Pioneer Officially Out Of Plasma
The Company has admitted that they lost over $1.8 billion trying to sell consumer electronic products last year and that their move to brand their plasma TV screens as Kuro Black had failed to drive sales.
Pioneer said it will withdraw from the TV business by March 2010 and cut 10,000 jobs worldwide, including 6,000 full-time positions.
Pioneer is now forecasting a wider annual deficit because of lower-than-expected sales of car electronics. Pioneer Australia has refused to comment on whether they will continue as a subsidiary in Australia where they have struggled with their TV offering via mass market retailers. This resulted in the Company moving to a specialist installer network late in 2008.
A Company spoksperson in Australia said that Pioneer Australia will be holding an all staff meeting tomorrow Friday to brief local staff. Michael Broadhurst Communications Manager for the Company said that Rob Thompson will brief staff first and then the media.
The situation is not looking good for Pioneer Electronics operations following the announcement in Japan where management have said that the Company will focus on the automotive market after exiting the plasma market.
According to TWICE, DisplaySearch’s 2008 fourth-quarter market share report, Pioneer ranked fifth in plasma TV market, with a 2.6 percent share, down 4 percent from the prior quarter and down 9 percent year over year.
The company said it will continue to provide after-sales services even after the withdrawal from the market.
While Pioneer acknowledges that car electronics is “severely affected by lower demand” for cars, it expects a recovering in fiscal year 2011, ended March 31, 2011, and will shift its TV resources to emphasize telemantics.
In its home electronics business Pioneer will center on audio products, DJ equipment and cable TV set-top boxes and will emphasize “‘sound’ as we take advantage of our extensive audio technologies and expertise developed over the years.” A Company spoksperson said.
In its optical disc business Pioneer is “considering measures for improving profitability, including forming a joint venture.”
“The market car-related equipment market is disastrous now,” Kazuharu Miura, a Tokyo-based analyst at Daiwa Institute of Research Ltd told Bloomberg before the announcement. “Car-navigation sales are bad because of slowing car sales, and demand for car audio systems are low due to weak consumer spending.”
In a statement issued in Australia by Pioneer Electronics the Company said: We have implemented restructuring measures mainly to improve profitability in the display business since 2008. These measures have included termination of inhouse plasma display panel production and implementation of early retirement programs including personnel in administrative and sales divisions.
Overseas, we have started to streamline our sales structures and have decided to close plasma display production facilities. Plans call for ending production at our U.S. and U.K. display production facilities in April and February 2009, respectively. Pioneer expects to complete these restructuring measures within the first half of 2009.
Pioneer’s consolidated workforce decreased by approximately 5,900 employees from March 31, 2008 to roughly 36,900 employees as of December 31, 2008. The number of temporary employees also decreased by approximately 4,000 in the same period.
However, Pioneer has been affected significantly by dramatic changes in economic conditions since the fall of 2008â€”an impact that has far outweighed the benefits being generated by the aforementioned restructuring measures. Pioneer is now forecasting a record net loss for fiscal 2009, the year ending March 31, 2009.
II. New Restructuring Measures