April 16, 2024
Industrials
Trump factor pushes Korean manufacturers to contemplate factories in US
[THE INVESTOR] With the upcoming inauguration of the Donald Trump administration on Jan. 20, there are signs among South Korea’s leading manufacturers to speed up their plans on establishing new production facilities in the US.
Companies with flagship products with significant shares in the American market, particularly home appliances, have been facing increased pressure from the incoming US president, who has opened vowed protectionism.
Most recently, Hyundai Motor, the country’s top automaker, on Jan. 17 officially announced a plan to construct a new plant that may produce sport utility vehicles or luxury Genesis vehicles in the US.
LG Electronics is one of the companies mulling a new plant construction plan. All of the company’s home appliance products are currently manufactured in Changwon, South Gyeongsang Province, and Mexico.
“It is true that the level of consideration has been much more heightened internally this week,” a source told The Korea Herald on Wednesday. “The company might make a final decision faster than it has intended as others have started to move.”
LG Electronics CEO Jo Seong-jin had confirmed the company had been considering the possibility for a long time at the Consumer Electronics Show in Las Vegas earlier this month.
He also said a final decision would be made within the first half of this year.
Although the CEO didn’t reveal specific locations, speculations were made that LG’s new manufacturing base is mostly likely to be built in Nashville, Tennessee.
“We have been considering various plans, and the aforementioned location is one of them,” said a spokeswoman at LG. “Due to readjustment of production volumes of worldwide plants, the final decision may take time.”
Some of the production volume at LG’s Mexico and Vietnam plants might be reduced and relocated to a new factory in the US, according to a public relations officer. The company’s Changwon factory may also suffer a blow if it decides to hand over the volume being exported to the US. The decision will depend on tariffs Trump slaps on those foreign goods.
LG’s archrival Samsung Electronics has also been reviewing building a home appliance plant in the country in response to President-elect Trump’s protectionist policies, since North America is the company’s largest home appliance market.
“A higher possibility is that the company could expand production capacity of Dacor plants rather than building a separate one,” a Samsung spokesman said.
Samsung acquired the luxury built-in home appliance brand in the US last September with an aim to increase its presence in the American market.
However, its plan may be postponed due to the Samsung heir’s politically awkward position at the moment.
“We are in a difficult situation to announce such a new investment plan considering the ongoing domestic issue,” he added.
By Song Su-hyun/The Korea Herald (song@heraldcorp.com)
Companies with flagship products with significant shares in the American market, particularly home appliances, have been facing increased pressure from the incoming US president, who has opened vowed protectionism.
Most recently, Hyundai Motor, the country’s top automaker, on Jan. 17 officially announced a plan to construct a new plant that may produce sport utility vehicles or luxury Genesis vehicles in the US.
LG Electronics is one of the companies mulling a new plant construction plan. All of the company’s home appliance products are currently manufactured in Changwon, South Gyeongsang Province, and Mexico.
“It is true that the level of consideration has been much more heightened internally this week,” a source told The Korea Herald on Wednesday. “The company might make a final decision faster than it has intended as others have started to move.”
LG Electronics CEO Jo Seong-jin had confirmed the company had been considering the possibility for a long time at the Consumer Electronics Show in Las Vegas earlier this month.
He also said a final decision would be made within the first half of this year.
Although the CEO didn’t reveal specific locations, speculations were made that LG’s new manufacturing base is mostly likely to be built in Nashville, Tennessee.
“We have been considering various plans, and the aforementioned location is one of them,” said a spokeswoman at LG. “Due to readjustment of production volumes of worldwide plants, the final decision may take time.”
Some of the production volume at LG’s Mexico and Vietnam plants might be reduced and relocated to a new factory in the US, according to a public relations officer. The company’s Changwon factory may also suffer a blow if it decides to hand over the volume being exported to the US. The decision will depend on tariffs Trump slaps on those foreign goods.
LG’s archrival Samsung Electronics has also been reviewing building a home appliance plant in the country in response to President-elect Trump’s protectionist policies, since North America is the company’s largest home appliance market.
“A higher possibility is that the company could expand production capacity of Dacor plants rather than building a separate one,” a Samsung spokesman said.
Samsung acquired the luxury built-in home appliance brand in the US last September with an aim to increase its presence in the American market.
However, its plan may be postponed due to the Samsung heir’s politically awkward position at the moment.
“We are in a difficult situation to announce such a new investment plan considering the ongoing domestic issue,” he added.
By Song Su-hyun/The Korea Herald (song@heraldcorp.com)
