Jan. 11, 2002 – Tokyo, Japan – Matsushita Electric Industrial Co. is restructuring its operations to avoid overlap in research and speed up product development.

Under the plan, Matsushita will convert its five group companies into wholly owned subsidiaries and will spend up to 100 billion yen ($757 million) on repurchasing its own shares, reported the Associated Press.

Possible plant closures and job cuts have not yet been decided.

The company aims to unify its managerial vision in advance of posting what is expected to be its biggest annual loss ever of about $2 billion for the fiscal year ending in March.

Matsushita has been struggling to make a comeback by shedding thousands of jobs through early retirement packages.

Part of the financial losses come from huge restructuring costs to trim 10,000 workers, or about 3.4% of Matsushita’s global work force, under a restructuring effort begun last year.

“This is an extremely tough time for Matsushita,” company President Kunio Nakamura said.

He said the massive costs of research for futuristic digital gadgets with the biggest potential for profits require bringing together group companies under one management. In the past, encouraging competition within the group helped produce quality, but those days are over, he said.

Under the new plan, Matsushita will acquire shares it doesn’t already own in its five group companies – air conditioning and ventilation, mobile phones, building materials and lighting fixtures, audio-visual and systems development – through share swaps. The company didn’t say how much it would cost to buy the shares. But it said it would spend $757 million to buy back up to 60 million of its own shares.

The latest plan does not include Victor Co. of Japan, a Matsushita subsidiary. Nakamura said Victor has a separate brand identity and should remain independent.