Panasonic Names Tsuga President After Predicting Record Loss
Panasonic Corp. (6752), Japan’s largest appliances maker, named Kazuhiro Tsuga as president three weeks after forecasting a record net loss because of slowing demand for TVs and production halts caused by floods in Thailand.
Tsuga, 55, will replace Fumio Ohtsubo, 66, who will become chairman, the Osaka-based company said in a statement today. Tsuga, now a senior managing director and president of the audio-visual products unit, will take over the presidency after getting shareholder approval at June 27 general meeting.
Panasonic, which forecast a 780 billion-yen ($9.7 billion) loss in the year ending March 31, joins Sony Corp. (6758) in nominating a younger leader amid worsening earnings as the electronics makers struggle to turn around money-losing TV operations and cope with the stronger yen. Earlier this month, Tokyo-based Sony named Kazuo Hirai, 51, as its incoming president and chief executive officer to replace incumbent Howard Stringer.
“A younger president is promising as it shows commitment to speed up reform, move away from old culture and become competitive again,” said Naoki Fujiwara, who helps oversee $6 billion at Shinkin Asset Management Co. “The most important assignment for the new president will be to cut down the scale of TV operations and boost profits from energy and smart-house related businesses.”
Tsuga joined the maker of Viera TVs in 1979 and was promoted to executive officer at the age of 47, according to Akira Kadota, a Panasonic spokesman. Tsuga helped develop DVD recorders and headed the automotive systems unit before taking over the audio-visual products unit in April.
The shares fell 0.4 percent to close at 748 yen in Tokyo trading before the announcement, narrowing its gain this year to 14 percent. The stock has lost more than 60 percent of its value since June 2006, when Ohtsubo became president.
“We plan to revive earnings and drive growth by pursuing the goal of becoming an innovative environment company,” Tsuga said in an Osaka news conference today.
Ohtsubo said he was eliminating jobs, shifting output overseas and closing display factories in an attempt to transform Panasonic into a leader in solar panels and rechargeable batteries amid mounting competition in TVs.
The maker of Lumix cameras on Feb. 3 almost doubled its loss estimate for the current fiscal year, partly because of goodwill writedown charges stemming from its purchase of Sanyo Electric Co.
The world’s biggest maker of plasma TVs bought a controlling stake in Sanyo, Japan’s largest maker of rechargeable batteries, in 2008 and made it a wholly-owned company last year to accelerate its expansion in battery businesses. It also merged Panasonic Electric Works, which makes lighting systems, electrical wiring fittings and electronic materials, last year.
Chairman Kunio Nakamura will become an adviser, the company said.
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