LG Innotek to close Pyeongtaek factory

LG Innotek Pyeongtaek factory [Image source: LG Innotek]

South Korea’s LG Innotek Co. announced that it is closing its Pyeongtaek factory, which has been in operation for six years, as part of its efforts to streamline production efficiency.

The company revealed on Thursday that it decided to close the Pyeongtaek plant by the end of 2024, in a move to enhance the competitiveness of its automotive motor business.

Opened in 2018, the Pyeongtaek factory spans an area of 41,167 square meters and has been responsible for manufacturing components such as vehicle transmissions, brakes, and steering motors. Products from this facility are likely to be shifted to alternative production sites, including LG Innotek’s factories in Gwangju, Korea, or Yantai, China.

The decision to close the Pyeongtaek factory appears to be part of LG Innotek’s broader strategy to optimize production efficiency, with the company relocating its camera module production facility from the Yantai factory to its Hai Phong factory in Vietnam earlier. The Yantai factory is also now focusing on the production of motors for vehicles, aligning with LG Innotek’s plans to strategically position its manufacturing capabilities.

A spokesperson from LG Innotek emphasized the company’s commitment to its employees at the Pyeongtaek facility, saying “Ensuring 100 percent job security for the employees at the Pyeongtaek plant is our top priority. We are planning to provide personalized redeployment and tailored support measures that take individual circumstances and demands into account.”

In addition to business efficiency measures, LG Innotek is actively pursuing new business ventures. The company announced a strategic partnership via a stake investment with AOE Optronics, a lens manufacturing company based in Taiwan, on January 4th, 2024, which aims to jointly develop optical components for autonomous driving and extended reality (XR) applications.