HTC said to sell its Shanghai plant
Smartphone giant HTC Corp. ( ) will sell off its manufacturing facility in Shanghai and initiate a second wave of layoffs before the end of this year, according to a local report published yesterday. According to Next Magazine (
), HTC is shutting down two production lines in Shanghai. The facility will be sold to a Chinese firm and the terms of the transaction have been confirmed.
HTC set up a 146,667-squaremeter factory in the Pudong New Area of Shanghai in 2009 with an initial investment of NT$1.05 billion (US$32.3 million) to cater to the fast-growing smartphone market in China, Next Magazine reported.
HTC said yesterday it would not comment on market rumors or speculation and stressed its statement made earlier.
Through definitive organizational restructuring, active execution and efficient governance principles, the new measures will lead to the company’s sustainable development and it gaining profitability, HTC said.
Under a holistic lean man- agement scheme, HTC aims to cut down operation costs by 35 percent, part of which entails a 15- percent global workforce reduction. Reductions will be carried out until the end of the year, the company said.
HTC Chairwoman Cher Wang ( ) said “HTC is a company teeming with innovation. The company has a workforce willing to be creative. The company integrates software and hardware expertise, cutting- edge technology and excellent design capacity that leads the world.”
“We are actively pursuing developments in various fields other than the smartphone. We need a highly flexible and energized workforce, to ensure we grasp all opportunities and advantages in the field of a connected smart life.”
The new operation scheme will make sure every department has set clear goals, the right resources and talent so that they may achieve success in the brave new market, Wang said.
Institutional investors in general are positive about HTC’s potential manufacturing facility sell-off.
When its capacity utilization goes down, a plant becomes an idle asset. Since the asset can still be very costly to operate due to depreciation and other expenses, getting rid of it will be beneficial for companies without the best fundamentals, an institutional investor said.
As enterprises go through restructuring, besides laying off people, liquidating asset is a good approach to trim down costs, the source remarked. HTC shares dipped 0.2 percent to close at NT$49.35 yesterday in Taipei trading.