Asia Times | Sony closes a Beijing factory on cost pressure

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Japanese consumer electronics maker Sony recently shut a 20-year-old mobile factory in Beijing on declining sales and rising cost pressure, the Economic Observer reported.

Sony attributed the factory closing to decreasing sales volume of its mobile products in a report to media. According to its financial results for the third quarter 2018, given a 45% year on year growth in revenue, it reported an operational loss of 15.5 billion yen (US$138.3 million) from the mobile and telecom businesses.

Staff also got short notice about the closing of the factory, the report said. An employee who has been working there for nearly 20 years said staff have organized several rounds of protests to argue for a better compensation plan.

The Sony factory, namely Sony Ericsson Putian Mobile Telecom, is located in Beijing’s Shunyi district. It employed more than 10,000 workers during peak years.

“Production volume of the Sony Beijing factory started to drop after Sony constructed a new factory in Thailand,” a worker was quoted as saying. Assembly lines have been gradually moved to the Thailand factory and they had also sent engineers to learn from their experience, he said.

It’s a clear trend that low value-added functions, such as assembly, are moving out of China toward countries with lower costs, an industry insider was quoted as saying.

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