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Kenwood will merge five U.S.-based subsidiaries on Oct. 31 to save an estimated $1.2 million per year, but the company said it will not trim its home and car audio sales and marketing staffs.
In fact, Kenwood will expand its U.S.-based home and car audio engineering team, Kenwood VP Bob Law told TWICE. Kenwood's communications business will continue to maintain its own sales and marketing staff, he added.
As part of a restructuring, Kenwood will merge home and car audio marketer Kenwood USA, repair company Kenwood Service, and two communications companies, Kenwood Communications and Kenwood Systems, with their parent, Kenwood Americas, which oversees Kenwood Canada. The merged entity, called Kenwood
USA, will have two divisions in the United States: the consumer electronics division under the direction of Law, and the communications division under Moriyuki Tamura, who will handle all land mobile radio (LMR) and amateur radio products.
Tamura, formerly Kenwood Americas president, will also become president of Kenwood USA. Tamura replaces two people: Joe Richter, formerly Kenwood USA president, and Tom Wineland, former Kenwood Communications president.
Law said, "No one in sales and marketing were cut. Home and car audio are staying intact. There will be changes in how they're organized but no changes in personnel."
The consolidation won't shut down any offices or warehouses, but "consolidating companies saves a lot of expenses," Law continued. "Many functions of running [Kenwood USA and Communications] are similar, including credit and IT."
"We're adding people in engineering," he added. The CE division will hire one new engineer and move one or two engineers from Japan to the United States, he said.
The company has also created a working group "to facilitate communications between the two remaining divisions at the technical and product levels," Law continued. "The goal is to make [the two divisions'] engineering [staffs] to work together where appropriate."
Tamura said the merger will enable Kenwood to improve responsiveness and operating efficiency, "strengthen global administration," and "bring top management closer to the market."
Added Law, "Everything we're doing will go to future product development and set direction for company as the business changes."
The U.S. changes are part of a restructuring announced earlier this year in which Tokyo-based Kenwood Corp. said it would close factories, cut 30 percent of its workforce (or about 640 people), and concentrate resources on its car electronics and communications businesses.
As part of the restructuring, the parent announced last month that it is raising $221 million in capital. That will be accomplished through a debt-for-equity swap with Asahi Bank and by selling new shares to Sparx Asset Management, its largest shareholder, and to an investment company affiliated with Merrill Lynch. The additional capital will erase the company's negative net worth.
For the fiscal year ending March 2002, Kenwood Corporation's net loss hit $218 million. The company plans to return to profitability by the end of the current fiscal year.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.