BenQ claims poor management caused demise of German unit

Taiwan's BenQ blamed poor product management for the demise of its mobile unit in Germany, an Associated Press report said.

 

BenQ, the world's No. 6 mobile phone vendor by market share, filed for insolvency last week for the German operations it took over from Siemens in October 2005, endangering 3,000 jobs, the Associated Press report said.

 

Rick Lei, a BenQ VP, was quoted as saying that delays in launching new phones resulted in an estimated loss at the firm's mobile operations of 840 million euros ($1.07 billion) from October 2005 to the end of September this year.

 

The Associated Press report also said there were two reasons for the delays, according to Lei.

First, BenQ Mobile sold custom-made phones for operators, so the customization and modification process took time.

 

But the more important factor was poor product management at the German unit, the executive said.

 

'The unit's management team didn't make enough effort to integrate their project, customer, supply chain operations,' Lei, quoted by the report, said, adding that the loss was 'unbearable' for BenQ, which has registered capital of NT$26.2 billion ($794 million).

 

If BenQ were to continue to keep the German unit, BenQ Mobile, it would have to inject 800 million euros ($1 billion) into the unit in the coming year, he said.

 

Since the acquisition took effect, BenQ has reported net losses for three straight quarters amounting to NT$13.53 billion ($321 million).

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