LG Electronics to Build Factory for Electric Car Parts in Michigan
August 23 2017 - 10:25PM
Dow Jones News
By Eun-Young Jeong
SEOUL-- LG Electronics Inc. said that it will spend about $25
million to build an electric car-parts factory in the Detroit
suburb of Hazel Park, Mich., as the company seeks new engines of
growth amid losses at its once-lucrative mobile business.
In a statement, LG said Wednesday that 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 for 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 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 the added capacity will be enough
to turn around its sagging vehicle-parts business.
LG's vehicle-components unit has recorded only 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 business
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 23, 2017 22:10 ET (02:10 GMT)
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