LG Electronics’ potential plan to discontinue the smartphone business would have ripple effects on jobs in its overseas production bases, persons working for LG outside Korea said.
According to workers assembling LG phones at the company’s Brazil factory, local employees are paying keen attention to the circulating rumors about the Korean vendor’s plans for the struggling phone business.
“The latest reports about LG’s sale of its smartphone business have made us very concerned here,” wrote a dispatched worker who assembles phones for LG in Brazil in a letter to The Korea Herald. “If the rumor is true, there will be many unemployed people here.”
Of a total of 15,000 employees working for LG’s factory in the city of Taubate, some 400 people work for the phone assembly section, the employee explained.
And there are three talent dispatch agencies that have sent more than 400 workers combined for assembling and packaging LG phone products.
“This is causing discomfort in all workers here without knowing if there will be a job or not for them,” the Brazilian employee said.
LG has a bigger manufacturing facility for smartphones in Vietnam, where the Korean company churns out a significant portion of its phone products bound for global markets.
LG CEO Kwon Bong-seok has said the company will maintain the current workforce for the smartphone business in any kind of scenario, as he confirmed in January that the company is mulling measures to restructure the money-losing business.
However, it is not certain how the Korean company would deal with the overseas workforce.
“It’s too early to talk about the workforces, especially those dispatched by contract agencies, since the plan hasn’t been confirmed,” an LG official said.
So far, LG has designated an overseer for sale of the smartphone business, according to financial sources familiar with the matter.
Vietnam’s Vin Group was a strong candidate to take over the Korean firm’s high-tech unit, but the initial talk fell apart recently because the Vietnamese group’s bid price was deemed too low for LG to hand it over, some news reports said.
Recent rumors said LG had initially planned to sell the entire smartphone business including both R&D and production facilities, but has switched to cut out the production part only while keeping the core technology development staff.
By Song Su-hyun (email@example.com