A deepening cash crisis at Pioneer has forced the Japanese giant to close down what was once the world’s leading flat-screen television business and cut 10,000 jobs from its workforce.
As well as huge job cuts in Japan and the US, 220 positions will be lost in the UK this month with the closure of Pioneer’s plasma display factory in Castleford, West Yorkshire.
“It's heartbreaking for us to withdraw from the display business, which we spearheaded, but the market is changing faster than we ever expected," Susumu Kotani, the president of Pioneer, said.
Analysts said that the company, which is forecasting record annual losses of 130 billion yen (£1 billion) for the year ending this March and may stay in the red next year, faced an “urgent” need to find a financial backer or merger partner to ensure its survival.
Sharp already holds a near-15 per cent stake in Pioneer but is facing financial challenges of its own and has not shown any immediate interest in mounting a rescue takeover bid.
The net losses were substantially worse than both the market and Pioneer’s own previous forecasts expected, prompting Hitoshi Kuriyama, a technology analyst with Bank of America Merrill Lynch, to warn investors that Pioneer’s crisis could get even worse.
Pioneer’s exit from TV production, an area in which the company developed some of the highest technology in the industry, will leave it tightly focused on its more financially successful car navigation and in-car entertainment division, a business that is likely to be hit hard by the continuing collapse of car sales in America, Europe and Japan.
Daiwa Securities analysts described the car-related equipment market as being in a “disastrous” state, with new car sales plunging and consumers cutting back sharply on the sort of high-end music systems in which Pioneer specialises.
The predicted loss would make fiscal 2008 Pioneer’s fifth successive year in the red and comes despite an emergency management reshuffle in November and previous attempts to restructure the ailing business.
Pioneer’s troubles highlight the grim state of affairs for all consumer electronics makers.
Flat-screen televisions have been an especially difficult market for many years as ever-intensifying competition between Japanese, Korean and Chinese manufacturers has crushed prices and left margins at unworkably low levels.
Added to the misery has been the enduring battle between rival technologies: Pioneer, like Panasonic, its larger domestic rival, has focused on plasma displays; Sony, Sharp and Samsung have backed LCD screen technology.
In its restructuring, Pioneer will cut a third of its worldwide portfolio of 30 manufacturing plants.
As well as huge job cuts in Japan and the US, 220 positions will be lost in the UK this month with the closure of Pioneer’s plasma display factory in Castleford, West Yorkshire.
“It's heartbreaking for us to withdraw from the display business, which we spearheaded, but the market is changing faster than we ever expected," Susumu Kotani, the president of Pioneer, said.
Analysts said that the company, which is forecasting record annual losses of 130 billion yen (£1 billion) for the year ending this March and may stay in the red next year, faced an “urgent” need to find a financial backer or merger partner to ensure its survival.
Sharp already holds a near-15 per cent stake in Pioneer but is facing financial challenges of its own and has not shown any immediate interest in mounting a rescue takeover bid.
The net losses were substantially worse than both the market and Pioneer’s own previous forecasts expected, prompting Hitoshi Kuriyama, a technology analyst with Bank of America Merrill Lynch, to warn investors that Pioneer’s crisis could get even worse.
Pioneer’s exit from TV production, an area in which the company developed some of the highest technology in the industry, will leave it tightly focused on its more financially successful car navigation and in-car entertainment division, a business that is likely to be hit hard by the continuing collapse of car sales in America, Europe and Japan.
Daiwa Securities analysts described the car-related equipment market as being in a “disastrous” state, with new car sales plunging and consumers cutting back sharply on the sort of high-end music systems in which Pioneer specialises.
The predicted loss would make fiscal 2008 Pioneer’s fifth successive year in the red and comes despite an emergency management reshuffle in November and previous attempts to restructure the ailing business.
Pioneer’s troubles highlight the grim state of affairs for all consumer electronics makers.
Flat-screen televisions have been an especially difficult market for many years as ever-intensifying competition between Japanese, Korean and Chinese manufacturers has crushed prices and left margins at unworkably low levels.
Added to the misery has been the enduring battle between rival technologies: Pioneer, like Panasonic, its larger domestic rival, has focused on plasma displays; Sony, Sharp and Samsung have backed LCD screen technology.
In its restructuring, Pioneer will cut a third of its worldwide portfolio of 30 manufacturing plants.
The Fuji blew it away and cost half as much.
