bobn2
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Forum Pro
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Posts: 71,955
Re: Maybe they finally realized
rurikw wrote:
Adielle wrote:
So you already know what's going to happen after they release their cameras and lenses in 2019? Silence? That's what's gonna happen? OK, I guess Olympus is going down. 100 years after being in business and recently recovering from huge scandal / crime problems, they're gonna release their "swan song" products and then fold and die. All that major new logistic / manufacturing operation they've been working on, I guess they were also allowed to do it just so that the swan song would sound nice. Go out with a bang. Now it makes sense.
Yeah the Vietnam thing is a headscratcher. Maybe secret agreement with Sony or whoever will take over...
It's not really much of a headscratcher, they are just closing a plant. They aren't opening a new one, just shifting some production to their existing (since 2007) plant in Vietnam. The announcement is here:
https://www.olympus-global.com/ir/data/announcement/2018/contents/ir00003.pdf
This kind of thing happens all the time when a company's business is contracting (and sometimes when it isn't). If they have more production capacity than they need, they reduce overheads by closing plants and consolidating to the newer/more efficient plants.
The announcement gives the reasons:
Olympus Corporation established OSZ in Shenzhen, China, in December 1991, for the manufacture of products relating to the digital camera business. However, the digital camera market suffered a rapid contraction due to the rise of smartphones, leading to a marked decline in OSZ's operating rate. OSZ's equipment had also deteriorated after 26 years of operation. It would be extremely difficult to maintain the competitiveness of OSZ.
Up until now Olympus Corporation manufactured products relating to the digital camera business at OSZ and at Olympus Vietnam Co., Ltd. (hereinafter "Olympus Vietnam") located in Dong Nai Province in Vietnam, but in light of the above-mentioned facts, we have decided to discontinue operations of OSZ and concentrate this production at Olympus Vietnam. This will enhance our production efficiency and profitability, enhancing the global competitiveness of our digital camera business.
Closing plants invariably involves expense. Relocation of equipment, retraining of personnel in the plants taking on new work, disposal of the unused equipment and property, write-down of capital assets and very often in locations such as China, reimbursement of grants and loans which were given as incentives to locate there in the first place.
John King and Tom Caldwell are accountants with long and deep experience of such corporate matters. Doubtless they could shed more light on this.