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Sony Unveils Massive Restructuring Plan

In a bid to lift profits, Sony unveils a massive restructuring plan to better compete.

Sony, Japan's largest consumer electronics company, will slash 20,000 jobs, or 13 percent of its global workforce, in the next three years.

The company says it aims to cut costs by about $3 billion a year and move production of some of its cheaper goods to China. It will continue to manufacture its more high-end products in Japan.

Sony has been losing ground to some of its competitors, whose products often carry lower price tags.

Chief Executive Nobuyuki Idei denies that Sony has serious financial problems and says the job cuts and other changes will strengthen the company in the long term.

Sony has also announced a $2 billion joint venture with Samsung Electronics of South Korea to develop flat screen televisions.

Sony competitor Matsushita Electric put in a strong performance. Profit for the first half jumped 32 percent to $210 million compared to the same period last year.

Strong demand for mobile phones, DVD recorders and flat screen TVs lifted its earnings, despite weak sales of air conditioners during an unusually cool summer in Japan.

In the automotive sector, Honda, Japan's second-largest car company, says it earned $1.3 billion in the second quarter, up 58 percent from the same period a year earlier.

Honda attributes the results to brisk sales of its cars and motorcycles in the United States and across Asia.

But Honda says the fluctuating Japanese currency cut its revenue by $100 million in the first six months of the year. Appreciation of the yen hurts the earnings of Japanese exporters such as Honda by making the products more expensive for overseas buyers.