In 1996 the then Welsh office, under conservative rule announced that 6000 new jobs were to be created on a greenfield site near Newport. The £1.2 billion investment by the Korean Company LG (Lucky Goldstar) would be aided by government grants and subsidies in order to help develop the site of its two factory units.
GOING: The Problems
A sudden crash in the TIGER economies of east Asia and the changing market from old cathode ray tube (CRT) televisions to flat screen was to have a major impact. Firstly, the semi-conductor plant which was supposed to generate around 4000 jobs never opened its doors!
Secondly, when the CRT factory finally opened its doors, it would see only 1200 jobs develop out of a promise of 2000 and inevitably this too was to cease production in 2006.
GOING: Early Rumours! 2002
The Welsh Assembly is seeking urgent talks with management from LG Philips to quell fears that the firm could close its Newport plant.
A leaked document received by the union Amicus suggested LG Philips could be reviewing its UK operations, threatening 1,110 jobs in south east Wales. It is rumoured the company could be about to cut its cost base by transferring production of television components from its four UK plants to eastern Europe.
A leaked document received by the union Amicus suggested LG Philips could be reviewing its UK operations, threatening 1,110 jobs in south east Wales. It is rumoured the company could be about to cut its cost base by transferring production of television components from its four UK plants to eastern Europe.
GONE: The end
The LG Philips display factory to close! Read about the article here: http://news.bbc.co.uk/1/hi/wales/3049261.stm
LG plant supplier closes for good!
So why did LG locate in Newport and how did they get permission on a GREENFIELD site?
The locational factors which influenced LG:
1. Markets - 3 hrs from London and only a little further to Europe!
2. Transport links - situated directly within the M4 corridor and the airports of Cardiff and Bristol nearby.
3. Land - the land is greenfield so appealing to developers. The availability of flat land reduces building time and costs. Room for expansion.
4. Labour supply - the university's of South Wales are all within a hour drive and would provide a skilled workforce. The industrial towns of S.Wales also provide a semi-skilled base of workers.
5. Government Incentive/policy - The Welsh Office (now WAG) provide money for foriegn investment that relocates in the deprived South Wales regions.
LG: The MULTINATIONAL
LG is an example of a Multinational Co-orporation (MNC) who, all be it not in Wales, have employees in many countries around the world.
Distribution of LG factories and offices in Europe:
Employees by region graph:
Sales: Today LG is largely concentrating sales on the new flat screen HDTV's and 3D TV's. Sales in its moblie phone market has dropped as the Blackberry and Iphone as hit the shelves thus forcing LG into a rethink over style and functions.
The HD Super Flat TV's developed by LG
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