Sony announced that its European subsidiaries have agreed with Ficosa International, S.A. and COMSA EMTE SL, both headquartered in Spain, to sell the Sony Espana S.A. (Barcelona Technology Center, Viladecavalls). Ficosa and COMSA EMTE will now become the primary owners of the location, which manufactures LCD TVs for the European region. The transition should occur by the end of 2010, and of course is subject to certain regulatory and other approvals.
With this transaction, the Barcelona technology center will be divided into two new companies, one focusing on manufacturing and the other focusing on development and engineering. The manufacturing company will be wholly-owned and operated by Ficosa, while the development and engineering company will be a 50:50 joint venture between Ficosa and COMSA EMTE. Between them, the new companies intend to assume employment of the majority of employees at the Barcelona technology center.
Sony will source LCD TV production to the new manufacturing company for two years after completion of the transfer. Both the new manufacturing and engineering companies will concurrently develop new businesses. The major labor union which represents the majority of employees at the Barcelona Technology Center have threatened a strike in reaction the deal on September 21st, according to local media. The uncertainty of Sony’s presence after two years and looming job cuts seems to be fueling the fire, which is an additional strain on a labor force that has already experienced a salary freeze for the last two years.
The Sony Espana S.A., Barcelona Technology Center (Spain) was established in early 1973. The site area is rather large at 206,000m², and in recent times was a production facility for LCD TV’s and related components. The center employs approximately 1,100 individuals as of late August.
Although a loss is expected to be incurred by Sony in connection with the transaction for the rest of the current fiscal year, no material impact is anticipated on Sony’s consolidated financial results forecast for the current fiscal year that was released at the time of the first quarter earnings announcement, as such loss has been included in the forecast as a part of the 75 billion yen of estimated restructuring charges.
