, LG Energy Solution, LG Uplus, and LG Household & Health Care. In particular, LG Energy Solution's battery business is expected to be a major focus at this business report meeting. High attention is expected to be paid to the U.S. Inflation Reduction Act (IRA), which provides tax credit benefits only for North American electric vehicles.

It is also expected that the three key themes emphasized by Chairman Koo?pragmatism, customer value, and future preparation?will be the focus. Intensive discussions are anticipated on strategies to enhance customer value, business restructuring, new business discovery, and strengthening competitiveness in core growth businesses.

There is also interest in whether personnel reshuffling will follow based on the business report meetings. LG has traditionally held board meetings of the holding company and major affiliates in the last week of November to announce personnel changes. Since most affiliate presidents were retained last year based on "renewal within stability," it is speculated that this year changes may be made based on "performance-oriented" principles.

Meanwhile, Chairman Koo has recently been actively expanding his management footprint and demonstrating leadership. In particular, there is a trend of revitalizing and regularizing meetings on-site. The president workshop, which was held online last year, was moved back to an on-site venue this year. In the first half of the year, a strategy report meeting was held, indicating the need to reorganize strategies and review future capabilities for major affiliates or businesses at least once every three years.

On the 17th (local time), he flew directly to the U.S. to visit the first plant of 'Ultium Cells,' a joint venture between LG Energy Solution and GM, located in Lordstown, Ohio. Earlier this month, he also visited LG Energy Solution's plant in Poland to check on local operations. Before this, the last official overseas business trip by Chairman Koo was to Silicon Valley, USA, in April 2019.

This content was produced with the assistance of AI translation services.