Kenwood 2005 Annual Report Download - page 17

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3Acceleration of quality innovation
Activities for the innovation of quality for all products ranging from hardware to
software will undergo an increased level of acceleration. The Quality Innovation
Division, which was newly established as of June 1, 2004, will play a central role
in doing this, by enhancing quality control functions that cover the entire range
of processes from the certification of parts and components to design and
production of car electronics products required to have high quality standards,
particularly against vibration, temperature and dust.
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4Promotion of environmental steps
It has been sometime since we started undertaking activities for manufacturing
environmentally friendly products. We are planning to complete the
implementation of lead-free solders in all business divisions by the end of
October 2005. Further, since RoHS instructions* will be applied to products that
will be sold in nations of the European Union starting from July 1, 2006, we are
in the process of preparing for complete compliance to these instructions by
responding to regulations regarding environmental substances in all of our
production processes, starting with the procurement of parts and components.
We are also improving our infrastructure to respond to the recycling regulations
that are being promoted in Europe.
* RoHS instruction: This is an abbreviation for the Restriction of the Use of Certain Hazardous
Substances in Electrical and Electronic Equipment, which is implemented by the European Union
and regulates harmful and toxic substances in electrical and electronics equipment products.
The use of six substance groups of lead, mercury, cadmium, hexavalent chromium,
polybrominated biphenyl (PBB) and PBDE will be regulated for products to be sold in European
Union member nations of the European Union from July 1, 2006.
Structural reforms of our sales company in the United States
Eliminate past “Negative Legacy” on consolidated base
as well
In order to make the financial base and capital structure of our subsidiaries
sounder, we have completed financial structure reforms with our sales
companies in Germany and France during the past term ended March 2005.
Continuing with these efforts, we plan to convert liabilities into shares (debt-for-
equity swap) amounting to approximately JY4.8 billion, loaned from the parent
company here in Japan to our sales company in the United States. Capital is
enhanced and financial as well as capital structures will be drastically reformed.
Together with the aforementioned activities, we will also be closing a
company that is related to selling products to outlets in the United States, which
became financially non-viable as business structure reforms continue. Through
such efforts, we will be eliminating the “negative legacy” of the past.
Due to these developments, the Kenwood Americas Headquarters
Preparatory Office was established as of November 15, 2004, and was re-
established as the Kenwood Americas Headquarters that will gain overall control
of Kenwood USA as of June 1, 2005 aiming enhancement of business
operations in the United States and Canada, as well as emerging markets in
Mexico and Central and South America will be made.
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Kenwood Corporation Annual Report 2005