35SV Paragon M. C47

 

TIDM35SV 
 
RNS Number : 2283N 
Pioneer Corporation 
12 February 2009 
 

For Immediate Release 
February 12, 2009 
Pioneer Announces Restructuring Measures 
TOKYO - Pioneer Corporation has announced that at a meeting of its Board of 
Directors held today, the Company approved new restructuring measures. Details 
are as follows. 
 
 
I. Progress with Restructuring Measures Currently Under Way 
Pioneer has been implementing restructuring measures mainly to improve 
profitability in the display business since 2008. These measures have included 
termination of in-house plasma display panel production and implementation of 
early retirement programs including personnel in administrative and sales 
divisions. Overseas, we have started to streamline our sales structures and have 
decided to close plasma display production facilities. Plans call for ending 
production at our U.S. and U.K. display production facilities in April and 
February 2009, respectively. Pioneer expects to complete these restructuring 
measures within the first half of 2009. 
 
 
Pioneer's consolidated workforce decreased by approximately 5,900 employees from 
March 31, 2008 to roughly 36,900 employees as of December 31, 2008. The number 
of temporary employees also decreased by approximately 4,000 in the same period. 
 
 
However, Pioneer has been affected significantly by dramatic changes in economic 
conditions since the fall of 2008-an impact that has far outweighed the benefits 
being generated by the aforementioned restructuring measures. Pioneer is now 
forecasting a record net loss for fiscal 2009, the year ending March 31, 2009. 
 
 
II. New Restructuring Measures 
For these reasons, Pioneer will implement new restructuring measures as detailed 
below. 
 
 
1.Business Portfolio Realignment 
Pioneer will realign its business portfolio through further drastic 
restructuring measures in the Home Electronics business, an area where the 
Company has been unable to achieve improvements in profitability despite 
implementing various initiatives. Through this process, Pioneer aims to 
transform itself into an enterprise centered on the Car Electronics business. 
 
 
(1)Home Electronics Business 
Pioneer will terminate any further in-house display product development after 
its products currently available on the market, and withdraw from the display 
business by March 2010. Recent market conditions have changed far more than 
initially anticipated, and Pioneer has decided to withdraw from the display 
business after concluding that there are no prospects for improving 
profitability under current conditions. However, the Company will continue to 
provide after-sales services even after the withdrawal. 
 
 
In the optical disc business, we are considering measures for improving 
profitability, including forming a joint venture. 
 
 
Looking ahead, Pioneer will develop Home Electronics business centered on three 
areas, namely audio products, DJ equipment and cable TV set-top box businesses. 
We will focus on our specialization in "sound," as we take advantage of our 
extensive audio technologies and expertise developed over the years to develop 
new business domains. 
 
 
(2)Car Electronics Business 
The Car Electronics business, both in consumer and OEM business areas, is 
currently severely affected by lower demand for automobiles due to weakening 
economic conditions. Lackluster auto demand is expected to continue for some 
time, but should see signs of recovery in fiscal 2011, the year ending March 31, 
2011. Looking to the future after this, Pioneer expects growing demand for 
higher levels of environmental performance and energy efficiency in the 
automotive field. Pioneer will shift business resources from display field into 
the Car electronics business, and leverage its market position and technological 
expertise, to open up a range of new business opportunities. 
 
 
First, Pioneer will expand new lineups, including Blu-ray Disc compatible models 
and network-ready products, as well as strengthen the telematics business. In 
the medium term, we will aim to develop the telematics business into a key 
growth engine for the Car Electronics business. 
 
 
In the consumer business, Pioneer has been working to expand business in 
emerging markets centered on the BRICs nations, and these efforts are steadily 
producing results. Although these markets are currently experiencing stagnant 
growth due to worsening economic conditions, the Company will strengthen its 
efforts to stimulate demand in these markets in order to revive growth in these 
markets and to offset contraction in the Japanese, U.S. and European consumer 
markets. 
 
 
In the OEM business, Pioneer will work to win a broader range of orders, 
especially in the car navigation business. With this aim, Pioneer will 
vigorously propose new value-generating solutions to automobile manufacturers by 
leveraging its expertise in consumer markets, where the Company has won high 
acclaim for its network compatibility and introduction of high added-value 
products. 
 
 
Pioneer will strive to enhance the operating structure of the Car Electronics 
business primarily by reducing costs and reviewing its business structure, in 
order to generate earnings in challenging market conditions. In software 
development for car navigation systems, which is an area with burgeoning costs, 
we will simplify processes in order to raise development efficiency. At the same 
time, we will promote the use of common hardware platforms, thereby curbing 
development expenses related to both hardware and software. To this end, Pioneer 
is discussing possible collaboration with other companies. In other areas, 
Pioneer will also reduce costs to ensure that the Company steadily improves 
profitability. For example, we will work to lower distribution costs; raise 
production efficiency by consolidating production facilities for the entire 
Pioneer Group, and overhaul sales structures. 
 
 
Although a difficult business environment is expected to persist for some time, 
Pioneer will work to complete enhancing its operating structure as early as 
possible and lay a firm foundation for new growth after market conditions 
improve. 
 
 
2.    Streamlining the Business Framework of the Entire Pioneer Group 
Pioneer will take action to streamline the business framework of the entire 
Pioneer Group. We will consolidate our network of production facilities in Japan 
and overseas by taking the following actions: we will withdraw from the display 
business; review our production system in the Car Electronics business to 
achieve optimum efficiency; and consolidate production facilities as part of 
ongoing efforts to integrate the speaker business. We intend to reduce our 
current 30 production companies around the world by roughly 30% in number in 
order to reduce production costs. 
 
 
Regarding our sales structures, we are currently formulating detailed plans to 
adjust our sales framework to match the business scale in line with 
restructuring measures in the Home Electronics business. These plans include an 
overhaul of sales structures in Japan and overseas. 
 
 
In addition, we plan to adjust headquarters and R&D functions to a scale that 
matches the new business structure. 
 
 
Through these measures, we plan to reduce personnel by around 6,000 employees 
worldwide compared with our workforce as of December 31, 2008, including 
restructuring measures currently in progress. To this end, we will begin 
discussions with labor unions in various regions. In addition, we plan to reduce 
the number of temporary employees by approximately 4,000. 
 
 
3.    Improving Our Financial Position 
Pioneer will work to improve its financial position by reducing inventories, 
accelerating trade receivables collections, curbing capital expenditures, 
selling idle assets, and cutting directors/executive officers' remuneration and 
employees' salaries. Basic portion of directors/executive officers' remuneration 
has been reduced since July 2008, and beginning in February 2009 the reduction 
will be some 20% to 50% until March 2011. No bonus payments for 
directors/executive officers will continue. We are also considering financial 
partnerships for enhancing our future financial position. 
 
 
4.    New Businesses for Future Growth 
We are working to identify new businesses that will drive future growth. Pioneer 
holds a number of superior technologies, including next-generation hard disk 
manufacturing equipment based on optical disc production and fine processing 
technologies, as well as high-value-added electronic components using 
ultra-sensitive imaging elements. We will work hard to commercialize these 
technologies for industrial use as early as possible. Pioneer is also working 
hard to achieve further growth through creating new businesses such as 
developing products built into homes and research into "sound" in daily life, in 
addition to just conventional ordinary home-use electronics products. 
 
 
 
 
Through the above restructuring measures, Pioneer is determined to restore 
profitability. Full details on these restructuring measures will be announced 
once they have been finalized. 
 
 
 
 
Cautionary Statement with Respect to Forward-Looking Statements 
Statements made in this release with respect to our current plans, estimates, 
strategies and beliefs, and other statements that are not historical facts are 
forward-looking statements about our future performance. These statements are 
based on management's assumptions and beliefs in light of the information 
currently available to it. We caution that a number of important risks and 
uncertainties could cause actual results to differ materially from those 
discussed in the forward-looking statements, and therefore you should not place 
undue reliance on them. It is not our obligation to update or revise any 
forward-looking statements, whether as a result of new information, future 
events or otherwise. We disclaim any such obligation. Risks and uncertainties 
that might affect us include, but are not limited to: (i) general economic 
conditions in our markets, particularly levels of consumer spending; (ii) 
exchange rates, particularly between the Japanese yen and the U.S. dollar, the 
euro, and other currencies in which we make significant sales or in which our 
assets and liabilities are denominated; (iii) our ability to continuously design 
and develop highly rated products and services in extremely competitive 
markets, which are characterized by continual product launches, rapid 
technological development, intense price-based competition, subjective and 
changing consumer preferences and other factors; (iv) our ability to 
successfully implement our business strategies; (v) our ability to compete, as 
well as develop and implement successful sales and distribution strategies, in 
light of technological developments in and affecting our businesses; (vi) our 
continued ability to devote sufficient resources to research and development, 
and capital expenditure; (vii) our ability to continuously enhance our brand 
image; (viii) the success of our joint ventures and alliances; (ix) the success 
of our business restructuring plans; and (x) the outcome of contingencies. 
 
 
Pioneer Corporation is a leading global manufacturer of consumer- and 
business-use electronics products such as audio, video and car electronics. Its 
shares are listed on the Tokyo Stock Exchange. 
 
 
 
 
# # # # # # 
 
 
 
 
For further information, please contact: 
Investor Relations Department, Corporate Communications Division 
Pioneer Corporation, Tokyo 
Phone: +81-3-3495-6773 / Fax: +81-3-3495-4301 
E-mail: pioneer_ir@post.pioneer.co.jp 
IR Website: http://pioneer.jp/ir-e/ 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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