LG Turning Crisis into Opportunity

LG Electronics, a global leader and technology innovator in consumer electronics, has announced its long-term business plan and strategy to succeed in the current business environment.

In order to maintain product leadership and increase market competitiveness, LGE CEO Yong Nam confirmed that the company would not reduce - and could even increase - its investment in R&D, marketing, branding and design.

Recession and Beyond

The company has intensified its efforts to increase market share despite the volatile economic situation. To achieve this, LG has reorganized its business portfolio to focus on areas with longer-term growth potential and profitability. Partnerships will continue to be a key element of the companys marketing activities to elevate its brand position.

LG will continue to invest in future growth engines such as solar power, commercial air conditioners and business (B2B) solutions, all sectors LG expects will expand and become increasingly profitable once the economy is back on track.

Crisis War Room

At the end of 2008, LG Electronics established a Crisis War Room (CWR) to bring together LGs five business units, eight regional headquarters and executives to implement and manage the companys aggressive business plan. In just three short months the CWR -- with the collaboration of each of the companys business units and company divisions such as supply chain management, marketing, procurement, human resources and finance -- has identified and developed 11 key action items. Business units have been instructed to establish task force teams to take responsibility for managing the cost-saving initiatives.

Saving Costs

LG is targeting a reduction in expenses of KRW 3 trillion in 2009. This company-wide initiative, which includes headquarters and all 82 subsidiaries around the world, also applies to manufacturing and indirect costs.

Globally, LG has been working to further improve its procurement system, which includes everything from raw materials to investment in facilities, financial services and recruitment. LGs efforts to improve its cash flow has already resulted in reduced inventory, increased liquidity, optimized supply chain management and a more consolidated, efficient purchasing process overall.

Global Standard

To cement its position as a global company, LG will continue to direct significant resources toward improving standards to global organizational levels. Efforts currently underway include improving its HR system, reorganizing business portfolios, focusing on customer-centric processes, recruiting and retaining global talent, eliminating unnecessary costs and continuing to foster technology and design innovations. LG now has non-Korean executives occupying five of its seven highest positions and has recruited approximately 200 other professionals around the world to oversee marketing, supply chain and procurement.

About LG Electronics

LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, home appliances and mobile communications, employing more than 82,000 people working in 114 operations including 82 subsidiaries around the world. With 2007 global sales of USD 44 billion, LG is comprised of four business units - Mobile Communications, Digital Appliance, Digital Display and Digital Media. LG is the world's leading producer of mobile handsets, flat panel TVs, air conditioners, front-loading washing machines, optical storage products, DVD players and home theater systems. For more information, please visit www.lge.com.

Source: LGE