Firm says US TV, European phone operations will post profits
TCL Group, the world's biggest television maker, will again register losses at its European TV operations this year, chairman and president Li Dongsheng said yesterday.
But the firm's United States TV and European mobile-phone units will report their first profits this year since TCL's pioneering acquisitions of France's Thomson and Britain's Alcatel in 2004, Mr Li said.
'In the second half of this year I think our Thomson unit will begin to make profits in North America so in that region our acquisition has been successful. But the main problem is in the European market,' he said. He blamed the losses on TCL's slow response to consumers switching from cathode-ray tube TV sets to flat-screen TVs and the high costs associated with restructuring the European business.
'The costs of firing the work force and restructuring are legislated in Europe and are much more complicated than we imagined,' Mr Li said. 'Also, in a short space of time flat-screen TV sets have come to account for 85 per cent of total European sales volume and we were not really prepared for this.'
When TCL first acquired Thomson, the French company was losing money in the US market but breaking even in Europe so the firm concentrated on first reviving the US business and kept the status quo in its home market.