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Updated: 2009-09-02 07:45
(HK Edition)
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TOKYO: Taiwan's Hon Hai Precision Industry will buy Sony Corporation's biggest television making factory in North America, the Japanese electronics maker announced yesterday.
Sony is struggling to cut costs and stem massive losses.
Hon Hai will pick up 90 percent of Sony's stake in Sony Baja California, located in Tijuana, Mexico.
The maker of Bravia flat-panel TVs and Cyber-shot digital cameras lost over $1 billion last fiscal year, its first annual red ink in 14 years. It is forecasting an even worse 120 billion yen ($1.3 billion) loss for the fiscal year through March 2010.
Sony said in a news release the move is not expected to affect the company's balance sheet, but is part of continuing efforts to cut costs by outsourcing manufacturing.
The company is not commenting on the price of the sale, spokeswoman Mami Imada said. The deal is expected to be finalized by March.
Hon Hai, the world's largest contract maker of electronics, gained 6.8 percent to close at NT$118.5 on the Taipei Stock Exchange yesterday, the highest level since August 29, 2008. The Taipei-based company Monday posted its first profit increase in five quarters, beating analysts' estimates. Second-quarter net income rose 27 percent to NT$15.1 billion ($459 million) from a year earlier.
Sony makes most of the LCD TVs it sells in North America at the Tijuana plant, and will continue to do so on an outsourcing basis after the sale, she said.
The plant's 3,300 workers will not be affected by the sale.
AP
(HK Edition 09/02/2009 page2)