Kim Ssang Su
Don't tell Kim Ssang Su there's no money in white goods anymore. The 58-year-old chief of LG Electronics Inc.'s appliances unit has proved the skeptics wrong. They declared this was a sunset business, particularly in the face of competition from the low-cost Chinese. "No way," says Kim, whose success earned him a promotion earlier this year to vice-chairman and co-CEO of the South Korean consumer-electronics company. "I see double-digit margins for many more years to come."
Kim and his colleagues at LG run one of the most cost-conscious manufacturing operations in Asia. And Kim is trouncing competitors at home and abroad. Sure, LG is trailing local rival Samsung Electronics Co. in cell phones, PCs, and flat-panel TVs. But not in white goods. LG has come from nowhere to rank among the top five in the global home-appliance industry. In air conditioners, LG is No. 1 in 41 countries. Kim's division took in revenues of $5.6 billion last year, more than double its 1998 sales of $2.7 billion. The unit now contributes over half of LG Electronics' profits. Kim's new target: to rise to global No. 3 by 2005, behind Whirlpool Corp. and Electrolux.
Kim's chief weapons in the appliance wars are his "tear-down-and-redesign" teams. Kim introduced them in 1995, when he was chief of LG's main factory for air conditioners and washing machines. The plan, modeled after General Electric Co.'s Six Sigma program, slashed costs by a third in two years. Productivity soared after Kim shortened assembly lines and product development, while defects fell by one-third.
Then came the 1997-98 Asian economic crisis, when the value of the Korean won sank. "That was a huge opportunity for us to beef up price-competitiveness," recalls Kim, who started as an engineer at LG Electronics 33 years ago. Kim's focus now is to strengthen his company's presence in the U.S. and Europe, particularly in high-end segments such as Internet-capable refrigerators and ultraquiet washing machines. Last year, LG started selling air conditioners and washing machines under its own name in the U.S., where it used to build appliances for Whirlpool and GE. If Kim can gain U.S. market share, he may well continue his winning streak.