Sharp mulls selling plants in China, Mexico

PanARMENIAN.Net - Japan's embattled Sharp is considering selling television assembly plants in China and Mexico and shedding 3,000 jobs, boosting the number of planned payroll cuts to 8,000, reports said Tuesday, Aug 21.

Sharp is mulling the sale of the two factories as part of talks with Taiwanese partner Hon Hai Precision Industry, AFP reported citing Dow Jones Newswires and the Yomiuri newspaper.

Sharp could sell the factories to Hon Hai, or to Sharp Display Products, the Japanese company's joint venture with Hon Hai chairman Terry Gou, Dow Jones quoted a source as saying.

The Chinese factory has about 1,500 workers, while the Mexican plant has another 1,500, according to Sharp. Both factories assemble large-screen TV sets.

Sharp would not confirm the report, only saying it was cooperating with Hon Hai on the business of large liquid crystal displays (LCDs).

"Regarding production of LCD TVs we are exploring what to do for the best in the overall cooperation," the Japanese company said in a statement.

The jobs Sharp could shed would bring the number of payroll cuts at the group to 8,000, or about 15 percent of its global workforce, including 5,000 workers the company has earlier said should go.

Sharp said this month it would cut 5,000 jobs by March as it reported a April-June loss and said it would remain in the red for the rest of the year amid losses at its struggling TV business.

The company, which has seen its mainstay television, LCD and solar panel products struggle, said the job reductions were part of a bid to cut fixed costs by 100 billion yen to help its dented balance sheet.

Earlier this year Sharp announced a tie-up with Hon Hai Precision in a bid to turn around its business, aiming for improved efficiency.

The Taiwanese firm, better known as Foxconn, which assembles Apple products in China, including the iPad and iPhone, agreed to take a 10 percent stake in Sharp for about $800 million.

With Sharp shares diving to a near 40-year low this month, the Taiwanese giant was aiming for a bigger equity stake now, according to recent media reports.