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Pioneer Completes A/V Business Transfer To Onkyo

Kawasaki City, Japan -Pioneer Home Entertainment Corp., home to Pioneer’s home electronics, consumer headphone, and phone businesses, today (March 2) became a subsidiary of Onkyo Corp. Japan as planned.

The subsidiary continues to do business as Pioneer Home Entertainment (PHE) Corp.

Pioneer Corp. also took a 14.95 percent stake in Onkyo and become Onkyo’s third largest shareholder, with Gibson Brands remaining the second-largest shareholder in Onkyo Japan with 21 percent. No Pioneer factories were transferred to Onkyo, through Pioneer’s inventory of home entertainment products was transferred.

Also on March 2, Pioneer & Onkyo U.S.A Corp., doing business as Pioneer Home Entertainment (PHE) USA, was established as a subsidiary of the new Japan subsidiary. All home entertainment personnel from Pioneer Electronics USA were transferred to the new subsidiary.

The transferred personnel remain in place in Pioneer Electronics USA’s Long Beach., Calif., facilities for now but will eventually be transferred to a new facility somewhere in Southern California to keep the staff on board, said Russ Johnston, EVP of corporate communications, marketing and product planning for Pioneer Electronics USA. Johnston remains with Pioneer Electronics USA.

“Onkyo kept all existing [U.S.] staff in place so this would be a seamless transition,” said Johnston. The decision was important for “keeping relationships strong” with retailers, he said. “The staff is the brand.”

As of today, PHE USA’s sister subsidiary Onkyo USA will provide back-office functions such as sales administration, logistics, credit and AR services to PHE USA, which previously used a Pioneer back office shared between home and car for those functions, Johnston said. Pioneer Electronics USA shifted the roles of its back-office personnel to ensure the least number of people were affected to avoid layoffs, he said. Pioneer Home Electronics USA will continue to use its own sales administrators, but they will now input orders into the Onkyo system, Johnston noted.

When asked about changes that Pioneer’s home-electronics dealers would notice with the changeover, Johnston said, “If dealers do business with Onkyo already, they’re already familiar with the back-office functions of Onkyo USA.”

With the changes, Kiyokazu Igarashi remains president of Pioneer Electronics USA for car electronics, optical disc technology, and Technical Audio Devices (TAD), which is Pioneer’s high-end pro and consumer audio speaker brand.

In Pioneer’s home operation, Jim Krodel remains senior VP of sales, and T.K. Miyazaki remains VP of marketing and product planning. Chris Walker, director of product planning for home A/V, left the company, but his position will is planned to be refilled. Walker is taking a position with a company “that is not currently doing business in the U.S. at the moment,” Johnston said. Walker’s new position has not been disclosed.

On July 1, Onkyo’s home electronics business will join Pioneer’s home electronics business in the new subsidiary in Japan.

Onkyo’s purchase of Pioneer’s home entertainment business, announced last year, will strengthen the two companies’ A/V business and enable Pioneer to concentrate on the automotive OEM market and aftermarket, Pioneer Japan previously said. The combined Pioneer and Onkyo business “will become the largest [home A/V] receiver manufacturer in the world,” Johnston told TWICE. “The merger will make both companies stronger,” he said. “Independently it would be very difficult for both companies to succeed in achieving their goals.”

Pioneer Corp. in Japan previously said the merger would also enable PHE to leverage the manufacturing and purchasing functions of Onkyo and that “other functions should be gradually concentrated to maximize the potential merger synergies in the transaction.”

Also on March 2, Pioneer Japan as planned sold off its pro-DJ business to a company jointly owned by Pioneer and investment company KKR, which owns 51 percent of the business.