Panasonic CEO vows to close money-losing businesses

TOKYO: Panasonic Corp chief executive officer Kazuhiro Tsuga says he is getting serious about profits.

Chronically money-losing businesses and operations that have little prospect of healthy profit margins will have to go, said Tsuga at a briefing, here, yesterday, declining to name specific divisions.

The company will end production of some products, such as the liquid crystal display withdrawal announced on Thursday, while other units could be combined. It also plans a wave of consolidations in far-flung bases from Latin America to Europe and Japan.

Panasonic is targeting 100 billion yen (RM3.8 billion) in savings in the fiscal year ending March 2022.

Reduction in personnel costs through natural attrition and retirement plus trimming and consolidation of operations will contribute 30 billion yen each. Closing unprofitable businesses will save another 40 billion yen.

Its stock, which is little changed from early this year, ended 1.5 per cent lower yesterday.

“Our mid-term goal is simple — breaking out of this low-profitability state,” said Tsuga in a media address ahead of Panasonic’s annual IR Day. “We will eradicate losses, starting with operations that are structurally unprofitable.”

Tsuga has promised to steer the now 100-year-old company away from money-losing consumer electronics to focus on housing, car information systems and batteries for electric cars, including for Tesla Inc.