Struggling Japanese electronics maker Pioneer said both its chairman and president would step down to take the blame for mounting losses, promising drastic reform to revive the business.
Pioneer said president Kaneo Ito and chairman Kanya Matsumoto, son of the company's founder, would leave their posts to take responsibility for the recent poor sales of DVD recorders and plasma televisions amid a price war.
Vice president Tamihiko Sudo was appointed new president, effective from January 1, by the board of directors.
"Business has worsened on an unprecedented scale since the company was set up (in 1947)," acknowledged Ito, expressing responsibility for failing to successfully steer the company through developments in digital products.
He said Pioneer would unveil "a drastic structural reform plan" on December 8 and apologised to shareholders, employees and client companies.
Incoming president Sudo, said that in order to boost its profitability the group would focus more on car audio and navigation systems, a division he has previously headed.
Pioneer, like many other Japanese electronics goods makers, is streamlining its operations in response to rapidly falling prices of DVD recorders, flat-panel televisions and other home digital products.
The firm was literally a pioneer in home-use digital electronics, launching the first plasma-display TVs in 1997 and DVD recorders in 1999.
According to Nikkei newspaper, Pioneer is believed to be planning to cut more jobs and scale down its DVD recorder operations after falling to an interim net loss of 12.26 billion yen (105 million dollars) from a profit of 4.81 billion yen a year earlier
The Mainichi Shimbun daily newspaper also said Pioneer would further reduce production capacity of plasma displays, having already halted two of its six lines.
Pioneer recently warned it expects a net loss of 24 billion yen in the year to March 2006 but newspapers say the company could sink deeper into the red because of the restructuring measures.
Pioneer had made large investments in plasma TVs but has not got enough returns yet and appeared not to be making the most of the group's strength.
Sudo said it was only natural for the company to "drastically review" plasma display and DVD recorder operations as they are the main cause of its business deterioration.
However, Pioneer has not officially confirmed the withdrawal from the production of low-priced, volume-zone DVD recorders, reduction of plasma display production and other issues claimed by the newspapers.
The firm is expecting to release an official announcement of the new
business plan and strategy under Mr. Sudo's new leadership, which will be
announced in Tokyo on Dec. 8th.