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Japan's Aiwa to Reduce 50% Work Force, Combine Factories
Japanese electronics maker Aiwa Co. will reduce by half its global work force to about 5,000 within the year and combine operations into one factory as part of efforts to survive a worldwide economic slowdown.
Hurt by dropping demand for the company's products, the Sony Corp. subsidiary will also cut back output of unprofitable televisions and other items, shifting to more profitable digital products, including a portable audio player, said Aiwa spokesman Masahiro Ashino.
Aiwa estimates the restructuring will reduce annual sales by about 30 percent to approximately 200 billion yen ($1.6 billion) in fiscal 2002 from its current 300 billion yen ($2.4 billion), Ashino said.
Aiwa's decision was made based on increased price-cutting competition from manufacturers in China, he said.
By March 2002, Aiwa said it will shift operations from its main factories in Iwate prefecture in northern Japan, Malaysia and Indonesia into one factory, Ashino said. The company has yet to choose that location.
Aiwa employs 2,600 workers in Japan, while 7,400 people work at four overseas plants, including one each in Malaysia and Wales, and two in Indonesia.
Under the restructuring plan, Aiwa also will close out six other smaller factories, including the one in Wales.
Sony holds a 50.5 percent stake in Aiwa, which was founded in 1951.
Earnings at Japanese manufacturers have eroded as consumers jittery about Japan's decade-long economic slump refuse to spend. The outlook has become more bleak as the country's nascent recovery appears to have skid to a halt.
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