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Panasonic set to cut jobs and dispose assets in 'garage sale'
Source: Agencies |
November 15, 2012, Thursday
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ABOUT a fifth of Panasonic Corp's 88 business units are losing money and only half so far meet a target for at least 5 percent operating margin, the Japanese electronics group's finance chief said yesterday.
Hideaki Kawai said the country's biggest commercial employer will axe another 10,000 jobs by end-March as it pares its costs and looks to return to profit. Panasonic shed 36,000 jobs last business year, some through the sale of businesses.
"Our new boss has said businesses must achieve at least a 5 percent operating profit target within three years," Kawai said, referring to Kazuhiro Tsuga, who took over as company president in June. "But we won't wait that long to tackle units that need to be dealt with."
Sell-offs and business closures will start as early as next year, he said at Panasonic's headquarters in Kadoma, near Osaka in west Japan.
Kawai said Panasonic aims to earn group operating profit of at least 200 billion yen (US$2.52 billion) in the year to end-March 2014.
Panasonic warned last month that it will lose close to US$10 billion in the year to March as it writes off billions of yen in tax-deferred assets and goodwill related to its mobile phone, solar panel and small lithium battery businesses. It also put aside money to cover the layoffs and other restructuring measures.
Panasonic plans to offload assets worth 110 billion yen before the end of March, mainly land and buildings in Japan, Kawai said. More asset sales will follow from next business year if needed to bolster cash flow.
Panasonic's "garage sale" comes ahead of a turnaround plan that Tsuga has promised to unveil by end-March, which will be the start-line to offload underperforming businesses. As financial chief overseeing hundreds of accountants spread across a sprawling conglomerate, Kawai plays a key role in helping Tsuga identify which businesses to close, sell or merge.
Selling businesses and offloading other assets should boost Panasonic's cash flow and help pay for the latest restructuring at a company that began in 1918 making electrical socket extensions and bicycle lamps, and now employs 300,000 workers.
Panasonic shares, already trading near multi-decade lows, slumped by almost a fifth on November 1 on the loss forecast, and Standard & Poor's has cut its credit rating to close to junk. The stock closed up 0.8 percent yesterday, ending a four-session losing streak.
Hideaki Kawai said the country's biggest commercial employer will axe another 10,000 jobs by end-March as it pares its costs and looks to return to profit. Panasonic shed 36,000 jobs last business year, some through the sale of businesses.
"Our new boss has said businesses must achieve at least a 5 percent operating profit target within three years," Kawai said, referring to Kazuhiro Tsuga, who took over as company president in June. "But we won't wait that long to tackle units that need to be dealt with."
Sell-offs and business closures will start as early as next year, he said at Panasonic's headquarters in Kadoma, near Osaka in west Japan.
Kawai said Panasonic aims to earn group operating profit of at least 200 billion yen (US$2.52 billion) in the year to end-March 2014.
Panasonic warned last month that it will lose close to US$10 billion in the year to March as it writes off billions of yen in tax-deferred assets and goodwill related to its mobile phone, solar panel and small lithium battery businesses. It also put aside money to cover the layoffs and other restructuring measures.
Panasonic plans to offload assets worth 110 billion yen before the end of March, mainly land and buildings in Japan, Kawai said. More asset sales will follow from next business year if needed to bolster cash flow.
Panasonic's "garage sale" comes ahead of a turnaround plan that Tsuga has promised to unveil by end-March, which will be the start-line to offload underperforming businesses. As financial chief overseeing hundreds of accountants spread across a sprawling conglomerate, Kawai plays a key role in helping Tsuga identify which businesses to close, sell or merge.
Selling businesses and offloading other assets should boost Panasonic's cash flow and help pay for the latest restructuring at a company that began in 1918 making electrical socket extensions and bicycle lamps, and now employs 300,000 workers.
Panasonic shares, already trading near multi-decade lows, slumped by almost a fifth on November 1 on the loss forecast, and Standard & Poor's has cut its credit rating to close to junk. The stock closed up 0.8 percent yesterday, ending a four-session losing streak.
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