Aiwa to slash workforce

The company blames competition from China

Japanese electronics maker Aiwa is to cut about 5,000 jobs, close plants, and merge operations in an attempt to survive the global slowdown.

"Due to sluggish demand caused by the slumping US economy, we have decided to put in place a drastic restructuring plan to pursue profit instead of revenues," Aiwa president Masayoshi Morimoto said.

The company, controlled by Sony, employs about 2,600 workers in Japan, while 7,400 people work at overseas plants in Malaysia, Indonesia and Wales.

Operations at the factories in Japan, Malaysia and Indonesia will be merged into one factory, the company said. But it would not be more specific.

"We are now considering which plants will be closed," said Masahiro Ashino, a spokesman for the Sony subsidiary.

Union leaders at Aiwa's UK plant at Newbridge were on Tuesday morning seeking urgent talks with the electronics giant to try to get the full picture.

"The factory is a vital source of employment in Newbridge and we cannot afford to lose jobs," said AEEU regional spokesman Rogers James.

Competition from China

Mr Ashino also commented that the company had been hurt by a fall in demand for its products, especially unprofitable televisions, and it would be shifting production to more lucrative digital products.

That includes a portable audio player.

The restructuring is expected to reduce Aiwa's sales annually by 30% to 200bn yen ($1.6bn) from 300bn yen ($2.4bn).

The company says it is having to take such drastic action as it faces increased price-cutting from manufacturers in China.