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Recalling 9.6 million batteries could have that effect on a company's bottom line

Those who have been following the news know that Sony has seen better days. Sony revealed to investors that net income for the year will decline 35 percent to 80 billion yen (US$675 million) from a year earlier, great short of the July forecast of 130 billion yen. Operating profit will fall 62 percent to 50 billion yen (US$420.6 million) this fiscal year, while the sales forecast was kept at 8.23 trillion yen (US$69.2 billion).

Reasons cited for the dive in profits are fairly obvious. Sony CFO Nobuyuki Oneda said in this mini report that a total of 9.6 million Sony-made PC batteries which were found in Dell, Lenovo, Apple, Toshiba, Matsushita/Panasonic, Fujitsu, Sharp and Sony's own notebooks could be subject to the company's global recall. Oneda said replacing the cells will cost 51 billion yen (US$429 million).

"The cost of the recall is our best estimate," Nobuyuki Oneda told reporters. "It may rise or fall."

Other reasons behind Sony's big financial revisions came from PlayStation 3. Sony announced at the Tokyo Game Show that the 20GB variant of the PlayStation 3 would receive a 20 percent price cut even before it hit stores and that it would include an HDMI connection that was previously reserved for the more expensive 60GB version. While this was good news for consumers, to investors it meant a more costly machine to produce. PlayStation 3 sales projections were also cutback due to the delay of the European launch.

Read more about it in this Reuters article.

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RE: Screwing your customers
By TomZ on 10/19/2006 3:08:57 PM , Rating: 2
As far as quality, US car companies are nowhere near Japan. Closer to a Yugo than Honda or Toyota.

That's not factually true - actually, US brands are continuing to close the quality gap relative to Japanese brands. In fact, when you look at the top-performing manufacturing plants, a number of them are GM and Ford plants, along with their Japanese counterparts.

RE: Screwing your customers
By robber98 on 10/19/2006 4:48:54 PM , Rating: 2
Sure, US brands are continuing to close the gap. But do you realize how big the gap is? ;)

RE: Screwing your customers
By retrospooty on 10/20/2006 11:12:55 AM , Rating: 3
Yes, I have been hearing that for years... I am not sure how they rate manufacturing plants... but year after year the customer sat scores are still bad for US cars. Acura and Lexus are consitantly #1 and # 2 US cars are distant, not even close.

I am not sure what the issue is, because we CAN build reliable trucks. ??? I think the US car makers made a descision to build poor quality in. if you build a car that lasts 10 years, you have lost a customer for 10 years. ? I dunno.

"I modded down, down, down, and the flames went higher." -- Sven Olsen
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