LG Electronics CEO Resigns

LG Electronics CEO Koo Bon Joon

Amid problems with its flailing mobile phone business, LG Electronics' Chief Executive Officer Yong Nam resigned on Friday and will be replaced by a founding family member, according to a company statement. Koo Bon Joon, vice chairman of the larger conglomerate LG International, will take over next month.

"At a meeting of the board of directors held Friday, Nam Yong offered to resign as CEO to take responsibility for the slack performance and pave the way for a new CEO to prepare for next year and onward," the statement said.

Nam is the second CEO to resign from a major cell phone company in a week. Last Friday, Nokia ousted Olli-Pekka Kallasvuo and replaced him with Stephen Elop, an executive with Microsoft Canada. The 62-year-old Nam has been chief executive of LG Electronics, the third largest mobile phone maker in the world, since 2007. Koo, 59, has held executive positions at many LG Group subsidiaries. His brother, Koo Bon Moo, is the chairman of LG Group.

In July, LG Electronics posted a 33% decline in second quarter profits from the same period a year ago as its handset business saw a decline in revenues for the first time in four years. The company is predicting a similar loss in the current quarter.

LG Electronics and Nokia have both struggled to roll out smartphones to rival Apple's iPhone, and Android-powered devices by Samsung Electronics and HTC and Motorola. LG Electronics this week launched its Optimus One handset, and said it is projecting sales of 10 million for its first smartphone device to be sold worldwide through some 120 carriers. None of LG Electronics' smartphones have sold one million units.

Although management changes generally occur at the end of the year, the move to replace Nam now appears to indicate the company's desire to overhaul the struggling phone division right away. The company statement said the decision was made now in order to allow Koo time to get ready for next year.