PIONEER TO SCRAP REAR-PROJECTION TVs, WILL ASSEMBLE PLASMA IN CAL.

[In another sign of the waning market for CRTs, MT Picture Display Corp., a joint venture formed by Matsushita and Toshiba last year, told employees at its Troy, O., plant that job cuts and layoffs might be needed if it was to stay competitive in the fiscal year starting April 1, the Dayton Daily News reported.]

Pioneer’s Pomona plant will assemble the 43W and 50W plasma TVs using panels manufactured at Pioneer factories in Kofu and Shizuoka, Japan, that have annual capacities of 50,000 and 200,000 units, respectively, Dickson said. Pioneer’s move will produce “some financial benefit,” although Dickson declined to provide details. It also will speed Pioneer’s ability to deliver plasma TVs. It currently takes 6 weeks to ship finished product to the U.S. from Japan. The assembly plant will have a 100,000- unit annual capacity, Japanese newspapers reported. “It will allow us to very easily to build plasma panels based on an account’s needs so that someone can have a specific look and feel,” Dickson said. “It also gives us the ability to differentiate our product from what is made overseas.”

In dropping CRT-based rear-projection sets, Pioneer will abandon a market that has been declining in the face of an influx of plasma, LCD and microdisplay-based rear-projection TVs. Pioneer, which dropped a 58W model last year, sells sets under its own and Elite brands. “In rear projection, what you're looking at is a category that’s being compressed very quickly,” Dickson said. “The products that seem to be withstanding that pressure are microdisplay-based sets.” While Pioneer will weigh adding 61W plasma panel as yields improve, it has no immediate plans for a microdisplay-based TV, he said.

Pioneer will be the 2nd company to move plasma assembly to N. America, following Hitachi, which builds 32W and 42W models at a plant in Tijuana, Mexico. Hitachi started production there last year and currently assembles 75% of its panels for the U.S. market there, Mktg. Vp Leo Delaney said. LG Electronics also has said it will move plasma assembly to its factory in Reynosa, Mexico, where it currently assembles CRT-based rear-projection TVs.

“The time-to-market issue and proximity to the local engineering staff are important issues,” said Delaney, whose company has its U.S. hq across the border in Chula Vista, Cal. “The U.S. also is a very important world market, so it makes sense to have local production here.”

As Pioneer gears up for plasma assembly, Chunghwa Picture Tubes said it received plasma panel orders from TCL Holdings International, Skyworth and Konka and hoped to land some from China’s leading TV maker, Changhong Electric. About 70% of Chunghwa’s plasma display panels are used in TV sets sold in the U.S., with the rest in China. Among Chungwha’s customers for its 46W panels are Gateway, Philips and Thomson. The panels are produced along a single manufacturing line at a factory in Taoyuan, Taiwan, using equipment that Chungwha purchased from Mitsubishi several years ago. Mitsubishi, which was among the early purveyors of plasma, sold the equipment to Chunghwa as it mothballed its plant in Japan. Chunghwa currently has capacity to produce 7,000 panels per month. It will add a 2nd line in the first quarter of 2005 to manufacture 42W, 46W and 50W panels with a goal of boosting capacity to 75,000 panels a month.

Panasonic officials at the Troy plant weren’t available for comment Thurs., but they had told the Dayton Daily News that any reductions in the work force there would be temporary, not permanent. Panasonic said it would make a final determination on the number of job cuts or layoffs in the next several weeks. The factory, which makes direct-view and rear-projection CRTs, has 1,250 employees -- 1,000 hourly and 250 salaried. MT last month cut 250 hourly and salaried positions at its plant in Horseheads, N.Y.

Despite the possibility of layoffs, MT is moving ahead with plans to invest $3.5-$4 million in revamping one of the factory’s production lines to make 30W and 34W direct-view CRTs. The City of Troy has granted Panasonic financial concessions in effort to keep its largest industrial employer. Panasonic has applied for a 30% reduction in its sewage bill, which would produce an annual savings of $237,000, the Dayton Daily News reported. That would be in addition to the 10-year tax break Panasonic received on real and personal property in exchange for a pledge to employ 1,438.