BenQ blames poor management in demise of German unit

(Associated Press via NewsEdge) Taiwan's BenQ blamed poor product management for the demise of its mobile unit in Germany.

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.

Rick Lei, a BenQ vice president, told reporters 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.

There were two reasons for the delays, Lei said.

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, he said.

'The unit's management team didn't make enough effort to integrate their project, customer, supply chain operations,' Lei said.

The loss was 'unbearable' for BenQ, which has registered capital of NT$26.2 billion ($794 million), Lei said.

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).