Correction to LG Electronics to Build Factory
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
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 million 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
Corrections & Amplifications
This item was corrected on August 24, 2017 at 0214 GMT to reflect that LG Electronics' vehicle-components unit recorded an operating loss of 30.9 million South Korean won in the first half of this year, not 30.9 billion South Korean won.
LG Electronics' vehicle-components unit recorded an operating loss of 30.9 million South Korean won and sales of 1.76 trillion won in the first half of this year. "LG Electronics to Build Factory for Electric Car Parts in Michigan" at 10:29 p.m. ET, incorrectly attributed the operating loss and sales figures to the company in the seventh paragraph. (Aug. 23)
(END) Dow Jones Newswires
August 23, 2017 22:08 ET (02:08 GMT)