Friday May 25, 2012

JAPAN NEWS AND DISCUSSION

'Made in Japan' brand at crossroads as firms ponder moving production overseas

Business Nov. 17, 2011 - 09:59AM JST ( 22 )

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22 Comments

2

Antonios_MNov. 17, 2011 - 08:10AM JST

Strong yen is killing Japan...
-2

alladinNov. 17, 2011 - 08:16AM JST

I think it`s not only the strong yen thats killing Japan, but the Japanese people themselves thats destroying the once good image that Japan no longer has. With a government that is a habitual liar and with the many companies in Japan that are getting hit with scandal after scandal, Japan no longer can afford to do business within their own country because the made in Japan products are getting devalued by the day which is very sad, but a true fact.
-11

tmarieNov. 17, 2011 - 08:29AM JST

Not sure why this article is coming out now. Toyota, Honda, Nissan... have all been making cars abroad for years - Toyota employs from Americans in the US than any of the American car companies.

Indeed the yen is killing companies but so is the greed of those at the top, the pathetic labour laws here (good luck trying to fire a slacker who does nothing) and the public's habit of burying their head in the sand and not facing reality that their country is going down the drain - plenty of reasons on that one. The revolving door of PMs certainly isn't helping!
1

soldaveNov. 17, 2011 - 08:41AM JST

The strong Yen is a factor, but in some industries it is also because of how the companies see themselves. In one industry I have some links with, Japanese companies feel that because their product is made in Japan, it is automatically better than its competition (and I'm not just talking about Chinese replicas). Prices are inflated hugely and people are realising that the Japanese products are not worth the huge excess in cost over alternatives offered in other countries.
-1

sfjp330Nov. 17, 2011 - 08:44AM JST

alladinNov. 17, 2011 - 08:16AM JST. I think it`s not only the strong yen thats killing Japan, but the Japanese people themselves thats destroying the once good image that Japan no longer has. With a government that is a habitual liar and with the many companies in Japan that are getting hit with scandal after scandal, Japan no longer can afford to do business within their own country because the made in Japan products are getting devalued by the day which is very sad, but a true fact.

Yen exchange rate has alot to do with it, but the main problem in Japan manufacturing is the high labor cost compared to China and other emerging countries. Japan has to adjust like the U.S. companies that manufacturer their products overseas.
1

TumbleDryNov. 17, 2011 - 09:23AM JST

“Building factories in China means we will give our know-how and personnel resources to our future rivals,” Sekiya said.

This kind of summarizes the whole article. An another risk is if the current situation reverses after most goods are produced overseas and yen rises, we won't be able to afford most of the thing we rely on and Japan would have lost manufacturing skills to bring back productions. Companies might increase their profits from overseas operations but the other day in a different article, it was said that 60% Japanese economy relies on consuming goods. Moreover, the engineering skills might stay in the country for now but that will also erode. Tuition in the west for higher educations are becoming unaffordable and there isn't much unskilled jobs around. More and more Chinese get higher educations abroad like in the US, Japan and Europe but don't stay there since China will offer more and more opportunities to them.

The government is absolutely powerless and Japan is a sitting duck waiting to be shot at.
-1

tkoind2Nov. 17, 2011 - 09:37AM JST

Companies enjoy the protection, support and benefits of being a part of a country, until hard times come. Then what? They pack up and leave taking jobs with them and abandoning all the people and the country who supported their business for years.

Working people, who cannot pack up and relocate to other countries are left to fend for themselves. You need only talk to the people of Detroit of Michigan to see how well that has gone for them. Generations of working class prosperous communities leveled to nothing more than slums and pits of despair.

It is the fact that the world is driven by profits first that is the problem in the end. It is why speculation has the yen so high. Why companies choose profits over loyalty to workers and communities. It is a model that can no longer work as the world economy has brutally illustrated over the past several years. And yet, here we are reading about another round of it.

Who do the manufacturers think will buy their products and fuel their new prosperity elsewhere? American consumers cannot because of all the lost jobs. Japanese will join those ranks soon with no spending power. And our newly baptised consumers in India and China will soon find they cannot either. So where is the long term win of moving everything abroad? Sure you get more profits in the near term, but the gutting of jobs from the major economies will eventually come back to haunt these companies as we have seen in the US already.
-2

tkoind2Nov. 17, 2011 - 09:37AM JST

Capitalism as it stands today is unsustainable. It is only a matter of time before it collapses and we have a global depression that will make the 1929-30's depression look like a grand old time. We dodged, just barely in 2008 and we are riding the edge still today in 2011.

What really needs to change are consumers and workers standing up to demand that companies stand fast and work solutions to keep jobs and remain loyal to communities. Otherwise we stop buying their products and they fail anyway. It is time that corporations stood in the economic trenches with workers, or we bring them down and replace them with industry that will!
1

smithinjapanNov. 17, 2011 - 09:47AM JST

Soldave beat me to it: it's not only the strong yen, but the attitude that 'Made in Japan' automatically means superior products, and that just isn't the case with everything anymore (not that it WAS with everything, but still). Corporate practices, along with said attitude, are also hurting things.

Anyway, this has been in the works for a while -- it's not something that's happened over night. Nor will the government be able to stop it over night or in the coming years. Sad to say, but Japan's reign in this part of the world may be at an end.
-1

WurthingtonNov. 17, 2011 - 10:02AM JST

Just look at history and one will know that Japanese electronic consumer related companies do not have a firm grip on reality. Long ago U.S. companies like GE, Victor, Zenith, Motorola and many more got out of the consumer biz and into bigger ticket industrial. Some Japanese companies, of course, have also done this, but not enough. They are manufacturing in China and elsewhere but still cling to domestic production because laying off people in Japan is expensive due to large compensation packages. Sony is in a very bad spot as they have practically no industrial exposure and a large domestic footprint. In addition to this Japan is not coming up with any new ground breaking technology. The Sony readers us technology from Taiwan and Nintendo 3DS is a joke as people get dizzy more than anything using the game. Japan is basically screwed. If they opened their markets and deregulated everything then the smart people that are in abundance in Japan may finally be able to use their smarts and do something but the Govt and Corporate Japan will just continue to suppress anything new and unknown.
0

ElvensilvanNov. 17, 2011 - 10:10AM JST

tmarie: Toyota, Honda, Nissan... have all been making cars abroad for years - Toyota employs from Americans in the US than any of the American car companies

This is true, however, companies are now considering production abroad for items that were previously exclusively made in Japan. An example is Toyota, the plan now seems to be for the exception of Prius, all other cars which are currently exported may soon be produced in other countries. Which means less exports for Japan.
0

marcelitoNov. 17, 2011 - 10:14AM JST

Does Japan need any more compelling resons to join the TPP than this?
1

cactusJackNov. 17, 2011 - 10:50AM JST

The latest currency intervention by Japan is losing ground.
4

The Munya TimesNov. 17, 2011 - 11:06AM JST

Strong yen is killing Japan...

Japan is killing Japan.

Made in Japan

Once admired and highly reputed, today history.
-3

tmarieNov. 17, 2011 - 11:27AM JST

I can't blame the companies. Cheaper in other countries to produce? Off you go. If I ran a company, I would do the same thing. Who wouldn't?
1

The Munya TimesNov. 17, 2011 - 11:36AM JST

@tmarie

Who wouldn't?

Those who want stability, satisfied wit fair profit and think of the interest of their own country. Not easy I admit.
-1

AiserXNov. 17, 2011 - 11:56AM JST

What really needs to change are consumers and workers standing up to demand that companies stand fast and work solutions to keep jobs and remain loyal to communities.

There is something called private property rights. Companies don't belong to you, or me, or the communities and that goes double for the Govt. They belong to the private entrepreneur whom saved, invested and risked his/her capital to build a successful firm. If they wish to move over seas then it is most likely because of Govt intervention in the market place making the business environment hostile.

It is time that corporations stood in the economic trenches with workers, or we bring them down and replace them with industry that will!

So you wish to use violence against companies built by the individual to "keep" a job that really is not yours but the risk takers?

This whole idea that a "strong yen" is killing or hurting Japan is bunk. $1 = 77.057 Yen. The yen is an extremely weak currency with very little purchasing power. The Japanese rely on trading goods for foreign goods and minerals in order to manufacture those goods made in Japan. Then you have to consider the fact that ultimately all fiat ( paper ) currencies are ultimately pegged to the USD. Which means as the FED RES prints more money via Q.E (P.C for inflation) the values of the dollar erodes, which means all other fiat currencies have to keep pace with the dollar to maintain that stable conversion exchange which means printing. Collectively all fiat currencies are becoming weaker.
-4

tmarieNov. 17, 2011 - 12:04PM JST

Munya, cheaper countries offer all of that - with the right management. Offered here too with the right management but well, we know that isn't happening all too often in Japan Inc...
1

Johannes WeberNov. 17, 2011 - 04:27PM JST

I think the Japanese situation now is comparable with the German situation ten to fifteen years ago. Germany has always (for more than 50 years) been and still is renowned for its high quality of products. And Germany had the highest labour cost of Europe. So the economic situation is very similar to Japan.

Then the government decided to take lots of measure to reduce labour costs. The consequence was that labour costs increases slower in Germany than the eurozone average. This was a big boost to productivity. Thus, Germany still maintains about twice the growth of the eurozone average and is still worldwide number two in terms of exports (a position Germany holds for many years now).

Of course, disparity of German society increased. There are a lot of discussions going on in Germany, whether there is a necessity of radical fiscal measures to balance out the disparity somewhat. This might be interesting in the future.

Japan must redefine its economy as well. The industry with the highest growth rates in Germany is green energy. This sector created more than 600000 domestic jobs in the last decade. Far more than automotive industry, which is still very healthy. Green energy is also a sector, which holds plenty of jobs for people lacking higher education (after all, someone must build the new power plants or grids), and it can't be easily outsourced to another country. Finally, green technology can be exported in the future. Japan's future is either green energy or economic decline.

@AiserX:

Comparing the absolute numbers of currencies doesn't make any sense. You must compare purchasing power of these currencies to get a meaningful result. And the dominance of the USD is gradually becoming weaker. The US doesn't have to like it, but the standard currencies of the future will be bundle where the USD is just one among many.
-1

AiserXNov. 17, 2011 - 09:07PM JST

The US doesn't have to like it, but the standard currencies of the future will be bundle where the USD is just one among many.

The future of currency will not be some basket of currency or an SDR. It will have to be some form of Gold and Silver standard. The current monetary system is actually very young only about 41 years old of 100% fiat currency. It was not until 1971 that the U.S de-pegged off the Gold standard and not until 2000 that Switzerland also de-pegged off Gold. People now are realizing the failure that is fiat currency and rediscovering Gold and Silver money. Also, comparing absolute numbers DOES make sense because the USD is the reserve currency of the world and therefore everything is compared to the USD in price. It used to be that everything including the USD was priced against GLD but as GLD continues to rise i price, it will ultimately collapse the fiat monetary system. It's also important to note that in 2000 the price of GLD was like $374 dollars per Oz ow its hovering around $1800 per Oz
0

PT24881Nov. 18, 2011 - 01:17AM JST

International product life cycle : Produce at home meeting domestic needs -> produce at home meeting domestic & export needs -> produce overseas meeting foreign needs & produce at home meeting home market needs -> produce overseas meeting both foreign & home market needs. ( no more production at home ) the cycle seems to be 'deja vu' in many countries' development process regardless of the Yen's strength ?
0

bajhista65Nov. 20, 2011 - 04:49AM JST

“Building factories in China means we will give our know-how and personnel resources to our future rivals,” Sekiya said.

That's the biggest mistake Japanese Companies did.

Start from the beginning again like after WWII when Japan was down and with everyone uniting to build Japan until it succeeded and champion productions and exports all over the world. With the Japanese sacrifices and "Bushido" Japan can and will rise again. Bring back all the Japanese manufacturing companies back to Japan for a start. Japanese are well discipline and will understand the sacrifices.