Japan’s biggest manufacturer of liquid crystal displays (LCD) has named Takashi Okuda the new President of the slumping company in hopes he can use his more than 30 years of experience in the industry to turn things around.
The 58-year-old Okuda is the former head of global operation at Sharp (News - Alert) Corp. He replaces Mikio Katayama, who will know serve as chairman for the company.
“I will take responsibility for that turnaround in tandem with the new president,” Katayama told reporters in a press conference following the announcement. He emphasized that the recent financial problems at Sharp were not because the company was moving in the wrong direction, but changes are necessary to get things back on track.
Sharp recently announced a 290 billion yen ($3.5 billion) loss for the fiscal year ending March 31. Despite the fact the Nikkei average is up 14 percent since February 1, Sharp stocks have fallen 15 percent during the same period.
The company attributes the financial problem to slumping sales, excess inventory and investments in new facilities. Reuters data reports Sharp’s debt-to-equity ratio was six times the industry average, making it the highest of all Japanese electronics manufacturers.
Sharp is not the only company having financial difficulties. Sony and Panasonic (News - Alert) recently announced management changes as well. The three Japanese electronics makers forecast a combined $17 billion loss this year. These companies are facing tough competition from companies like Samsung (News - Alert) Electronics, as well as feeling the effects of weak demand and strong yen over the dollar.
Sharp employees may start feeling the financial strain as well, as Japanese media outlets report that employees of the struggling company may be asked temporarily freeze pay increases.
Sharp Corp. may have hurt its positioning in the competitive LCD market when it failed to supply Apple (News - Alert) with LCD panels for the first shipment of Apple’s new iPads, expected to be on sale in major markets around the world starting Friday, March 16. According to the Wall Street Journal, the first shipment of iPads will feature LCD panels produced by Samsung and LG Display Co.
Edited by Braden Becker