Hitachi Electronic Devices: jobs go at CRT plant

Hitachi Electronic Devices (HED) has reacted to a significant drop in projection CRT prices in 2003 by closing a line at its Greenville, South Carolina plant with the loss of 220 jobs and the firm is …

Hitachi Electronic Devices (HED) has reacted to a significant drop in projection CRT prices in 2003 by closing a line at its Greenville, South Carolina plant with the loss of 220 jobs and the firm is also cutting sales staff at Norcross, Georgia. HED thus becomes the latest CRT manufacturer to cut jobs in the face of a falling market. In the second week of December 2003, Corning warned of the potential for an after-tax impairment charge of up to USD 100 million against 4Q earnings related to its CRT joint venture with Samsung. HED will cut 200-205 jobs by closing the production line, bringing the plant workforce down to 550 said VP-General Manager Lawrence Davis, adding that the two remaining lines will continue producing 7″ CRTs in 7-day, 12- hour shifts. Other job cuts were made through the closure of the Atlanta sales office. In 2002, direct-view CRT production at Greenville was stopped in a move that reduced the workforce by 270. CRT prices have dropped 12% since the beginning of 2003, nearly double the anticipated fall, said sources. “The Greenville layoffs were essentially due to the economy,” a source close to Hitachi said. “It“s not that picture tubes are going away, but sales have been terrible this year and the price is dropping much quicker than what anybody anticipated.” HED and other tube suppliers have come under pressure from Techneglas, the sole remaining TV glass supplier in the U.S., which did not lower its prices, and TV set manufacturers, who wanted lower costs, sources said. Techneglas“ main rival, Corning Asahi Video, closed its factory in State College, Pennsylvania, in September. In an effort to boost its declining CRT business, Hitachi unveiled a new preassembled projection tube and lens module for drop-in assembly to make the manufacturing of rear-projection TVs more efficient. The Tsunami system, which combines up to 110 individual components into a single module, was to start production in the 3Q 2003. However, production was delayed as HED sought to sign an agreement with a customer. HED is said to be close to a letter of intent with a potential customer, but no agreement has been signed, sources said. Also under consideration is the assembly of LCoS-based rear-projection TVs at the Greenville plant, but that is unlikely for 12-18 months, Davis said. Hitachi has developed 0.9″ and 0.7″ LCoS panels. The rapid downturn of the CRT market also caught Corning by surprise, Vice Chairman James Flaws told investors at the CSFB Technology Conference in Scottsdale, Arizona, in early December. Samsung Corning Co. has been a “big disappointment” in 2003 and “we didn“t expect the market to turn as quickly as it has,” he said. Corning did not reveal whether the up-to-USD 100 million charge would result in plant closures or workforce reductions. The joint venture has manufacturing facilities in China, Germany, Malaysia and South Korea.