Wales Aiwa factory 'could close'

Japanese electronics company Aiwa is to halve its worldwide work force to about 5,000 within the year and a factory in Wales could close, according to a report in Tokyo today.

The company would combine its operations into one factory as part of efforts to survive a global slowdown, a company spokesman said.

Hurt by dropping demand for the company’s products, the Sony Corp subsidiary will also cut back output of unprofitable televisions and other items, shifting to more profitable digital products, including a portable audio player, said Aiwa spokesman Masahiro Ashino.

Aiwa estimates the restructuring will reduce annual sales by about 30% to approximately £1.1bn in the fiscal year 2002 from the current £1.6bn.

Aiwa’s decision was made based on increased price-cutting competition from manufacturers in China, Ashino said.

The company will by March 2002 shift operations from its main factories in Iwate prefecture (state) in northern Japan, Malaysia and Indonesia into one factory, Ashino said.

The company has yet to choose that location, he said.

Aiwa employs 2,600 workers in Japan, while 7,400 people work at four overseas plants, including one each in Malaysia and Gwent, south Wales, and two in Indonesia.

Under the restructuring plan, Aiwa will also ‘‘close out’’ six other smaller factories, including the one in Wales, according to a news agency report sourced in Tokyo.

However, a company spokesman in the Japanese capital said today that eight or nine factories around the world would close, but they had not decided on which ones.

Aiwa, established in 1951, is owned 50.5% by Sony.

Earnings at Japanese manufacturers have eroded as consumers jittery about Japan’s decade-long economic slump refuse to spend. The outlook has become more bleak as the country’s nascent recovery appears to have skid to a halt.

Making matters worse, exports to the United States Japan’s largest trading partner have started to slow.