LG Electronics to Build Factory for Electric Car Parts in Michigan
August 22 2017 - 10:44PM
Dow Jones News
By Eun-Young Jeong
SEOUL-- LG Electronics Inc. said Wednesday that it will spend
about $25 million to build a factory for electric car parts in the
Detroit suburb of Hazel Park, Mich., as the company seeks new
engines of growth while it reels from losses at its once-lucrative
mobile business.
In a statement, LG said its new U.S. plant will produce battery
packs for electric cars. It will expand into other key components
later.
The company began supplying parts to General Motors Co.'s
Chevrolet Bolt EV last year, produced mostly in its South Korea
plant.
For LG, the Michigan plant will be its first vehicle-components
factory in the U.S. The Seoul-based company already has existing
production facilities in five countries, including China, Vietnam
and Brazil.
The new investment, which the company says will create about 300
jobs, comes amid expectations of rapid growth in the U.S.
electric-vehicle market. Research firm IHS Markit projects the
industry will experience annual growth of more than 65% over the
next three years.
But it isn't clear how much of a boost LG will get from its new
U.S. production facility, or if its added capacity will be enough
to turn around its sagging vehicle-parts business.
LG's vehicle-components unit has only recorded one quarter of
profit since it began reporting earnings in 2015, two years after
it was launched. In the first half of this year, the company
recorded an operating loss of 30.9 billion South Korean won ($27.3
million) and sales of 1.76 trillion won.
LG and crosstown rival Samsung Electronics Co. have scrambled to
open more production facilities in the U.S. following the election
of U.S. President Donald Trump, who has called for a reinvigoration
of American manufacturing. In June, Samsung said it would invest
$380 million to expand its home-appliance operations in Newberry,
S.C. In February, LG said it would build a new washing-machine
factory in Tennessee, its first major U.S. plant.
An LG spokesman declined to comment on the expected production
capacity of the new plant.
Write to Eun-Young Jeong at Eun-Young.Jeong@wsj.com
(END) Dow Jones Newswires
August 22, 2017 22:29 ET (02:29 GMT)
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