Panasonic to shut three plants; may report net loss

29 January 2009

Panasonic said yesterday said that it would cut 560 jobs in Asia because of the closure of some plants in the region, but declined to comment on a report saying the Japanese electronics giant will suffer its first net loss in six years.

Panasonic Corp is likely to report an annual net loss of about 100 billion yen ($1.1 billion) on restructuring charges, weak demand for consumer electronics and the effects of the strong yen, the Nikkei business daily said without citing sources. It would be the first net loss in six years for the company, formerly known as Matsushita Electric Industrial Co Ltd.

Panasonic also plans to close three plants, including two of its three plants that make electronics parts in Malaysia. The third plant to be closed is in the Philippines. Panasonic spokesman Kunio Ichikawa said the company will announce its quarterly results on February 4, which may or may not include a revision to its earnings outlook.

About 500 workers at the Malaysian electronics parts plant in Malacca will be out of work, while some 60 employees at the Philippines battery factory also will lose their jobs, according to another company spokesman.

Panasonic also runs two electronics parts plants in the central Malaysia state of Selangor, which would be merged them into one by September. He but that added the move would not result in job losses.

The closures come as Panasonic is in the middle of a $9 billion takeover of smaller Japanese rival Sanyo Electric to become one of the world's biggest electronics companies.