LG (1999)
LG Group from Hoover's Company Profiles:
Both Lucky and Goldstar benefited from the "chaebols'" cozy relationship with President Park Chung Hee's government (1962-79) and used plentiful loans from Korean banks to diversify into everything from energy to semiconductors to insurance.
Although revenue from electronic products grew rapidly, Goldstar's inefficient organizational structure slowed progress, and in 1984 archrival Samsung finally outdid Goldstar. In the late 1980s Goldstar suffered from rising wage rates, labor unrest, and Korean currency appreciation, but its sales rebounded in 1990. It acquired 5% of US television maker Zenith in 1991, including limited rights to Zenith's flat-screen and high-definition TV technology (for sales in Korea). Goldstar merged with sister Goldstar Electronic Devices, which made parts, in 1992. That year, to increase overseas competitiveness and cut R&D costs, Goldstar and Samsung signed a patent-sharing agreement.
Due to TV dumping on the US market by Daewoo, LGE and other Asian manufacturers, the terms of NAFTA called for stiff tariffs to be imposed on TV picture tubes larger than 18", produced outside the US, Mexico and Canada. LG had a difficult time entering the US TV market and was able to obtain only a little more than 1% market share, while Zenith had a 12% market share.
LGE and LG Semicon purchased 54.9% of Zenith’s common shares at a purchase price of $10 per share in 1995 and assumed majority control on November 11, 1995.
In April 1999. LGE bought LG Semicons' shares of Zenith stock.
LG has earned a reputation as a corporate "outlaw". Neither U.S. nor Korean laws have stopped LG in its quest to "win at all costs". Examples of recent, alleged, LG corporate fraud:LG has been sued in US Federal District Court in Delaware by Siemens AG, accusing LG of illegally using some of Siemens' patented chip technology. Siemens contends that LG misappropriated inventions covered by seven U.S. patents issued to Siemens involving DRAM chips.
The United States, initiated, in August 1998, anti-dumping duties on DRAM chips sold in the American market by LG. The dumping margins handed down by the U.S. Commerce Department were 9.23 percent for DRAM chips from LG.
The US Federal Trade Commission has asked Korea's Fair Trade Commission about the possibility of collusion among LG, Samsung and Hyundai.
Former Vice chairman LG Telecom, Chung Jang-ho, of LG Telecom is involved in a bribery scandal involving former vice Information and Communication Minister Chung Hong-shik. Chung Hong-shik is on trial for accepting 20 million won in bribes from Chung Jang-ho of LG in connection with the issuance of PCS (personal communications service) licenses.
LG, in 1998, was one of several chaebol fined a collective $93 million for illegally funneling money to ailing subsidiaries.