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LG announced on Monday (5) that it will end operations in the cell phone market. The measure should directly impact the Taubate, in the interior of São Paulo, the only one of the South Korean company in Brazil focused on the production of smartphones. The unit, which also produces monitors, has around 1,000 employees. Of this total, 400 are allocated in the cellular area.
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The production of monitors in Taubaté should not be affected by the measure. The announcement of this Monday should also not affect the other factory that LG maintains in the country, which is in Manaus (AM) and produces air conditioners, refrigerators and other appliances for the so-called white line.
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With the announcement this Monday, LG becomes the first major company that produces cell phones to withdraw from this market.
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LG announces closure of worldwide operations in the cell phone market
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The South Korean says that the end of operations was defined after successive losses in the area. Before, the company had tried to sell the entire sector, but unsuccessfully opted to close its activities.
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“Since the second half of 2015, our global mobile business has suffered an operating loss for 23 consecutive quarters, resulting in an accumulated accumulation of approximately 4.1 billion dollars (US) [em perdas] by the end of 2020, “LG said in a statement.
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Workers in the cell phone division at the Taubaté factory approved a strike status on March 26. They seek negotiation with the company in the face of uncertainties.
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TV Vanguarda, an affiliate of TV Globo in the Vale do Paraíba region, contacted LG to ask what the future of the factory workers should be, but had not received a response until around 8:30 am.
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In January, another multinational that operates in the country made an announcement that should impact the Brazilian economy and cause job losses, also with a direct impact in Taubaté.
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The automaker Ford announced that it will end vehicle production at its factories in Brazil in 2021 (see video below). In all, 5,000 jobs are expected to be affected in Taubaté, Camaçari (BA) and Horizonte (CE).
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- Ford exit should generate loss of 119 thousand jobs, says Dieese
- Why does Ford invest in Argentina while closing factories in Brazil?
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5 points: Ford ends production in Brazil
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Failure in sales negotiations
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LG’s future has been speculated by the international press since the beginning of the year. In February, a news carried by the newspaper “The Korea Times” reported that LG had started negotiations for the sale of the brand’s global handset production.
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However, in late March Bloomberg reported that after negotiations with a German and a Vietnamese company failed, the South Korean company would close the sector instead of selling it.
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Wanted by G1, the Taubaté Metalworkers Union said the company did not report on the impact of the decision on workers and the Taubaté plant.
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The union said it has a meeting scheduled with the management this Tuesday (6). He also reinforced that he has been seeking meetings with the company since January, but was not served.
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Market presence dropped from 4.1% to 1.6%
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According to the Statcounter website, which measures the share of brands in the cell phone market, LG currently has a 6.5% share of the smartphone market in Brazil and 1.6% in the global market, where it has already registered 4, 1% in 2014. In Brazil, it reached 16.1% of the market in 2013.
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See more news from the Paraíba Valley and the Bragantine region
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