Toshiba to End Mobile Phone Production in Japan

May 20, 2009
Will outsource manufacturing but hold onto product development and design

As part of efforts to recover from its biggest ever loss, Toshiba Corp. said on May 20 that it would stop making mobile telephones in Japan. The company will end production of mobile phones at its Hino plant in western Tokyo in September and outsource the manufacturing to overseas firms.

"As the result, we will finish our production of mobile phones in Japan although product development and design will continue at our Hino plant," said Toshiba spokesman Keisuke Omori. "It's part of our effort to reduce fixed costs and achieve profit as we are facing a tough period," Omori said, adding that it had no plan to cut any jobs as a result of the move.

Toshiba logged a record loss of 343.6 billion yen ($US3.6 billion) in the year to March, hit by weak demand and a stronger yen. It suffered losses on its mobile phone business for the first time in five years, as sales halved from the previous year to some three million units.

The Hino plant initially opened in 1964 to produce telecommunications products and shifted its output to mobile phones in the mid-1980s.

Toshiba will continue producing mobile phones at its Chinese plant. The spokesman declined to say which companies would receive the outsourcing work.

Copyright Agence France-Presse, 2009

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