Tokyo, August 26, 2009 – Following today’s meeting of the Board of Directors, SANYO Electric Co., Ltd. (SANYO) made the decision to implement structural transformations as follows.
1. Reasons for Implementing Structural Transformation
Starting from the 2nd half of the fiscal year ended March 2009, SANYO has implemented cost reduction activities and activities to boost business efficiency improvement across all businesses to handle the worsening business environment caused from rapidly shrinking market. Due to the forecast for the economic situation to remain uncertain and the SANYO Group’s changes in its business portfolio made in response to the changing market environment, SANYO understands the necessity of and plans on further strengthening management practices and shifting management resources to strategic businesses aiming at increased expansion. As a result, in order to achieve and maintain continuous income hereafter, SANYO has decided to make additional business structural transformations.
First of all, SANYO will implement structural transformation in the organization such as transferring production to overseas and withdrawing some businesses for the Commercial Solutions Company and the Electronic Device Company, in addition to overhauling back-office, or corporate, functions across the businesses. Secondly, SANYO will redeploy the redundancy in positions that comes from the structural transformation to strategic businesses on the premise of ensuring job security. Thirdly, SANYO will prepare a Special Career Support Plan to offer the support needed by any employees seeking to start a new career outside of SANYO.
2. Outline of Structural Transformation
1) Main Structural Transformation Contents
Commercial Solutions Company
- Withdraw from producing in-house SANYO-branded consumer-use air conditioners (except for products for the Chinese, Europe and North American markets), transfer production of all-in-one air conditioning system (PAC) for markets outside Japan to overseas, and accelerate PAC product development by concentrating and pooling resources.
- Transfer the production of some models of showcases overseas.
- Adjust the business scale of the consumer service business in Japan.
Electronic Device Company
・ Transfer production of POSCAP after processes from the Daito Factory in Osaka, Japan to overseas and promote the development of new products.
・ Withdraw from the non-custom LED business and concentrate resources on LED business for lighting solutions.
Overall back-office sections (Corporate HQ and Operational Divisions)
・ Create and expand new businesses and strengthen functions for balance improvement for current businesses.
・ Streamline and optimize overall back-office and indirect functions.
Regarding the corporate and indirect redundancy expected from these reorganizations, SANYO will redeploy the personnel to the strategic businesses on the premise of ensuring job security.
2) Special Career Support Plan
SANYO will prepare a Special Career Support Plan for employees seeking jobs or another career outside SANYO that retire from the company on their own will.
1) Targeted group: Employees, aged 45 or older, in the mentioned business divisions above, with over 10 years at SANYO.
2) Application term: From September 7, 2009 through September 17, 2009
3) Retirement date: September 30, 2009
4) Preferential treatment: Additional payment to the normal retirement allowance.
Job-replacement assistance with a third party company offered for employees desiring career counseling support.
3. Future Outlook
The SANYO Electric Group will implement structural transformation for both the parent company and affiliate companies. The costs incurred from these restructuring and reorganization plans will be reflected in the financial results for the fiscal year ending March 31, 2010. SANYO will also disclose the effects to the financial results as soon as they have been determined.