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Mexico Manufacturing

Sharp considering selling its Mexico TV plant

Mexico ManufacturingBy Adina Moloman

Sources: Reuters, The Wall Street Journal

Sharp Corp is suffering huge losses and is considering cutting 3000 jobs, most possible through the sale of the company’s television assembly plant in China and also from its Mexico Manufacturing television plant.  The two TV plants are probably about to be sold to Taiwanese partner Hon Hai Precision Industry Co.

Another 5000 group-wide job cuts previously where announced. A total of 8,000 possible jobs cuts are a consequence of a total debt of 1.25 trillion yen to its lenders Mizuho Financial Group and Mitsubishi UFJ Financial Group. These two financial groups are putting a lot of pressure on SHARP which is why the company might renegotiate terms of an investment by Taiwan’s Hon Hai Precision Industry. Sharp might maintain its core business which is liquid crystal display (LCD) panel, and sell other related sharp operations as screens for Apple Inc’s iPad and iPhone.

Part of their crisis is due to the shrinking demand for its sets and lower than anticipated income for smaller LCD screens used in tablet PC, facing hash competitors from Sony Corp., Panasonic Corp. and Samsung Electronics, the last one has gained important market share.

Taiwan’s Hon Hai Precision Industry or better known as Foxconn, gained presence in Mexico back in 2008 when the same group bought the Sony Plant in Tijuana. So, the whole actual situation might not affect Mexico with a huge job losses, probably is just about a company’s restructuring plan, new owners new rules. It’s almost a fact that Hon Hai is about to double its stake in Sharp to about 20 percent from a 9.9 percent agreed in March, according to the Nikkei business daily.

Sharp Corp “needs to refinance as much as 360 billion yen ($4.54 billion) of short-term commercial paper and will need an additional 200 billion yen in September next year to cover a maturing convertible bond” according to a source from the Wall Street Journal.

So far Sharp Corp. hasn’t presented any official declaration on whether it is considering selling some of its operations to get back on its feet.

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