Japan’s Pioneer Corp is to quit its loss-making flat-screen TV business in a sweeping overhaul of its operations, the Nikkei Shimbun reported yesterday.
The company had planned to end in-house production of plasma panels by the end of next month and fit TVs with Panasonic Corp panels instead.
But, faced with worsening profit margins amid the global economic downturn and a stronger yen, which hurts exports, it has decided to end TV production altogether, the Nikkei said, without naming sources.
Pioneer had been restructuring its troubled plasma television operations, shedding hundreds of jobs and shutting a domestic plant last year.
Pioneer will also spin off its loss-making DVD player operations to a new company to be set up with Sharp Corp this year, the Nikkei said.
It plans to shed several thousand jobs from its 40,000-strong workforce by March next year, the paper said.
Pioneer is expected to post a consolidated net loss of more than ¥100 billion (US$1.09 billion) for the current year to next month, up from the ¥78 billion loss it had earlier forecast, the report said.
Pioneer had its debt rating cut two levels to Ba1, a step below investment grade, last month by Moody’s Investors Service, which cited a slowdown in demand for car audio and navigation products.
Pioneer was not the source of the Nikkei report, the company said in a statement to the Tokyo Stock Exchange yesterday.
ADDITIONAL REPORTING BY BLOOMBERG