PRESS RELEASE: No.17 December 20, 2005
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Notice of Restructuring of Wiring Harness Production Systems in Japan |
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The Sumitomo Wiring Systems group has decided to restructure our domestic production systems while promoting the expansion of our wiring harness production capabilities at overseas plants. We hereby notify you of the contents of the restructuring as follows. | |||||||||||||||||||||||||||||||||||||||||||||||
1. Background of the restructuring of domestic production systems | |
The Sumitomo Wiring Systems group has been actively promoting the expansion of overseas production bases and the restructuring of domestic production systems, with the purpose of meeting the increased overseas production of Japanese automobile manufacturers, our major customers, and of strengthening our cost competitiveness. Sumitomo Wiring Systems has been promoting restructuring, including the closure of wiring harness production plants and the integration/abolition of related companies. Through these efforts, the rate of our overseas wiring harness production increased to 78 percent in FY2004, from 69 percent in FY2002. The Sumitomo Wiring Systems group expects in its order-receiving plan for FY 2008 to increase its order-receiving 1.2 times around the world and the rate of order-receiving overseas will be approximately 70 percent. We are now planning to expand our overseas production capabilities and the transfer production to overseas plants, with the aims of meeting our customers' needs, improving the group's competitiveness, and further strengthening the company's corporate structure. Along with implementing these plans, Sumitomo Wiring Systems has decided to restructure our domestic production systems. These measures will increase our overseas production rate for FY 2007 to nearly 90 percent. |
[Reference] Changes in the wiring harness overseas production rate (%) |
FY 2002 | FY 2003 | FY 2004 | FY 2005 | FY 2006 | FY 2007 | |
Orders received around the world | 69 | 74 | 78 | 82 | 85 | 88 |
Orders received in Japan | 41 | 46 | 51 | 55 | 62 | 65 |
(Note) The figures for FY 2005 are estimates while figures for FY 2006 and 2007 are projected figures. |
2. Outline of the restructuring (policies) | |||
The Sumitomo Wiring Systems group will further promote the restructuring of the wiring harness production divisions in Japan by the end of FY 2007, based on the following policies. | |||
(1) | The Sumitomo Wiring Systems group will reduce current domestic production capability by approximately 30 percent. | ||
(2) | The Sumitomo Wiring Systems group will reduce approximately 2,000 workers including employees in the company and temporary workers dispatched by agencies. To this end, the company will implement an early retirement preferential system, etc. | ||
(3) | The Sumitomo Wiring Systems group will rationalize its business operations through the transfer and integration of businesses within the group companies. |
3. Effect on business results | |
Costs related to the restructuring have been appropriated as scheduled based on rational standards. Therefore, we will not modify the figures of the business results, announced on November 4, 2005, for the whole fiscal year ending in March 2006. |