Panasonic Names New President to Revive TV Business
Panasonic (NYSE: PC) named Kazuhiro Tsuga president as the company tries to recreate itself after forecasting a net loss of $9.7 billion for the year ending March 31.
The Japanese appliance maker announced a record anticipated net loss earlier this month based on low demand for televisions and productions stoppages from flooding in Thailand.
Tsuga, 55, currently senior managing director and president of the company's money-losing television business, will replace current president Fumio Ohtsubo, 66, after gaining shareholder approval at the general meeting June 27, Panasonic said in a statement today.
Since Ohtsubo became president in June 2006 Panasonic stock has decreased by about two thirds, closing yesterday at $9.21. The company was recently downgraded by Moody's, Standard and Poor's and Fitch as demand weakens for the company's products and competition increases.
A similar change in management occurred earlier this month at Sony (NYSE: SNE) where Kazuo Hirai, 51, will replace Howard Stringer as president and chief executive officer April 1. Both companies have also predicted losses, which when combined with the losses predicted by fellow Japanese manufacture Sharp (SHCAY.PK), total $17 billion for the year, as Japan's electronics industry struggles with foreign competitors, including Korea-based Samsung electronics (KSE: 005930.KS), and a weakening yen .
Tsuga plans to focus on increasing profitability in the TV business, he said at a news conference in Osaka, Japan, following the announcement.
"I won't pursue volume, and will prioritize profits. I will consider ways to bring the TV business back to normal within 1-2 years," he said.
Tsuga will be head of a company which started as a maker of plugs nearly 100 years ago, and has since expanded into various electronic markets from refrigerators to bicycle pumps and light bulbs to cameras. He joined the company in 1979, where he helped develop DVD recorders and was head of the automotive systems unit before becoming the head of the audio-visual products unit in April.
Ohtsubo had planned to transform the company into a leader in solar panels and rechargeable batteries by eliminating jobs, shifting output overseas and closing display factories. Panasonic employs about 350,000 workers, three times Samsung's workforce and twice that of fellow Japanese manufacture Sony.
Panasonic purchased a controlling stake in Sanyo Electronics, Japan's largest maker of rechargeable batteries, in 2008 and increased its stake until Sanyo was a wholly-owned company, giving Panasonic control over Sanyo's solar panel, lithium battery and consumer electronic businesses. The company is writing down 250 billion yen stemming from the acquisition. Panasonic also merged with Panasonic Electric Works, a lighting system, electrical wiring and electronic material manufacturer, in 2011.
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