LG reorganizes operations in Mexico, shutting factories

The South Korean company will stop producing mobile phones in Mexico, and consolidate its LCD TV factories there

LG Electronics plans to reorganize its factories in Mexico, closing one LCD TV factory and ending mobile phone production in the nation, the company said late Monday.

The South Korean giant will also close an LCD TV factory in Mexicali by September as it moves LCD TV production to another plant in Reynosa.

LG will completely withdraw from mobile phone production in Mexico, shifting all production to factories in Korea and China, the company said. Its mobile phone factory in Mexicali closed in June.

The company plans to expand production of refrigerators and electric ovens in Monterrey, Mexico, with the addition of gas oven manufacturing by the end of 2009, LG said.

The reorganization will actually increase the number of workers LG has building LCD TVs in Mexico and expand the value of production there, the company said. LG will invest US$100 million in the projects.

Although 500 jobs will be lost when the Mexicali LCD TV plant closes, new assembly lines in Reynosa will require 1,200 new employees, the company said. The Monterrey refrigerator and oven factory will hire 1,300 additional workers as well, LG said in a statement.

LG did not say how many workers at its Mexicali mobile phone factory lost their jobs.

In February, LG announced a plan to cut costs by 3 trillion Korean won (US$2.4 billion) globally in 2009. LG established what it called a "Crisis War Room" at the end of last year to bring together its five business units, regional headquarters and executives to manage the plan.

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