Japan Electric Cable Makers Plan Several Thousand Staff Cut

Japanese major electric cable makers, Furukawa Electric and Mitsubishi Cable Industries announced emergency measures to minimize constant costs along the recent order receipt conditions this week, including staff cuts by several thousands at home and overseas, and integration of productive activities. Their profitability is seriously impacted by output reductions and inventory adjustments in automobile and electric appliance industries.

Masao Yoshida, president of Furukawa Electric, explained at a press conference on Monday the firm expects cost cut effect of 10 billion yen by emergency measures launched in and after October 2008, 6 billion yen generated mainly by staff cut and 4 billion yen by accounting impairment loss for low-profit productive facilities. The firm plans to downsize the employee number by several thousands at overseas and about 700 in domestic sites. Impairment will be accounted for an offshore telecommunication subsidiary and a domestic automotive part subsidiary.

Meanwhile, Furukawa Electric plans integration of domestic productive activities. The firm would cease bare copper wire production at Chiba works and integrate the operation to Mie works. Tin-plate copper strip production would be integrated into Mie, ceasing the operation at Nikko works. UV tape production will be suspended in Mie works and integrated to Hiratsuka works. Plastic foamed products would be shifted from Hiratsuka works to the group companies such as Riken Electric Wire.

Mitsubishi Cable Industries plans staff cut in the automotive parts business to 2,200 at the end of March 2009 from 5,000 at the end of September 2008, including temporary and contract employees at home and overseas. The firm will downsize the staff number at Dalian subsidiary, the main plant of automotive wiring harness and components, from 2,850 to 1,050.

The firm also plans reorganization of automotive wiring harness operations between Dalian and Indonesia subsidiaries to integrate large-current wiring harness into Indonesia and sub harness into Dalian. Along the reorganization and the order receipt plunge, the firm examines to account impairment loss for no.1 factory among 2 factories at Dalian.

Toshihiko Igarashi, president of Mitsubishi Cable Industries, said at a press conference on Tuesday the firm aims to bring the automotive and optical component business unit into break even through fiscal 2009 starting April. The firm estimates consolidated net sales of 33 billion yen and operating loss of 4.2 billion yen for the business unit through fiscal 2008. Mr. Igarashi said order receipt volume of automotive wiring harness has halved since November 2008.