Korean Multinational Giant LG Shuts Down Factory in SP and Lays Off Nearly One Thousand Workers

LG, The Largest Electronics Company In The World, Shuts Down Production And Closes Its Factory In SP, Leaving About 1000 Workers Unemployed

After Ford, another major multinational is closing its doors in SP. After announcing that it has abandoned the production of cell phones in all countries around the world, citing accumulated losses of about US$ 4.1 billion, the South Korean multinational giant LG will also cease its production of notebooks and monitors at its factory in Taubaté, leaving almost a thousand workers unemployed in SP.

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The announcement was made last Tuesday (04/06). LG stated that it will transfer its production lines to Manaus. Only the call center operation will remain in the state of São Paulo. Consequently, the metalworkers’ union estimates that 700 of the current 1,000 LG employees in the region will be laid off.

“The company will transfer the production of notebooks, monitors, and all-in-ones to its Manaus unit, thereby strengthening our commercial competitiveness in TVs, PCs, and monitors”, LG said in a statement. The company further stated that it is negotiating with the Taubaté union to “implement additional compensation to the rights already in effect” for those laid off.

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The Transfer Occurs Due To Tax Exemptions That LG Has In The Manaus Free Zone

To the Taubaté union, the company stated that the decision was made due to having tax benefits in Amazonas and not having the same exemptions in São Paulo. The entity will have new meetings with LG until Friday and seeks to reverse the decision.

“The decision to transfer the notebooks and monitors to Amazonas was made, according to the company, after the São Paulo government decided not to renew the ICMS tax exemption for the sector. The company says it spoke with the (state) government, but there was no solution. Approximately 700 would be laid off”, said the president of the Taubaté metalworkers’ union, Cláudio Batista.

There is an intention to readjust the factory in the city for the production of white goods – but this depends on the end of the pandemic and obtaining tax incentives from the São Paulo government, LG representatives told union representatives.

LG is negotiating with the union a contract termination and the transfer of some workers from São Paulo to Amazonas. New meetings will take place tomorrow, April 9.

The closure of over a thousand job vacancies, with the shutdown of LG’s factory, adds to the halt of automobile manufacturers. A survey conducted by the National Association of Motor Vehicle Manufacturers (Anfavea) reveals that 29 of the 58 vehicle factories installed in the country are idle.