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

Ex­press Sup­port

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.

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