Panasonic to close Beijing battery factory, sheds 1,300 jobs

August 27, 2015 // By Paul Buckley
Panasonic Corp has announced plans to stop manufacturing lithium-ion batteries at the company's factory in Beijing this month.  As many as 1,300 jobs will be lost as part of a move to focus on higher-margin products such as electric car batteries.

The 15-year-old plant produces batteries for simple mobile phones and digital cameras, both of which are being increasingly overtaken by smartphones in popularity.

"The global market for these products has been shrinking," explained Panasonic spokesperson Yayoi Watanabe who added that the closure was more about global technology trends rather than the recent financial issues that has impacted Chinese markets. Employees were informed of the closure in late July.

Finland's Nokia, which sold the company's mobile phone business to Microsoft in 2014, was the main customer of the plant in its early days.

Panasonic took over the plant from Sanyo Electric, a leading maker of lithium-ion batteries and solar panels which it acquired in 2010. The deal failed to bring in much growth due to the emergence of South Korean manufacturers.  Panasonic has since sold several of its Sanyo operations.

Panasonic is restructuring to focus on electric car batteries and energy-saving home systems rather than consumer electronics such as plasma TVs and smartphones, where it faces stiff competition from Asian rivals.

In June 2015, Panasonic commited to investing about $500 million in the fiscal year through March 2015 in its automotive business, including making lithium-ion batteries for Tesla Motors Inc.

Panasonic is expected to take on 30 to 40 percent of the cost of Tesla's $5 billion Gigafactory plant in Nevada, USA which is a key facility in the elecric carmaker's plans.

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