BenQ - Siemens to Declare Bankruptcy

[Mod]

BenQ tried and failed, shows what that company knows about corporate strategy. BenQ Corp amid heavy losses with the BenQ Mobile division won’t pour any more money into its mobile-phone subsidiary.

BenQ said its handset subsidiary may file for bankruptcy protection and noted that operations in Germany—including Munich, Bocholt and Kamp-Lintfort—may be “affected.” So not only do they know nothing about strategy and good business acquisitions, they also will fail all their creditors.

The company stressed that it plans to continue its branded mobile business in selected markets, and emphasized that adjustments to its mobile operations won’t weaken the company’s “unwavering commitment” to its branded business or its focus on providing manufacturing services and operations in Asia.

In August, BenQ announced plans to inject $400 million into its struggling handset business while spinning off non-mobile businesses to strengthen the handset brand, which ranks just below the world’s top five handset vendors in terms of market share.

At the end of the second quarter, BenQ posted its third straight quarterly loss and forecast flat sales and shipments in the third quarter. Second-quarter losses came in at $76.5 million vs. a net profit of $14.6 million in the year-ago quarter. BenQ’s handset division shipped 7.3 million units during the second quarter, according Strategy Analytics. At the time, BenQ said half of its annual revenue came from sales of mobile phones.

BenQ Mobile has been marketing high-end mobile phones in its home market of Taiwan, as well as in China, Thailand, Germany, Spain and Russia. Meanwhile, the world's top five handset manufacturers have increased their aggregate market share from 81 percent in the first quarter to 83 percent in the second quarter, squeezing the remaining share available to second-tier vendors such as BenQ Mobile.

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[Barry]

BenQ-Siemens handset business has announced that 1,900 of the firm’s 3,000 workers must be laid off. Insolvency Administrator Martin Prager is hoping the remaining workers could thrive as a handset development and design house for third-party manufacturers. If viable, the new business would preserve 1,100 German jobs.

Under such an approach, 500 of the company’s 700 current research and development jobs would remain, but fully 75 percent of the company’s current administrative, marketing, sales and production workers would be fired.

Prager warned, however, that if the new model continued the company’s plunge into the red, the business would have to close and all employees put out of work.

Meanwhile, Siemens AG, the German company that “sold” its handset business to Taiwan-based BenQ Corp. with a $303 million payment to sweeten the deal, continued to take fire from German unions angry over the turn of events. The unions have charged that Siemens knew the handset business was failing and that the sale to BenQ was a method to abdicate responsibility for eventual job losses.

Though Siemens has created a $45 million fund for sustaining and retraining laid-off workers at BenQ-Siemens, the IG Metall labor union today demanded that Siemens provide $250 million for the laid-off workers. Siemens responded that it had done its part and that other, unnamed parties needed to step forward with assistance.

BenQ Corp. is likely to post a fourth straight quarterly loss next week, in part due to losses accruing from its failed German operation. The projected quarterly loss is about $135 million and the annual loss about $478 million, more than doubling last year’s loss.

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[JimmerUK]

http://www.mbmagazine.co.uk/index.php?option=com_content&task=view&id=1110&Itemid=62>Siemens are suing BenQ as well.

I've also heard that the UK division is being closed down.

[Mod]

Can't see why Siemens would expect anything else. Mind you, the lay offs come pretty soon after BEnQ acquired them....

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[Mod]

"Attempts to save BenQ Mobile from liquidation appear to have failed. Insolvency proceedings were opened in Germany on Monday, after administrators were unable to find any investors willing to buy the struggling company. BenQ Mobile filed for insolvency in September 2006, when Taiwanese hardware manufacturer BenQ said it was pulling out after suffering 'unsustainable losses.'"

Don't stop now! Only bad thing is we'll have to find another forum for all the old Siemens stuff.... Hopefully someone buys them to take some more loss

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