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LG Electronics gears up for Trump doctrine by building its first U.S. plant for household appliances
Collected
2017.01.06
Distributed
2017.01.09
Source
Go Direct
South Korea’s LG Electronics Inc. has decided to build its first consumer electronics plant in the mainland U.S., in what appears to be a preemptive move against the protectionist industrial policy of the incoming Donald Trump administration under the slogan of “Buy America, Hire America.”

The tech giant confirmed Thursday it is reviewing two candidate plant sites in Nashville or Memphis, Tennessee upon management decision reached in December. Even before moving into the Oval Office, Trump has been bullying U.S. companies with high tariffs and punitive actions for industrial activity outside the U.S. to boost jobs for Americans.

LG Electronics runs household appliance plants in Korea, China, Thailand and Mexico. Its products shipped to the U.S. market are assembled mostly in Korea and Mexico.

According to an internal timeline, the company will complete site selection for the U.S. plant by the end of March 2017 at the latest and construction by the end of June 2019. The plant’s initial production line will likely roll out washing machines first considering the company’s strong market share there and the U.S. government’s high tariffs on imported washing machines. Next on the production line could be refrigerators that usually incur high shipping costs due to bulky volumes. Total investment is estimated to reach up to 200 billion won ($168 million) if it begins with an assembly line for washing machines. The company has also ambitions to place a production hub in the U.S. to cover its full lineup of consumer electronics.

Its Mexican plant, an important outpost for exporting products to North America, will be reassigned to make products geared to Latin American markets. The plan coincides with the already stated intentions that the company will upgrade the outdated Mexican plant built in the 1990s and early 2000s and seek measures to improve productivity.

By Kim Dong-eun, Lee Dong-in

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