In what it described as a nationwide housekeeping effort, Mitsubishi Electric Corp. is flattening out its overseas operations by dismantling its U.S. holding company and consolidating several electronics subsidiaries.
The move will reduce Mitsubishi's U.S. holdings from 11 companies to nine and will entail the creation of a new firm dedicated to digital consumer products.
The announcement coincided with Mitsubishi's mid-year financial report, which was released today. Earnings for the first half of the company's fiscal year fell by 33% to $20.4 million, while revenues dipped 3% from the year-ago period to $11.1 billion. The report also includes a one-time $152 million charge to earnings to cover the cost of the restructuring.
Effective Jan. 1, 1999, Mitsubishi said it will dissolve its holding company, Mitsubishi Electric America Inc., and place all human resources, accounting, legal, technical support, and other services for its North and South American operations under the control of Mitsubishi Electronics America Inc., the Sunnyvale, Calif.-based semiconductor subsidiary.
Additionally, the Japanese parent said it will close Mitsubishi Consumer Electronics America Inc., which had been charged with building cell phone and audio/visual consumer devices.
The subsidiary had already sold the manufacturing plant of its Cellular Mobile Telephone division to Solectron Corp., San Jose, in a deal that closed earlier this month. The cell phone group's Braselton, Ga., design team will now be folded into Mitsubishi Wireless Communications Inc., Deluth, Ga., as will a Georgia-based Mitsubishi satellite antenna sales and installation subsidiary, known as Astronet Corp.
The remaining Consumer Electronics America division, an Irvine, Calif., group dedicated to audio/visual products, will be combined with a Mexicali, Mexico, manufacturing subsidiary to create a new venture dedicated to digital consumer electronics products, such as televisions and computer monitors.
In other areas, a design team, retained as part of the previously announced dissolution of Mitsubishi Semiconductor America Inc. of Durham, N.C., will be folded into the Electronic Device Group of Mitsubishi Electronics America, where it will continue to develop semiconductor technologies.
The sweeping reorganization is designed to concentrate Mitsubishi's focus on its core U.S. markets, while streamlining its corporate structure, according to a company spokeswoman. "What we're really talking about is a lot of housekeeping," she said. "It's nothing monumental, but it makes a lot of sense."
In addition to the new consumer digital company, Mitsubishi said it will form the Communications, Computers & Visual marketing group, which will act as an incubator for new businesses throughout the U.S. The group will work with its counterpart in Tokyo, the Computer, Communication & Visual Systems Integration Group, founded some years ago.