Print 7 comment(s) - last by Jalek.. on Apr 28 at 5:14 PM

Panasonic will also close some manufacturing plants

Panasonic has long been one of the world's top consumer electronics firms and is involved in vast and varied markets ranging from consumer electronics to battery production. The company has been hard hit with tough competition from other companies in the market and from the massive earthquake and tsunami that hit Japan.

Panasonic is looking to reorganize its operations to better compete in the marketplace. The reorganization will see the electronics company shed 17,000 workers over the next two years. Currently, Panasonic has about 367,000 workers around the world. It wants that number pared back to 350,000.

The company has set aside about $1.3 billion (110 billion yen) for restructuring expenses.

Toru Hashizume from Stats Investment management said, "The figure [layoffs] is huge, but so is the company, and for an old-fashioned one like Panasonic, this is a big move."

Shedding workers isn’t the only place Panasonic is hoping to save money. The company is also going to be combining operations and closing down manufacturing plants as well. Reuters reports that Panasonic currently has about 350 manufacturing bases around the world.

Panasonic president Fumio Ohtsubo said, "I can't say for sure, but I think it's possible we will cut the number of manufacturing bases by 10 or 20 percent."

Investment analyst from Federated Advisory Services in Tokyo Masahiro Mitsui told Bloomberg, "Restructuring is inevitable after the acquisitions. Panasonic needs to boost its competitiveness even more as the energy-related businesses are getting more and more crowded with South-Korean and Chinese makers."

The acquisitions includes the $6 billion Panasonic spent last year to buy parts of Sanyo Electric Co. and Panasonic Electric Works Co. The company already has a deal in place with Tesla to make battery packs for Tesla's electric vehicles.

Bloomberg reports that Panasonic will halt new investments in both plasma and LCD display operations to revive profits in the sagging TV unit. Panasonic will also seek more alliances to purchase LCD panels. 

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Slashing R&D to increase profit?
By KnightBreed on 4/28/2011 12:29:10 PM , Rating: 4
"Bloomberg reports that Panasonic will halt new investments in both plasma and LCD display operations to revive profits in the sagging TV unit. Panasonic will also seek more alliances to purchase LCD panels."

In what Bizarro world does slashing R&D budget actually increase profitability? Unless they plan on dumping the entire division, like Philips did a couple weeks ago, slowed R&D will only put them further behind competitors. Typical short-term thinking by the executives on top.

More companies should learn from Intel. When the economy slowed they increased R&D and cut spending elsewhere. This gave them a huge advantage when the economy picked back up. AMD is still struggling to gain ground. You can't save your way out of a recession.

That sucks though. Panasonic and Samsung are (were?) the only ones still spending money on plasma.

By vapore0n on 4/28/2011 12:58:03 PM , Rating: 2
They probably will slash RnD on 3D displays, a niche market right now.
They could also just let someone fork the RnD costs and then license from them.

RE: Slashing R&D to increase profit?
By HammerStrike on 4/28/2011 1:05:24 PM , Rating: 3
R&D costs go directly onto their expense line (SG&A) - reduce your expenses and, everything else being equal, your net profitability rises.

Of course, over the long term they will need to innovate to remain relevant, but the reality is that the bulk of the TV sales are in the low end, no thrills sets - consumers have yet to show that they are willing to spend extra for features such as 3D, internet connectivity/apps, etc. Likewise, picture quality on most sets is already quite good, and I think they are hitting a point of diminishing returns when it comes to R&D for improved visual fidelity.

The TV business at most major OEM's have been losing money for several years; something has to change. As long as consumers show little interest in new feature sets and simply demand cheap, entry level units, the manufactures will respond appropriately. Unfortunately, this means less investment in R&D.

By Chudilo on 4/28/2011 3:56:36 PM , Rating: 1
That's not entirely true. I do want the high end models. However, I think 3D TV is stupid. (Until they can make it into an actual freestanding hologram).
What I and many others want is an advanced IPS panel (which may Panasonic units have) that does a much better job at reproducing colors , had a much higher contrast ratio and displays excellent black levels. TN panels are so terrible at these things that they should not even be considered acceptable for a TV. The fact that consumers don't know that is the fault of Panasonic's own marketing department. They should be advertising their viewing angles, their color reproduction, their contrast ratios. (Instead of the stupid 3D or "touch of color" BS).

As far as internet apps are concerned, they don't belong in the TV just like the blue ray drive doesn't belong in the TV. the TV should be a display of as good of a quality as they can possibly make it.

All the iPhone docks or Webcams for Skype colored LEDs and so on don't belong there. The sooner they stop wasting their time and resources on that the better off they are going to be.

They might spend their resources on making and improving those things as accessories for their BlueRay drives or media devices, as they already have the necessary hardware/computing power to do that. The only way I would consider getting a TV with a gimmicky accessory built-in is when I'm sure that I will be using it for the life of the Unit. There is no way that any webcam that comes with the TV will still be viable 5-10 years from now. I could always swap out an add-on device or a media device, but it will take quite a bit of convincing to make me switch the TV just because it's a large piece of equipment that most likely entails more then just remounting it on a rack.

By HammerStrike on 4/28/2011 1:07:53 PM , Rating: 2
Also, just noticed the original article said halting "investments", not R&D per say. I suspect the investments referenced are more along the lines of manufacturing capacity (new plants) then they are R&D, although both are probably on the cutting block.

RE: Slashing R&D to increase profit?
By gevorg on 4/28/2011 4:17:39 PM , Rating: 2
"Bloomberg reports that Panasonic will halt new investments in both plasma and LCD display operations to revive profits in the sagging TV unit. Panasonic will also seek more alliances to purchase LCD panels."

This sucks, I really hoped they would continue to improve and innnovate the Kuro plasma technology they got from Pioneer. Till this day I haven't seen any TV that has better picture quality than the years old Kuro. :(

RE: Slashing R&D to increase profit?
By Jalek on 4/28/2011 5:14:18 PM , Rating: 2
My plasma television's the only Panasonic anything I've purchased in many years. I don't think Samsung will be slowing down development, so this seems like a short term savings leading to a long term market exit.

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