NTN To Shed 600 Workers In Japan To Revamp Autoparts Business

OSAKA (Nikkei)--NTN Corp. (6472) announced a new business plan on Monday that focuses on making its mainstay automotive parts business profitable by reducing domestic personnel and moving more production overseas.

Under the plan, which runs through fiscal 2014, the firm aims to increase operating profit for the fiscal year ending March 2015 to 40 billion yen, roughly five times the projected 7.5 billion yen for the current fiscal year.

In March, NTN will seek 600 volunteers, roughly 10% of its domestic workforce, for early retirement. It expects the payroll reductions to net savings of 11.5 billion yen over two years.

The company will also try to lower production costs by narrowing its product range and mitigate exchange rate risk by boosting output abroad. It will transfer forging and other domestic operations to a factory established earlier this month in Thailand, making it a Southeast Asian parts supply hub.

Through these measures, NTN wants to turn its autoparts business, which is expected to post 9 billion yen in losses in the current fiscal year, into one generating 8 billion yen in profit in fiscal 2014.

It will also beef up its parts replacement business for bearings, which has a high profit ratio. The company intends to expand sales overseas and raise revenue in the business to 109.5 billion yen by fiscal 2014, up 25% from the 87.5 billion yen projection for the current fiscal year.

(The Nikkei, Feb. 19 morning edition)

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