LG Problem

The chief executive of South Korea’s LG Display, Han

Sang-beom, was determined to deliver a strong message

when he appeared before 1,000 employees at the firm’s

main manufacturing plant last spring.

So he donned a pair of goggles, picked up a hammer, and

smashed a liquid-crystal display screen to bits.

The symbolism was impossible to miss: LCD panels, the

company’s mainstay for years, were being relegated to the

industrial dustbin. The company’s future would depend on

a newer technology, organic light-emitting diode, or OLED.

“I’ve never seen him do such a thing,” said one company

official who was present. “His performance showed a grim

determination to weather this crisis.”

Yet LG Display’s predicament was in many ways one of its

own making. Less than a year earlier, the company had

showered employees with perks and bonuses as profits

rolled in, driven by the company’s leadership in LCD

screens for TVs, computer monitors and smartphones.

But LG Display had misread the market: Chinese

competitors were coming on strong, and by early this

year prices for LCD screens were plummeting. The fat

profits of 2017 turned into big losses in 2018 - and the

company abruptly announced in July that it would slash

$2.7 billion in capital spending it had planned through 2020.