Samsung, LG express disappointment in US ITC's remark on washers

Tech October 07, 2017 07:00

By The Korea Herald/ANN

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South Korea's top tech giants Samsung Electronics Co. and LG Electronics Inc. on Friday expressed disappointment in the US International Trade Commission's (ITC) announcement that they are having an adverse impact on its washer industry.

On Thursday (US time), the ITC claimed the two South Korean firms' washing machines made in foreign countries were harming the US industry. The trade body announced the result of its four-month investigation prompted by a safeguard petition Whirlpool Corp. filed May 31 against Samsung and LG.

Samsung and LG claimed that the ITC's announcement will rather have an adverse impact on US consumers by limiting their choices.

"We remain committed to establishing our North American home appliance manufacturing facility in South Carolina and to delivering the most innovative washing machines, made by Americans, and sold to American consumers," Samsung Electronics said in response to the announcement.

"We urge the Commission to consider carefully how potential remedies might hinder the establishment and operations of this facility and affect American consumers," Samsung added.

LG Electronics echoed the view, claiming that US consumers and retailers will be the victims if Washington decides to slap its products with regulations.

"It is US retailers and consumers who chose (to purchase LG washers)," an official from LG Electronics said.

Samsung and LG are estimated to sell around 2 million units of washers in the United States every year, with the combined value estimated at US$1 billion, industry watchers said.

Samsung produces most of the products in Thailand and Vietnam.

LG also makes around 80 percent of its washers in Thailand and Vietnam, while the remaining 20 percent is produced in South Korea.

Although the ITC's measure is expected to exclude volumes produced in South Korea, the decision is anticipated to weigh down on Samsung and LG's sales as they still depend heavily on overseas production facilities.

Industry watchers said Samsung and LG's on-going projects to build production facilities in the United States will help in overcoming losses from the measure partially.

Samsung's home appliances factory under construction in South Carolina is expected to be ready for operation in January. LG Electronics' construction of the washer factory in Tennessee is expected to be completed in the first quarter of 2019.

The companies, however, still need to secure more time to commence stable productions at US facilities. They also must find new markets to sell washers produced in Southeast Asian countries, or reduce production there.

Samsung and LG currently plan to continue defend themselves at hearings to be hosted by the ITC later this month.

"We believe that safeguard remedies should not discriminate in favor of one group of US-based workers over another and should not negatively impact a fair appliance marketplace for consumers," Samsung added.