Sanyo founders fall on their swords

The last members of the dynasty that made Sanyo into one of Japan's manufacturing giants will resign from the company's management next month, Japanese media have reported.

President Toshimasa Iue and senior management advisor Satoshi Iue are expected to resign their posts on 1 April, according to a summary of media reports issued by Nomura Securities in Tokyo.

The analysts have warned that the predicted management upheaval at Sanyo, although deemed necessary, could hit staff morale.

"Although founding family members did not in our view provide cohesive power in the company's management, we think the resignation of president Iue in the current situation could lead to growing concerns among employees about possible business sell-offs," said Nomura analyst Eiichi Katayama.

Debt-laden Sanyo may consider selling key business units to raise cash and cut costs if it embarks on a drastic restructuring plan.

Other analysts quoted in local media said that Sanyo had a chance to slim down and emerge revitalised.

Sanyo has struggled to cope with a profound shift in Japan's manufacturing industry, as more and more work is done in cheap labour markets overseas.

As the economy has changed in recent decades, Japanese companies once tightly controlled by close-knit family groups began looking further afield for management talent.

Companies like Sony and Renault have brought in chief executives from overseas, but Sanyo, NEC and others have been slower to change.

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