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Monday, October 16, 2006
Toshiba, Fujitsu May Seek Compensation From Sony

Japanese high-tech giants Toshiba and Fujitsu are considering demanding compensation from Sony over the recall of the electronic giant's batteries used in laptop computers, a report says.

It was the first report that computer makers are demanding compensation from Sony, which has been badly bruised by the global recall of its lithium-ion batteries.

Rival Toshiba is currently recalling 830,000 Sony-made batteries while Fujitsu is replacing 51,000 battery packs in addition to 287,000 already recalled.

"We will have no choice but to seek compensation for such matters as lost sales opportunities and a decline in the value of our brand," the Nihon Keizai Shimbun quoted an unnamed Toshiba executive as saying.

Sony is expected to shoulder the direct costs of replacing the batteries, such as new battery and shipment expenses, the business newspaper said.

Toshiba will argue that it had to recall the batteries ahead of the year-end shopping season, when demand is strongest for personal computers, the daily said.

A Toshiba spokeswoman said the company has not made a decision yet on the issue.

Fujitsu spokesman Toshiaki Koike said the company will seek reimbursement from Sony for the direct expenses of recalling but has not made a decision on fruther demands.

"We recognize we are recalling the products on the request by Sony so we will ask them to shoulder the cost," Koike said.

"But we would only consider seeking more compensation for missed sales opportunities and a damaged brand image if retail outlets start returning products or consumers start no-buy campaigns."

More than 7.5 million Sony-made batteries have been recalled by computer makers worldwide since mid-August due to concerns that the batteries may overheat and start fire.

Sony said on August 25 that it would incur costs of up to 257 million dollars after massive recalls by US computer makers Apple Computer and Dell.

Since then its troubles have spread further, with recalls by Toshiba, China's Lenovo and Fujitsu and fellow Japanese maker Hitachi.

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