JVC 2009 Annual Report Download - page 4

2JVC KENWOOD Holdings, Inc.
Management Message
JVC Kenwood Group (“the Group”) was launched on October
1, 2008, along with management integration between Victor
Company of Japan, Limited (“JVC”) and Kenwood Corporation
(“Kenwood”). At that time, the global economic crisis caused
by financial turmoil originating in the U.S. was spreading and
growing more severe. It was as if a boat were about to set sail
against a storm. However, through management integration
we established a corporate base able to overcome the
economic crisis just before we met the storm.
Prior to management integration, JVC and Kenwood,
through their respective structural reforms, had finished
transferring and terminating non-core businesses and trimming
unprofitable businesses. In anticipation of a worsening of the
business environment, however, the Group established the
Profit Structural Reform Conference at the same time it
implemented management integration, and promoted profit
structural reform based on a four-pronged reform approach,
focusing on management, finance, cost and businesses. To
handle further deterioration in the business environment in the
fourth quarter of the fiscal year ended March 2009, we also
implemented additional measures: structural reform of three
business segments where profitability issues remain to be
tackled; structural reform of production and sales systems
and logistics and services-related companies, which are
associated with the above business segments; employment
structural reform, including a workforce reduction of about
3,200, approximately 14% of the total Group employees as of
the management integration; and emergency measures such
as the partial return of remuneration.
For the fiscal year ending March 2010, we expect that the
severe business environment of the fourth quarter of the
period under review will continue. Under these circumstances,
we will reap the effects of the measures taken so far and carry
out our growth strategies by expanding profitable sales in
order to shift management priorities from survival to growth as
soon as possible.
Specifically, in the Car Electronics business, J&K Tech-
nologies Corp., which integrated the development and
production functions of both JVC and Kenwood, was renamed
J&K Car Electronics Corporation (“J&K Car Electronics”) on
June 24, 2009, and the product planning and marketing
functions of both companies were integrated into J&K Car
Electronics to make the company virtually independent, with
the goal of evolving the common businesses of JVC and
Kenwood into a completely integrated business. Likewise, in
the Home Audio business, all functions of both companies
(excluding sales functions) were integrated into JVC on July 1,
2009, in order to promptly maximize integration effects by
combining development, production, product planning and
marketing functions, thus further enhancing cost synergy and
expanding product lineups.
Furthermore, the Group will choose products that can
serve as engines for future growth as top strategic products
that the entire Group will support in terms of funds, technologies
and personnel, aiming to expand global sales and strengthen
earnings capabilities. Over the medium to long term, we will
We will expand corporate value and create new
and unique (unconventional) added value in
aiming for a corporation that will overcome
the economic crisis and earn the trust and high
hopes of society.