October 25, 2009 – Osaka, Japan
Today Nikkei, Japan’s leading newspaper specialized in economy and politics, reported that on October 24, the Japanese government finalized the policy of aiding turnaround of JAL (Japan Air Lines) by making JAL leverage public institution of “Company Turnaround Aid Institution”. Related ministers will discuss this issue and officially announce the policy by the end of this month, with the objective of reducing excess debt under the government’s control and develop drastic restructuring plan. The institution will execute bridge financing etc. to abolish credit uneasiness of JAL. The government will wait for the restructuring plan then study increase capital by public funding as a last resort. More drastic solution is to be studied and developed for pension debt reduction which is currently very slow in progress. Restructuring plan development under strong government’s control is to start at last.
According to Nikkei, the outlook of the JAL turnaround is as below.
Capital increase: Current restructuring plan is 300 billon yen including public funding. The government’s policy includes leveraging Company Turnaround Aid Institution to insert capital by the end of 2009.
Debt write-off: Current plan is 220 billion yen. The government’s policy is to convincing syndicates of banks to accept debt write-offs, on condition that JAL will drastically restructure with public funding.
Debt-for-equity swap: Current plan is 30 billion yen. The government’s policy is to convincing syndicates of banks to accept debt-for-equity swap, on condition that JAL will drastically restructure with public funding.
Bridge financing: Current plan is 200 billion yen. The government’s policy is to execute this by the end of November 2009.
Pension debt reduction: Current plan is reducing insufficient accumulation to 100 billion yen from 330 billion yen. The government’s policy is change to more drastic plan.
Restructuring: Current plan includes cutting almost 9000 jobs and abolishing 45-50 routes by 2014.
Capital deficit: Current estimation is up to 270 billion yen.
JAL’s turnaround has been going through a trial and error process as below.
June 30: 100 billion yen financing agreement with Development Bank of Japan etc. froze.
August 7: April-June consolidated financial result was in red by 99 billion yen.
August 21: Starting negotiation of integrating air cargo business with NYK (Nippon Yusen Kaisha) Line.
Beginning of September: Alliance negotiation with Delta and American Airlines including financing came to light.
September 15: Draft of management improvement plan with pillars of cutting 68000 jobs and abolishing total of domestic and international 50 routes proposed at blue-ribbon panel.
September 25: A task force directly controlled by Mr. Maehara, Minister of Land, Infrastructure, Transport and Tourism established, marking the start of reviewing the current turnaround plan.
October 13: The task force proposed a turnaround plan draft to financial institutes etc. requesting them to accept debt write-offs of 300 billion yen in total.
October 20: The task force made the revised draft including increase of capital of 300 billion yen by public funding etc.
The Japanese government finalized the policy of aiding turnaround of JAL (Japan Air Lines) by making JAL leverage public funding by Company Turnaround Aid Institution because of the tough reality that they would not be able to win understanding and support from syndicates of banks without strong control and interference from the government. Under a situation of extreme funding difficulties, the government decided to back-up in full scale. Hatoyama administration cannot fail this turnaround with wall at their back; as Mr. Maehara states, we cannot have a situation in which we do not have flights and allow inconvenience to travellers. However, there are many hurdles and obstacles to overcome and the outlook is not necessarily bright.
The turnaround is not only about financing and debt write-offs. It is really all about whether the mindset of current JAL employees and retired workers, and the whether the system and culture of the entire company change from the current “the government will foot the bill” culture. It is only when the company totally change from inside to an organization that it will start creating value to generate revenue with optimum cost so that financing/cash flow management will be a sound one.
2009年10月12日月曜日
Promoting Health and Well-Being Through Sports on National Sports Day
October 12, 2009 – Osaka, Japan
The second Monday of October is National Sports Day/Health-Sports Day in Japan. Its purpose is to promote health and well-being through sports, and this is the day for sports and to foster a sound mind and body. The day was originally celebrated on October 10th, the day that is most likely to be sunny at this time of the year according to statistical research result, to commemorate the opening ceremony of the 1964 Tokyo Olympics. In 2000, it was changed to the second Monday of October by a new law, and for this year, it is today, October 12. This is one of the background for Japan (Osaka, Nagoya, Tokyo) announcing its candidacy to host Olympic game, and today it was reported by mass media that Hiroshima and Nagasaki, the two prefectures that are the sites of nuclear bombing in World War II, are planning to announce their joint-candidacy for 2020 Olympics.
Around this time of the year sports festival is held in schools, sometime in other places such as companies. Sports festival, a whole day event, had really been a big event for the school, community and society. For example, whole family joins the school sports festival and enjoy, and parents take so many photos and videos of their children. There used to be a TV programme of it in which TV stars participated in the festival.
Usually participants are divided into 2 groups/teams of red and white to compete, and variety of games are played at the festival, some are common worldwide such as 100m sprint race, relay race and tug of war, and some other are rather Japan unique. The rather Japan unique ones are as below:-
- “Tamaire” (ball games): During a defined time, participants throw beanbags of their team colour into their team’s basket as many as they can like basket players shoot.
- Obstacle race: Participants compete the speed of going through obstacles such as going over balance beam, running under mats etc.
- Mock cavalry battle: Participants, usually boys of around 11 years old, get into teams and compete for battle.
- Three-legged race: Two people make a team. A leg of each is tied to make three legs and teams have a face of usually 100 metres.
- “Pan-kui-kyoso” Eating bread race: Bread is tied with a rope which is hung, and participants take a big bite to the bread and race to the goal with the bread.
- Centipede race: About 10 participants make a team. Their right and left foot are tied to a board (something like a ski), and the teams walk as quickly as possible toward the goal. Teamwork really counts!
- “Karimono-kyoso” borrowing race: Participants race to pick a card which states something (e.g. girl with red skirt) that he/she is asked to borrow from people present at the festival and take it/that person to the goal as quickly as possible.
In addition, there is team work gymnastics. Children practice this hard for the festival under the guidance from their teachers and on the day, they perform this to show their efforts to their family. And there is also cheering group that liven up the festival. The group is led by a cheering leader, usually a male, and they also practice a lot for the festival.
National Sports Day is also the timing in which body strength of citizens will be focused. Every year Ministry of Education, Science, Sports, and Culture execute a survey of body strength including stamina and agility. Approximately 70,000 citizens of age 6-75 are parametric model and the survey will be held May-October, whose results are analyze according to age groups and reported on the National Sports Day. According to the result reported today via mass media, the overall result for children started to improve although it had been on the declined since 1985 and therefore had been an issue. An expert, a member of the analysis team, commented that it is probably the result of step-by-step efforts of schools of increasing opportunities for exercise and sports. On the other hand, results for adults were mixture. Female of age 20-30 deteriorated but male and female of age 40+ and 65+ improved. The overall trend of body strength level is concluded that both male and female increase from 6 years old, and male reach the peak around 17 years old and female around 14 years old; however for grip strength, male reach the peak 30-34 years old and female 40-44 years old.
The survey result and analysis clarified that regular exercise and participating in sports highly contribute to maintaining high level of body strength; however, people in 20s are doing less exercises and enjoying sports compared to 15 and 30 years ago and their body strength level has dropped. Possible reasons for this include the fact that people in their 20s grew up playing indoors, with gaming, Internet and comics, too busy with their work and has insufficient time to regularly enjoy exercise and sports, and so forth. It might well need “fundamental” measures and actions to change and improve this trend and it would take time for tangible results to come out.
The second Monday of October is National Sports Day/Health-Sports Day in Japan. Its purpose is to promote health and well-being through sports, and this is the day for sports and to foster a sound mind and body. The day was originally celebrated on October 10th, the day that is most likely to be sunny at this time of the year according to statistical research result, to commemorate the opening ceremony of the 1964 Tokyo Olympics. In 2000, it was changed to the second Monday of October by a new law, and for this year, it is today, October 12. This is one of the background for Japan (Osaka, Nagoya, Tokyo) announcing its candidacy to host Olympic game, and today it was reported by mass media that Hiroshima and Nagasaki, the two prefectures that are the sites of nuclear bombing in World War II, are planning to announce their joint-candidacy for 2020 Olympics.
Around this time of the year sports festival is held in schools, sometime in other places such as companies. Sports festival, a whole day event, had really been a big event for the school, community and society. For example, whole family joins the school sports festival and enjoy, and parents take so many photos and videos of their children. There used to be a TV programme of it in which TV stars participated in the festival.
Usually participants are divided into 2 groups/teams of red and white to compete, and variety of games are played at the festival, some are common worldwide such as 100m sprint race, relay race and tug of war, and some other are rather Japan unique. The rather Japan unique ones are as below:-
- “Tamaire” (ball games): During a defined time, participants throw beanbags of their team colour into their team’s basket as many as they can like basket players shoot.
- Obstacle race: Participants compete the speed of going through obstacles such as going over balance beam, running under mats etc.
- Mock cavalry battle: Participants, usually boys of around 11 years old, get into teams and compete for battle.
- Three-legged race: Two people make a team. A leg of each is tied to make three legs and teams have a face of usually 100 metres.
- “Pan-kui-kyoso” Eating bread race: Bread is tied with a rope which is hung, and participants take a big bite to the bread and race to the goal with the bread.
- Centipede race: About 10 participants make a team. Their right and left foot are tied to a board (something like a ski), and the teams walk as quickly as possible toward the goal. Teamwork really counts!
- “Karimono-kyoso” borrowing race: Participants race to pick a card which states something (e.g. girl with red skirt) that he/she is asked to borrow from people present at the festival and take it/that person to the goal as quickly as possible.
In addition, there is team work gymnastics. Children practice this hard for the festival under the guidance from their teachers and on the day, they perform this to show their efforts to their family. And there is also cheering group that liven up the festival. The group is led by a cheering leader, usually a male, and they also practice a lot for the festival.
National Sports Day is also the timing in which body strength of citizens will be focused. Every year Ministry of Education, Science, Sports, and Culture execute a survey of body strength including stamina and agility. Approximately 70,000 citizens of age 6-75 are parametric model and the survey will be held May-October, whose results are analyze according to age groups and reported on the National Sports Day. According to the result reported today via mass media, the overall result for children started to improve although it had been on the declined since 1985 and therefore had been an issue. An expert, a member of the analysis team, commented that it is probably the result of step-by-step efforts of schools of increasing opportunities for exercise and sports. On the other hand, results for adults were mixture. Female of age 20-30 deteriorated but male and female of age 40+ and 65+ improved. The overall trend of body strength level is concluded that both male and female increase from 6 years old, and male reach the peak around 17 years old and female around 14 years old; however for grip strength, male reach the peak 30-34 years old and female 40-44 years old.
The survey result and analysis clarified that regular exercise and participating in sports highly contribute to maintaining high level of body strength; however, people in 20s are doing less exercises and enjoying sports compared to 15 and 30 years ago and their body strength level has dropped. Possible reasons for this include the fact that people in their 20s grew up playing indoors, with gaming, Internet and comics, too busy with their work and has insufficient time to regularly enjoy exercise and sports, and so forth. It might well need “fundamental” measures and actions to change and improve this trend and it would take time for tangible results to come out.
2009年10月11日日曜日
Japanese Manufacturers’ Main Businesses Returning to Black
October 10, 2009 – Osaka, Japan,
Nikkei, Japan’s leading newspaper specialized in economy and politics, reported today that main businesses of Japanese manufacture giants especially high-tech companies that once fell in the red have been going back to black. This is because of Japanese manufactures’ efforts in cost reduction, together with digital consumer electronics and automobile sales hitting the bottom attributing to demand increase of emerging markets and positive effect of government policy such as eco-point system (incentive for consumers purchasing eco-friendly consumer electronics and automobiles). Price hovering at appropriate level due to supply volume control is also a contributor of the recovery. Continuous improvement in operational income by sector would be the overall performance support for such companies in the process of recovery, although there are some uncertainty factors such as high yen.
Market recovery is conspicuous in semi-conductors, HDD and precision component. Toshiba’s flash memories used in mobile audio music players and PC recording media have returned to black for fiscal quarter of July-September instead of original expectation of October-December. Toshiba had been cutting production by 30% January-June this year. And decrease in price stopped and then demand started to recover. Hitachi’s HDD business has also been recovering; its operation income was minus 9 billion yen for April-September but is expected to return to black for October-December.
Positive effects of emerging marketing demand and government policy have led to digital consumer electronics sales hitting the bottom. Sharp’s LCD panel business was in the red by 14.7 billion yen April-June but is expected to go back to black by 16 billion yen for fiscal year ending March 2010. With incentive/tax reduction for eco (ecological & economical) cars, sales related to EV car have been good. Koito’s Japan domestic business of light supplied for Toyota’s Prius cars has been drastically improving. Its operating income was minus 1.2 billion yen for April-June but seems to have returned to black by 5+ billion for July-September.
Cost reduction is also a contribution factor for recovery. Hoya transferred its digital camera production to overseas, and together with good new product sales its business for September seems to have returned to black. Digital camera businesses of Fuji Film Holdings and Olympus are expected to return to black as well. Energy plant business of IHI was in the red by 6.2 billion for fiscal year ending March 2009 but is expected to land on 11 billion yen in black for fiscal year ending March 2010, attributing to clearing out unprofitable overseas businesses plus drop in purchasing cost.
The worldwide economic crisis and recession started autumn last year had hit directly revenues of companies, resulting in total of approximately 3.6 trillion yen in red for total of all Japanese manufacturers for fiscal year ending March 2009. Consumer electronics, automobile and component businesses were the hardest hit, with an example of Toshiba’s semiconductor business that went in the red by 280 billion yen. And then amount of red decreased to 730 billion yen for total manufacturers for April-June, which is 1/8 of January-March. Therefore many experts assume that it has hit the bottom and if recovery trend continues it is possible that the complete recovery scenario for fiscal year ending March 2010 becomes a reality.
Some possible risks for such a recovery scenario include high yen for many Japanese manufacturers whose business relies heavily on export, and uncertain business trend for January-March 2010. Machine tool and semiconductor manufacturing equipment sectors relying on increase in production and investment are quite possible to remain in the red because few companies still refrain from increasing equipment investment with the assumption of demand recovery.
The author strongly believes that performance (operational income) recovery of Japanese manufacturers has an impact on feasibility of Japanese government’s new policy and upcoming action plans as well as on overall economic recovery. Government’s revenue (corporate tax) fluctuates by the degree of recovery in their performance, and in fact this is a big topic in recent budgeting of the government for 2010. It is also the requirement for labour market recovery and stable earnings for citizens, meaning it has big impact on consumer spending. Of course, it also greatly influence investment etc.
Nikkei, Japan’s leading newspaper specialized in economy and politics, reported today that main businesses of Japanese manufacture giants especially high-tech companies that once fell in the red have been going back to black. This is because of Japanese manufactures’ efforts in cost reduction, together with digital consumer electronics and automobile sales hitting the bottom attributing to demand increase of emerging markets and positive effect of government policy such as eco-point system (incentive for consumers purchasing eco-friendly consumer electronics and automobiles). Price hovering at appropriate level due to supply volume control is also a contributor of the recovery. Continuous improvement in operational income by sector would be the overall performance support for such companies in the process of recovery, although there are some uncertainty factors such as high yen.
Market recovery is conspicuous in semi-conductors, HDD and precision component. Toshiba’s flash memories used in mobile audio music players and PC recording media have returned to black for fiscal quarter of July-September instead of original expectation of October-December. Toshiba had been cutting production by 30% January-June this year. And decrease in price stopped and then demand started to recover. Hitachi’s HDD business has also been recovering; its operation income was minus 9 billion yen for April-September but is expected to return to black for October-December.
Positive effects of emerging marketing demand and government policy have led to digital consumer electronics sales hitting the bottom. Sharp’s LCD panel business was in the red by 14.7 billion yen April-June but is expected to go back to black by 16 billion yen for fiscal year ending March 2010. With incentive/tax reduction for eco (ecological & economical) cars, sales related to EV car have been good. Koito’s Japan domestic business of light supplied for Toyota’s Prius cars has been drastically improving. Its operating income was minus 1.2 billion yen for April-June but seems to have returned to black by 5+ billion for July-September.
Cost reduction is also a contribution factor for recovery. Hoya transferred its digital camera production to overseas, and together with good new product sales its business for September seems to have returned to black. Digital camera businesses of Fuji Film Holdings and Olympus are expected to return to black as well. Energy plant business of IHI was in the red by 6.2 billion for fiscal year ending March 2009 but is expected to land on 11 billion yen in black for fiscal year ending March 2010, attributing to clearing out unprofitable overseas businesses plus drop in purchasing cost.
The worldwide economic crisis and recession started autumn last year had hit directly revenues of companies, resulting in total of approximately 3.6 trillion yen in red for total of all Japanese manufacturers for fiscal year ending March 2009. Consumer electronics, automobile and component businesses were the hardest hit, with an example of Toshiba’s semiconductor business that went in the red by 280 billion yen. And then amount of red decreased to 730 billion yen for total manufacturers for April-June, which is 1/8 of January-March. Therefore many experts assume that it has hit the bottom and if recovery trend continues it is possible that the complete recovery scenario for fiscal year ending March 2010 becomes a reality.
Some possible risks for such a recovery scenario include high yen for many Japanese manufacturers whose business relies heavily on export, and uncertain business trend for January-March 2010. Machine tool and semiconductor manufacturing equipment sectors relying on increase in production and investment are quite possible to remain in the red because few companies still refrain from increasing equipment investment with the assumption of demand recovery.
The author strongly believes that performance (operational income) recovery of Japanese manufacturers has an impact on feasibility of Japanese government’s new policy and upcoming action plans as well as on overall economic recovery. Government’s revenue (corporate tax) fluctuates by the degree of recovery in their performance, and in fact this is a big topic in recent budgeting of the government for 2010. It is also the requirement for labour market recovery and stable earnings for citizens, meaning it has big impact on consumer spending. Of course, it also greatly influence investment etc.
2009年10月10日土曜日
Digital Convergence to Shape the Ubiquitous Networking Society – From CEATEC Japan 2009
October 10, 2009 – Osaka, Japan,
CEATEC Japan, cutting-edge IT & electronics comprehensive exhibition was held in October 6-10, under the theme “Digital Convergence – Defining the Shape of the Future”. For many IT and electronics companies (perhaps especially Japanese companies), CEATEC is a good opportunity to introduce their cutting-edge technologies and concepts to the media and the general public, and this exhibition draws much attention worldwide. CEATEC Japan 2009 official website has been posting news updates, and there have already been many articles on CNET etc. There was also an evening TV news in Japan on 5th (i.e. before the opening) introducing some of the highlights.
Some highlights include future of mobile phones, new concept TV in which operation can be done without a remote control, future robots that can sing and dance or ride a bicycle, future EV car, and future nursing care products including a bed that can become a wheelchair which can be operated automatically by IT and transport system that is more user-friendly than current wheelchairs. It is amazing to see these includes products and companies not only from the traditional IT and electronics companies but also from automobiles (e.g. Nissan). The bed is of Panasonic group that has always been a major player in this exhibition. As far as the author understands, Panasonic used to introduce nursing care products in exhibition specialized in Home Care and Rehabilitation Exhibition only and not at CEATEC.
What is worth noting is that not only IT and electronics business but also automobile and healthcare business that were out of scope of this exhibition in the past also started to converge, creating new concept products, services and business, which implies the ongoing dramatic transformation of respective industries, shaping new competitive landscape in the new ubiquitous networking society. This can be explained by IT marketing principle and theory. As digitalization gets underway, convergence of products and services gets underway leading to lowering of barriers between business domain and industry. Probably the example easiest to understand for everyone is the convergence of digital camera, mobile phone and mobile application connecting to Internet.
Digital convergence has already been creating new market and business involving players from many industries such as online book, music and news, and is opening the door to the new virtualized world like the one depicted in a recent forbes.com article. The author strongly feels that digital convergence has potential to make our lives more convenient and productive in various settings including home, business, education and healthcare/nursing, opening the door to a new world. Whatever the new world may be, the author is very much fascinated by it and is looking forward to it.
References:-
CEATEC Japan 2009 Official Website (English Version)
http://www.ceatec.com/2009/en/news/index.html
Ceatec--gadget extravaganza in Japan
http://news.cnet.com/8301-1001_3-10367757-92.html?part=rss&subj=news&tag=2547-1_3-0-20
Our Virtualized World
http://www.forbes.com/2009/10/06/software-computers-enterprise-technology-virtualization-09_land.html
CEATEC Japan, cutting-edge IT & electronics comprehensive exhibition was held in October 6-10, under the theme “Digital Convergence – Defining the Shape of the Future”. For many IT and electronics companies (perhaps especially Japanese companies), CEATEC is a good opportunity to introduce their cutting-edge technologies and concepts to the media and the general public, and this exhibition draws much attention worldwide. CEATEC Japan 2009 official website has been posting news updates, and there have already been many articles on CNET etc. There was also an evening TV news in Japan on 5th (i.e. before the opening) introducing some of the highlights.
Some highlights include future of mobile phones, new concept TV in which operation can be done without a remote control, future robots that can sing and dance or ride a bicycle, future EV car, and future nursing care products including a bed that can become a wheelchair which can be operated automatically by IT and transport system that is more user-friendly than current wheelchairs. It is amazing to see these includes products and companies not only from the traditional IT and electronics companies but also from automobiles (e.g. Nissan). The bed is of Panasonic group that has always been a major player in this exhibition. As far as the author understands, Panasonic used to introduce nursing care products in exhibition specialized in Home Care and Rehabilitation Exhibition only and not at CEATEC.
What is worth noting is that not only IT and electronics business but also automobile and healthcare business that were out of scope of this exhibition in the past also started to converge, creating new concept products, services and business, which implies the ongoing dramatic transformation of respective industries, shaping new competitive landscape in the new ubiquitous networking society. This can be explained by IT marketing principle and theory. As digitalization gets underway, convergence of products and services gets underway leading to lowering of barriers between business domain and industry. Probably the example easiest to understand for everyone is the convergence of digital camera, mobile phone and mobile application connecting to Internet.
Digital convergence has already been creating new market and business involving players from many industries such as online book, music and news, and is opening the door to the new virtualized world like the one depicted in a recent forbes.com article. The author strongly feels that digital convergence has potential to make our lives more convenient and productive in various settings including home, business, education and healthcare/nursing, opening the door to a new world. Whatever the new world may be, the author is very much fascinated by it and is looking forward to it.
References:-
CEATEC Japan 2009 Official Website (English Version)
http://www.ceatec.com/2009/en/news/index.html
Ceatec--gadget extravaganza in Japan
http://news.cnet.com/8301-1001_3-10367757-92.html?part=rss&subj=news&tag=2547-1_3-0-20
Our Virtualized World
http://www.forbes.com/2009/10/06/software-computers-enterprise-technology-virtualization-09_land.html
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