New Toshiba Corp. President Hisao Tanaka is confident the company can rebuild its loss-making TV business by slashing fixed costs and taking other restructuring measures that will make it profitable in the second half.
Tanaka, 62, who assumed his post Tuesday, succeeding Norio Sasaki, was also optimistic about promoting mergers and acquisitions, though he declined comment on reports that Toshiba is trying to invest in Panasonic Corp.’s health care business.
The most important criteria in pursuing M&As are “whether there will be synergies and (whether) we can aim for further growth through a complementary relationship,” Tanaka said, adding that health care is an area the company wants to focus on.
As for the struggling liquid crystal display TV business, which logged its second consecutive annual operating loss in the year that ended in March, Tanaka, said: “We can definitely make the business profitable in the latter half of fiscal 2013.”
Like Japan’s other electronics makers, Toshiba has been hit by a slump in TV demand after the government forced everyone to buy new TV sets by shifting from analog broadcasting to digital terrestrial broadcasting in July 2011. The replacement surge, however, mostly benefited their cheaper overseas rivals.
Tanaka said Toshiba plans to unveil restructuring measures next month, add value-added products and reduce inventory to rebuild the LCD TV business, which he said it has no intention of withdrawing.
In fiscal 2012, Toshiba was hit by a nearly ¥50 billion operating loss from its LCD TV business.
The company plans to announce its business management plan in August.
Panasonic revival pledge
The chief of electronics giant Panasonic Corp. vowed Wednesday to turn things around as soon as possible, after reporting another hefty loss to shareholders.
“The management is keenly aware of our responsibility for not having been able to pay a dividend” for the last fiscal year, President Kazuhiro Tsuga said at the outset of Panasonic’s shareholders’ meeting in Osaka. “We truly apologize for that.”
Panasonic logged a group net loss of ¥754.25 billion for fiscal 2012, which ended in March, its second consecutive year of huge losses caused by sluggish sales of flat-panel TVs and other appliances as well as hefty restructuring costs.
With the gains from restructuring, Panasonic is looking to turn things around this year with a group net profit of ¥50 billion.
While its loss-making operations are expected to remain unprofitable this year, Tsuga said the company will promote further cost reductions and alter its structure so that it is less reliant on the TV and display panel business.
Shareholders were critical of the results. One demanded that board members’ pay be slashed further, instead of cutting more jobs. But Tsuga said pay cuts had already been implemented.