Headquarters Executives and Overseas Representatives Gather in One Place
Seeking Breakthroughs Amid Tariff Risks and Intensifying Chinese Competition
AX Execution Roadmap Unveiled: Will It Become a New Growth Engine?
Ryu Jaecheol, Chief Executive Officer (CEO) of LG Electronics, presided over his first expanded management meeting since taking office and called for "crisis response." While the meeting was intended to prepare for tariff burdens and intensifying competition from Chinese companies, it is also interpreted as a move to instill a sense of urgency within the organization.
According to the industry on December 19, CEO Ryu held a closed-door expanded management meeting at an LG Electronics business site on this day to review countermeasures against global management uncertainties. He identified the prolonged risk of tariffs, particularly those centered on the United States, and the increasing low-price offensive from Chinese companies as major variables, and examined their impact on each business division.
During the meeting, participants discussed portfolio adjustments focused on premium products and price strategy restructuring in response to intensifying price competition in key markets. They also reviewed profitability defense scenarios centered on reducing fixed costs and cutting expenses in preparation for a potential prolonged demand slowdown. In addition, the meeting addressed adjusting regional production ratios and reorganizing the supply chain to mitigate the risk of performance fluctuations due to increased exchange rate volatility.
The expanded management meeting is a venue where LG Electronics' domestic and overseas executives review business status and strategic direction. It is held in the first and second halves of each year under the leadership of the CEO. This meeting was attended by more than 300 executives from headquarters, business divisions, and overseas regional representatives, both in person and online. Overseas representatives are expected to share changes in business environments in each market and region, discuss corresponding execution strategies, and review tasks to improve efficiency across operations including production, logistics, and inventory.
CEO Ryu's emphasis on "crisis" at his first expanded management meeting is seen as an intention not only to address market conditions but also to inject a sense of urgency into the organization. Both inside and outside the company, CEO Ryu is regarded as a leader with strong execution capabilities. For business execution, it is necessary to enhance drive, and it is believed that establishing an organization capable of operating seamlessly is the first step. In fact, he has been praised for responding swiftly to tariff uncertainties, sustaining growth despite tariff impacts, and making quick investment decisions to reorganize production locations and following through with execution.
Market conditions remain challenging. The global TV market is in a slump, and the offensive from Chinese companies continues, leading to deteriorating profitability in the core TV business. The Media Entertainment Solutions (MS) division recorded significant losses in both the second and third quarters of this year. Next year, the company is expected to continue facing external pressures such as prolonged demand slowdown, ongoing U.S. tariff uncertainties, and rising exchange rates.
LG Electronics is placing emphasis on "operational efficiency." Although the home appliance industry was hit hard by tariff policy uncertainties this year, the company maintained relatively solid results, contrary to market expectations, through multifaceted responses such as optimizing production locations, raising selling prices, and improving cost structures. As of the third quarter, sales reached the 2 trillion won range, and operating profit was 688.9 billion won, offsetting much of the tariff impact. New businesses such as B2B (business-to-business), subscription services, and advertising and content businesses based on the webOS platform also contributed to defending performance. Cumulative B2B sales through the third quarter of this year amounted to 18.6 trillion won. Under CEO Ryu, a technology management expert who elevated LG Electronics to global leadership in the home appliance sector, business structure improvement and securing new growth engines are expected to continue.
There is also growing interest in whether LG Electronics will further specify its AX (Artificial Intelligence Transformation) strategy. CEO Ryu is reported to have presented an AX execution roadmap at this meeting. This follows LG Group Chairman Koo Kwangmo's emphasis on "accelerating AX" at a recent executive meeting. Immediately after taking office, CEO Ryu upgraded the former DX (Digital Transformation) Center to the AX Center through organizational restructuring and assigned it the role of integrating AI across the entire value chain, including R&D, marketing, and supply chain.
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