The Honda Motor Company is set to take a stake in Pioneer Electronics who early next month will announce losses of A$2 billion – less than what was originally projected.
Pioneer has also confirmed that they are set to lay off additional staff as subsidiaries in overseas countries such as Australia are overhauled and restructured.
The company, who earlier this year quit the plasma market, is also tipping that by 2012 they will make a small profit primarily from car audio and that by 2012 they will have revenues of $3.2 billion and operating income of around $155 million. 45 percent of sales will be via their OEM operations.
The speed of the changes is critical because Pioneer projected another loss of $858.2 million in fiscal year 2010, but net profits of $82.7 million in fiscal 2011 and $165.4 million in fiscal 2012.
The US$25.8 million investment from Honda is through a third-party allotment of shares to the Japanese car maker, Pioneer said. They have also said that it is critical that they raise an additional$413.6 million “promptly and steadily” if they are to reach their projected profits.
TWICE Magazine said as part of operations review, Pioneer plans to lay off around 5,800 regular employees and about 4,000 temporary and contract employees. It will also cut the number of directors/executive officers from 25 to 19 after the annual general meeting of shareholders to be held in June 2009.
On the product side, Pioneer will form a joint venture in the optical disc business with Sharp with “the aim of restoring this business to profitability and by taking advantage of the strengths of both companies.” Details are forthcoming, but they plan to establish the venture by October 1.
With its departure at the end of this fiscal year from TVs, Pioneer’s home electronics business will centre on home AV products, DJ equipment and cable TV set-top boxes.
In the car electronics area, Pioneer and Mitsubishi Electric have agreed to jointly develop hardware and software for use in car navigation systems and car AV products. The two companies have mutually used certain car navigation software technologies since 2002.
Pioneer projected home electronics sales for fiscal 2012 at $754.8 million, with operating income to be $31 million.