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LG Electronics is planning to reorganize manufacturing plants and expand investments in Mexico to maximize efficiency and competitiveness.
The company will invest an additional US$100 million over the next three years, increasing total production capacity to $4 billion.
LG Electronics currently operates three manufacturing facilities in Mexico: Reynosa and Mexicali producing TVs and Monterrey making refrigerators and electric ovens. The reorganization program includes:
•Consolidation of LCD TV manufacturing plants -- Two separate plants in Reynosa and Mexicali will be integrated into one consolidated plant in Reynosa to produce mid-large size and premium TVs. Consolidation is expected to be completed by September 2009.
•Outsourcing of small- and medium-size LCD TVs -- LG Electronics plans to expand its collaboration with an external manufacturing partner in Mexico.
•Withdrawal from mobile phone manufacturing in Mexicali -- With the closure of the Mexicali plant in June, handsets for North America will be produced in Korea and China.
•Expansion of Monterrey plant capabilities -- The refrigerator and electric oven manufacturing Monterrey plant will start producing gas ovens by the end of 2009.
•Localization of components -- LG Electronics will source more components in Mexico to gain cost competitiveness.
Planned increases in investment and employment include:
•Increased investment -- LG Electronics plans to invest more than $100 million in Mexico over the next three years.
•Expanded production capacity -- LG will expand production capacity to US$4 billion by 2012, up from $2.6 billion in 2008.
•Additional employment -- Adding new production lines in Reynosa will generate about 1200 new jobs and the Monterrey plant is planning to hire 1300 additional workers.
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