Asia Express - East Asian ICT
Sony to Close Plants in Japan and Abroad; Toshiba, Hitachi to Shutter Overseas TV Plants
May 15, 2009
Sony, which recently posted a group operating loss of 227.8 billion Yen (US$2.4 billion; US$1=95.8 Yen) for fiscal 2008 ending in March, is expected to continue with consolidation and termination of manufacturing facilities well into fiscal 2011, Kyodo News International reported on May 14, 2009. Imminently, Sony is about to cease TV production at its Aichi facility in Japan. Manufacturing operations in Chiba, Shizuoka, and Iwate prefectures are planned to be shut down as well. In addition, the company is also expected to discontinue LCD (Liquid Crystal Display) TV production in Mexico and flexible flat cable manufacturing in Indonesia. Overall, it is estimated that eight of Sony's manufacturing facilities worldwide will be shuttered in the short run. Sony is expecting a group net loss of 120.0 billion Yen (US$1.3 billion) for the current fiscal year ending in March 2010, with sales forecasted to drop 6% to 7.3 trillion Yen (US$76.2 billion). As the company is expected to carry on with production facility consolidations and personnel cuts until fiscal 2011, its restructuring costs are projected to remain at a relatively high level and affect its earnings.

At the same time, two other Japanese electronics manufacturers Toshiba and Hitachi are also closing flat-panel TV plants overseas, according to a May 14 Reuters report. Toshiba's UK unit is expected to cease LCD TV assembly at a Plymouth plant by the year-end, with 80% of the workforce to be affected by the shutdown. Meanwhile, Hitachi has just shuttered a flat-panel TV production facility in the Czech Republic, with approximately 800 workers affected. Hitachi's production for the European market is expected to be outsourced to contract manufacturers, according to the report.