LG Electronics is bringing its appliance production prowess to U.S. shores.
The CE and white-goods manufacturer has struck a deal with Tennessee to construct an 829,000-square-foot appliance plant outside the city of Clarksville.
Located on a 310-acre site, the end-to-end facility is expected to go online in the first half of 2019, when it will initially produce top- and front-load washers. LG and its Tennessee hosts expect that production will later be extended to other white-goods categories.
Dan Song, president, LG Home Appliance and Air Solutions Co., and Gov. Bill Haslam seal the deal, as Korea’s trade minister Joo Hyung-hwan, Clarksville Mayor Kim McMillan, and LG Electronics USA CEO William Cho look on.
As the company’s first U.S. appliance plant, the $250 million factory will provide “increased speed to market” and will allow “a more nimble response to changing market dynamics,” LG Electronics USA president/CEO William Cho told TWICE.
The plant will supply the vast majority of washers for the U.S. market soon after startup, and will also produce models for the commercial channel, the company said.
The facility will also create 600 local jobs, supporting the Trump administration’s made-in-America initiative, and could help LG avoid a proposed border adjustment tax (BAT) on imports.
“It is consistent with ‘Buy America, hire America,’ which is the message of the Trump administration,” noted Korea’s minister of trade, industry and energy, Joo Hyung-hwan, who attended yesterday’s announcement at the state capital building in Nashville.
However, discussions with Tennessee – and seven other states – began six years ago, predating the current protectionist climate.
Attending a celebratory reception were, from left, Sam Yazdian, principal of Tennessee tech chain Electronic Express; Clarksville, Tenn., Mayor Kim McMillan; and LG’s North America strategy director John Toohey.
Dan Song, president of the LG Home Appliance and Air Solutions Co., said Tennessee was ultimately chosen for its “excellent business climate, quality workforce and central location for distribution to our U.S. customers.”
Under terms of agreements with the state and local Montgomery County, LG will receive support for construction, infrastructure improvements, job training and veteran recruitment, and incentives from the Tennessee Valley Authority.
“I look forward to building a lasting partnership with LG in the years ahead,” noted Tennessee Gov. Bill Haslam.
LG said the Clarksville facility will perform fabrication and sub-assembly operations, and expects it will be “the world’s most advanced production plant for washing machines” when it’s completed in two years. Construction is expected to begin later this year.
The company will be the third major corporate presence in Clarksville, following Hankook, the Korean tire manufacturer, and Google, which maintains a data center there.
Artist’s rendering of the new Clarksville plant
LG also joins a growing cadre of offshore majap makers who’ve established a manufacturing base in the Southeast, including BSH (New Bern, N.C.); Haier (Camden, S.C. and, of late, Louisville); Electrolux (Augusta, Ga.), and more recently Midea (Louisville, Ky.).
A domestic manufacturing presence should also relieve LG of the anti-dumping duties imposed on it and Samsung by the U.S. Commerce Department for washers made in China, and would preclude any further actions against LG after shifting its laundry production to Vietnam and Thailand.
LG is also investing $300 million in the construction of a new North American headquarters in Englewood Cliffs, N.J., where the company broke ground last month.