TMCnews Featured Article

Hamstrung by a down economy that’s hit the consumer electronics market especially hard (netbooks and BlackBerry (News - Alert) smartphone sales notwithstanding), the world’s largest maker of plasma TVs today posted a $4 billion loss for the fiscal year ended March 31.

 

Officials at Japan’s Panasonic Corp. say overall sales fell 19 percent compared to the prior 12 months, leading to the CE giant’s first loss in seven years.

 

Echoing a bitter sentiment sounded by Japan’s number one chip-maker – Toshiba Corp., which posted a record annual loss earlier this month – Panasonic (News - Alert) pointed directly to the U.S. subprime loan-fueled credit freeze last fall, which led to a domestic recession that quickly spread internationally.

 

“During the year under review, the current financial crisis, which originated in the

United States, spread across the world and the company’s outlook of the business environment was extremely uncertain,” Panasonic said. “The company’s business conditions worsened considerably from last October, due mainly to the sharp appreciation of the yen, rapidly shrinking demand worldwide and ever-intensified price competition.”

 

In advance of the announcement, Panasonic had said it aims to lay off about 5 percent of its 300,000-man workforce by next spring, and reportedly plans to close 40 production facilities, too.

 

Even so, Panasonic said it doesn’t expect to be out of the red by the end of next March.

 

The company said it expects to encounter severe conditions because two trends are developing simultaneously. The first is the global recession and shrinking demand, and the second is the expansion of emerging markets that’s fueled a shift in demand to lower-priced products.

 

“Under these environments, the company will rebuild its management structure thoroughly, as well as make preparations for the next phase of development and growth simultaneously, aiming to be in a strong position when the market recovers,” company officials say. “Although the management environment of the final year of the GP3 plan will be different from the conditions that we previously expected, the company will not change the direction of the GP3 plan.”