Hitachi is spinning off its manufacturing operations in a bid to turn around its poor financial performance.
The Japanese electronics giant yesterday reported a loss of 142.23 billion yen ($1.17 billion) for the first half ended September 30 1998. This contrasts with the same period last year when it made a profit of 37.67 billion yen.
For the year ending March 31 1999, Hitachi is predicting a loss of 250 billion yen, its first loss for more than 30 years. The company blames the slump in memory chip prices, and the problems in the Japanese domestic market for the results.
Executives said it will transfer its manufacturing operations for its home appliances division into a wholly-owned subsidiary, Hitachi Taga Electronics. It will also create another subsidiary for its lighting equipment manufacturing.
The Japanese government has recently launched a series of initiatives, including giving out shopping vouchers, in an attempt to boost consumer consumption, which has slumped in the uncertain economic situation.
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