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According to Panasonic, with a view to further strengthening its finished product manufacture and device businesses, the company will vertically integrate Home Appliance and Automotive Motor, Industrial Motor businesses, and finished products.
Panasonic said in a statement, "The Company reorganizes and integrates Home Appliances and Automotive Motor business to HA for aspiring to survive not only in Motor business but in home appliances business, amid global recession and ever-intensified competition triggered by the financial crisis. Therefore, Panasonic expects its synergy effect and further strengthening of its business structures."
Panasonic believes that by vertically integrated finished product manufacture and device businesses, making decisions will be quicker, and that it can strengthen product competitiveness by integrating black box technology of both businesses, accelerating manufacturing and development at global optimal locations, and strengthening cost competitiveness.
Regarding its sales division, Panasonic will build the structure to strengthen the relation with customers, and aims to develop its business through expansion of energy-efficient home appliances with worldwide environmental regulations. The company plans to develop industrial solutions by collaborating with controller manufacturers, and create new automotive motor unit business based on Panasonic group's comprehensive strengths.
Panasonic will liquidate Panasonic Motor Matsusaka Co., Ltd., which is Panasonic's subsidiary company, for accelerating manufacturing at global optimal locations after transferring compact AC geared motors and industrial brushless motors to Panasonic Motor (Zhuhai) Co., Ltd.
The company noted that further growth in demand is expected in new product applications, such as digital home appliances and information terminals. Motor Company, however, has been focusing on businesses for document fields and for finished products of group companies due to cost competition.
The company will transfer the Information Equipment Motor Business to Minebea Motor, a joint venture between Panasonic and Minebea Co., Ltd., and establish a robust managerial foundation through fundamental reform of its fixed-cost-structure. The company will also aim to expand business further by strengthening synergy with Minebea group.
With regard to the employees engaged in the corresponded business, Panasonic said it put the priority on job security, such as transferring to HA, being employed by Minebea Motor group companies and promoting job-placement assistance. The company said it would pursue consultations between labor and management in full respect of the relevant employees.
Panasonic has been battered by global recession. Last week, the company reported depressing second-quarter results, as domestic and overseas sales dropped significantly. Second-quarter net income attributable to the company plunged to 6.11 billion yen from 55.46 billion yen in the previous year. Basic earnings per share for the quarter were 2.95 yen, compared to 26.72 yen in the year earlier period. Consolidated group sales for the second quarter decreased 21% to 1,737.8 billion yen from 2,191.7 billion yen a year ago. Domestic sales dropped 14% and overseas sales declined 27% from last year.
However, Panasonic said at that time that it has started to recover from the recession and shrinking demand by strengthening the management structure, and revised annual earnings forecast upward.
PC closed Friday's regular trade at $14.27, up from the previous close of $13.90, on 656,600 shares.
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