ArchiveOriginally published 2009

LG Electronics and Its Mexican Plants: The 2009 Reorganisation, Revisited

One of the most-linked posts in this site's history was a short news item: LG Electronics was reorganising its Mexican operations and closing manufacturing plants. It was picked up by trade press and aggregators around the world. This is what the story was, and what happened next.

What the post reported

The original item, published during the sharp electronics downturn that followed the 2008 financial crisis, relayed reports that LG Electronics was reorganising its manufacturing in Mexico and shutting plants as part of that process. At the time LG, like every large consumer electronics maker, was cutting capacity: television and monitor demand had fallen, the shift from cathode-ray tubes to flat panels had left older lines idle, and companies were consolidating assembly into fewer, larger sites. The post was brief, as most news items on this site were, and its long life comes from timing and title rather than depth: it was one of the few English-language pages with that exact headline, and it was quoted and linked in industry newsletters, supplier forums and business-school reading lists.

Why Mexico mattered to LG

Since the 1990s the border cities of northern Mexico have been the main assembly base for televisions and monitors sold in North America. Trade rules, proximity to the United States market and lower labour costs made it far cheaper to build a set in Reynosa or Mexicali and truck it across the border than to ship it from Asia. LG and its Korean rival, along with Japanese and later Chinese makers, all built large plants in the region. A reorganisation there was therefore a signal about the whole industry's expectations for the North American market, which is why a small post about it attracted attention well beyond laptop readers.

What happened afterward

LG did not withdraw from Mexico. Through the following decade the company continued to assemble televisions in the north of the country and grew its appliance manufacturing, and Mexico remained one of its most important production bases for the Americas. The wider trend the 2009 post captured, consolidation during a downturn, reversed in the 2020s as companies moved production closer to the United States market; northern Mexico saw a wave of new and expanded plants from electronics and appliance makers, LG among them. As far as the public record shows, the plants closed in 2009 were part of that consolidation rather than the start of an exit.

Why the story is worth keeping

Read today, the post is a small marker of an industry turning point. It sits at the moment when tube television production ended, when flat panels became commodities, and when a downturn forced every maker to decide which factories were worth keeping. That the answer for Mexico turned out to be yes says something about how durable the border manufacturing belt has been. This retrospective replaces the original item so that the many pages still linking to it land on an account of what it meant rather than on an error page.