Pioneer Corp. said it has appointed executive vice-president Tamihiko Sudo as its new president. "Our firm aims to speed up structural reforms and achieve a turnaround under the new leadership," Pioneer said in a statement. Incumbent president Kaneo Ito and and chairman Kanya Matsumoto will step down and become advisors to the company. The proposed management change will take place on Jan 1.
The company, which makes DVDs and plasma display panel (PDP) TVs, announced a reshuffling of its top management after it warned last month of a net loss of 24 billion yen (approx. U.S. $202.3 million) for the year to March 2006 due to falling prices of digital home appliances and swelling restructuring costs. Pioneer said it will announce in early December a new turnaround plan meant to revive profitability, but gave no details.
The Nihon Keizai Shimbun reported over the weekend, without identifying its sources, that Pioneer will substantially scale down its DVD recorder operations, cut its domestic work force by around 1,000 and cut wages.
Under the plan, Pioneer will stop production of its current line of DVD recorders and procure them instead from low-cost manufacturer Funai Electric Co, the report said.
Since October, the firm has halted operations at two of its six domestic production lines for PDPs, another problem area for Pioneer, the newspaper said.
Pioneer's struggle began after the company bought in October last year the PDP-making operation of NEC Corp for 40 billion yen (approx. $337.2 million), giving Pioneer a 16 to 17 percent share of global PDP output.
Pioneer soon after announced plans to increase its annual PDP production capacity to 1.1 million units in the year to March 2006, and to 1.2 million units the following year.
But because NEC supplied its products to Sony Corp, which recently stopped making PDP TVs, the purchase meant Pioneer was left with over-capacity amid declining prices. (Forbes, AFX)
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