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Matsushita Closing Mobile Plant

November 2, 2001

TOKYO (AP) _ The cell-phone unit of Japanese electronics giant Matsushita Electric Industrial Co. said Friday it is closing a plant that employs about 350 people in Great Britain as part of wider efforts to lower costs by moving production to China and Eastern Europe.

Matsushita Communication Industrial Co. announced the closure of its other mobile phone plant in Great Britain, in Portsmouth, earlier this year.

The plant in Thatcham in southern England will close by the end of this year, and production will begin at its new Czech plant in the city of Pardubice in April, said company spokesman Yasuharu Enda. The Portsmouth plant employed 200 people.

Matsushita, which makes the Panasonic brand, will retain some Britain-based operations for research and development for mobile phones, Enda said.

Masahiko Yamamoto, managing director of Matsushita, said it was a ``sad day″ because the Thatcham plant had an excellent reputation for quality and productivity.

``It is external pressures such as the downturn in the European market for mobile phones coupled with unfavorable exchange rates that has led to this regrettable decision,″ said Yamamoto.

Japanese electronics makers are suffering serious losses because of the worldwide downturn, especially in the United States, that deepened after the Sept. 11 terrorist attacks. Cell phones sales in Europe have also been down recently.

For the fiscal year ending in March, Matsushita expects a loss of 265 billion yen ($2.2 billion), its biggest loss since its stock market listing in 1971.

Matsushita has announced job cuts of 8,000, or 3 percent of its global work force, by March 2002 in Japan, through a costly early retirement program.

The company has not given figures for overseas job cuts. Jobs will be reduced in the United States as production moves to Mexico, but they will increase in China and Eastern Europe, said Matsushita Managing Director Yukio Shohtoku.

As part of its turnaround plan, Matsushita is closing 30 plants. Of the 17 plants that already shut down, six are overseas _ three in the United States, two in Europe and one in Asia.

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