Kenwood chief touts turnaround
LAS VEGAS — Kenwood Corp. boasted more than a spacious booth at this year’s Consumers Electronics Show.
Kenwood’s worldwide president and chief executive officer — Haruo Kawahara — paid a visit to North America.
“This has never happened before. It’s really exciting,” explained Gary Wooten, sales manager-national business radios for Kenwood Communications. “It says a lot about him.”
The small press conference featured little more than a handful of actual press, outnumbered nearly two-to-one by Kenwood officials.
Kenwood Vice President Bob Law introduced Kawahara, who used the event to announce that the company’s restructuring had been finalized with the close of the calendar year.
The visit punctuated more than six months of restructuring since Kawahara took the reins of Kenwood in June.
Kawahara’s early moves included job cuts — layoffs that eventually totaled a third of the company’s workforce — and shuttered production plants.
Kawahara closed plants in Mexico, China and Hungary, and cut back production operations in Japan, France and Singapore.
Kawahara also slashed sales systems across the globe, consolidating at least 37 sales offices into 15, including a complete withdrawal from the Asian market.
The company also gathered all of its North American subsidiaries — Kenwood Communications, Kenwood Systems, Kenwood Service and Kenwood Americas — under the Long Beach, Calif.-based Kenwood USA umbrella and shuffled its management team accordingly.
Company officials estimated the move would save $1.2 million annually.
Subsequently, Kenwood USA assumed responsibility for all North American product marketing.
The most notable change came when Kenwood Communications President Tom Wineland left in October. Kawahara then named Moriyuki Tamura — former president of Kenwood Americas — president of the new division.
Tamura took control of the division that includes land mobile and amateur radio products.
Kenwood USA Vice President Bob Law heads the consumer electronics division of the North American branch, which oversees home and mobile entertainment products.
Kawahara insisted the new alignment better serves the company’s primary markets of land mobile radio communications, and mobile and home entertainment.
Kawahara indicated that the numbers already have turned around.
“We posted a positive net income for the first half of the fiscal year [2002] after three straight years of deficits,” Kawahara said.
The company’s net worth rebounded as well, according to Kawahara, from $142 million in the hole in September to closing out the year at $100 million in the black.
It bears pointing out that the company’s debt elimination is a result of more than $17 million in new investment, while the rest is attributed to a debt equity swap reissued as preferred stock.
For now, it appears the industry has embraced the changes.
“I continue to be very bullish on Kenwood in terms of its land mobile product line offerings,” said Alan R. Shark, president and chief executive officer of the American Mobile Telecommunications Association. “It was my understanding that Kenwood’s [land mobile radio] division was very successful and profitable, and enjoyed a good reputation for quality. The change at the top had more to do with the need to better coordinate all consumer electronic and [land mobile radio] product lines. We are not seeing any let-up of any commitments to [land mobile radio] and are excited by what we are hearing from Kenwood’s new leadership.”
At the CES event, Kawahara also reported that his company remained on track with its “mid-term business plan,” a strategy that includes an early resumption of dividends.
He also maintained that the company plans a renewed focus on the land mobile radio market, which includes “development of APCO Project-25 digital radio systems for public safety applications.”
Kawahara also pointed out that “Kenwood is the first Japanese manufacturer to supply APCO Project-25 products to the market.”
