Accelerating Sales of Plant Sites
As LG Electronics has begun withdrawing from the smartphone business, the company is taking steps to close down production plants in Haiphong of Vietnam, Taubate of Brazil and Qingdao of China. With the decision to give up the smartphone business, the company thought of various ways to utilize the plants but failed to find a breakthrough.
In particular, the Haiphong plant, the largest among LG Electronics' smartphone plants, was at first expected to find a buyer. It has been producing about 10 million smartphones annually, about half of LG’s smartphone output.
However, it was difficult for LG Electronics to find a buyer of the plant because Vietnamese smartphone manufacturers also have production lines and local companies could not afford to pay more than 100 billion won to acquire it. As a result, the company is considering selling the plant site only.
The same goes for the Taubate and Qingdao plants. Since the two factories produce about eight million to nine million smartphones altogether, LG Electronics was expected to have difficulty selling the production lines from the beginning. After a rumor about the sale of the Taubate plant went around at the end of February, executives and employees at the plant have been staging a strike since March 26 due to concerns over their job security.