The restructuring that Sony announced on Tuesday – 8,000 job losses plus another 8,000 temporary workers, with five or six factory closures – has been criticised as light on specifics. The goal is to save Y100bn in the 2010 financial year, but there is no estimate of the cost, and little detail on which factories will close.Until Sony makes its intentions clear, all of its factory employees will feel under threat, but a few more details have now emerged.
We knew the first factory that is closing: the DAX Technology Centre in France which makes videotape. The other European sites – in Wales, France, Spain, Austria, Slovakia and Hungary – are probably at low risk because it would be perverse to respond to a fall in European currencies by closing down European manufacturing.
Now we know No 2 – Sony Electronics Inc said on Tuesday night that it would close its Pittsburgh Technology Centre in the US with the probable loss of 560 jobs. Pittsburgh builds and repairs LCD televisions. Sony’s other sites in the Americas are mainly in Mexico and Brazil, although employees at Dothan in Alabama, which makes magnetic tape, may look at their counterparts in France and worry.
So which are numbers 3, 4, 5 and 6? Of Sony’s remaining manufacturing sites, 28 are in Japan, and 17 are elsewhere in Asia. If the goal is to save costs then Japanese sites must surely be the ones to go.
Sony’s Japanese manufacturing spans the range of its business from electronics to batteries to videotape and semiconductors. Which sites it closes will depend, first, on which “unprofitable businesses” it decides to exit, and second, on which low-tech manufacturing it feels happy to outsource or move abroad.
Sites at risk must include at least one of the five Japanese chemical plants that make films and tapes, and one of the four that make batteries. The sudden closure of one of the five semiconductor plants may be less likely, despite low profitability, because of their place in the supply chain and the capital investment they embody.
If Sony is really determined, however, it will close one of its ten TECs, the plants that make its consumer electronics products. Obvious targets are:
- The Nagano Tec, with 640 employees, which makes Vaio laptops and peripherals
- One of the Kohda and Minokamo Tecs, which both make video and digital cameras
- The Ichinomiya and Inazawa Tecs, with 800 and 300 employees respectively, which make televisions and projectors
Local newspapers in the Chubu area, where many of the Tecs are located, are quoting fearful contract workers at those factories who say they have heard nothing so far. Sadly, that may not be the case for long.
