Economy

Honda's Thai operations 'on the decline'

Updated : 11.02.2017 / Category Economy

Following poor sales, Honda Motor Co. Ltd. is to halt one of its two production lines at its factory in Ayutthaya, Thailand, by March. "It's the start of Honda's decline in the area," said a source at a rival Japanese carmaker, echoing similar growing sentiments.

Honda officials insist that shifts have doubled on the remaining production line and "output is being maintained." However, informed sources say the firm's annual Thai-based output capability--including that of Honda's second factory in eastern Prachinburi--has reduced from 420,000 vehicles to about 270,000--a drop of almost 40 percent.

Toyota trembles in face of Trump demands

Updated : 01.02.2017 / Category Economy

The North American vehicle market is poised to undergo a sea change as global automakers scramble to deal with new U.S. President Donald Trump's bluster. In particular, Toyota Motor Corp. has been singled out by Trump in a Twitter tirade. On Jan. 5, Trump tweeted: "Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax."

However, a reporter for a Japanese national newspaper suggests Trump might have some of his facts wrong. "Toyota will build a plant in Guanajuato, not Baja. And what's more, Toyota is shifting production there from Canada—it has nothing to do with the United States," said the reporter, an expert on the auto industry. "It was a completely groundless accusation. There was no need to make a big deal about it."

Nevertheless, the public criticism by Trump jolted Toyota. At the North American International Auto Show held in Detroit a few days later, Toyota President Akio Toyoda announced his company would invest $10 billion in the United States in the next five years.

The insatiable ambition of SoftBank's CEO

Updated : 10.01.2017 / Category Economy

SoftBank Group Corp. CEO Masayoshi Son stunned both the Japanese and U.S. political and business circles when he met with U.S. President-elect Donald Trump in New York on December 6 (local time).

During the 45-minute-long talks at Trump Tower, Son—known for his shrewd ability to win over influential individuals to further his own goals—promised to invest a total of $50 billion (about ¥5.7 trillion) in U.S. startups, helping create about 50,000 jobs. For his part, Trump described Son (warmly referring to him as "Masa") as "one of the great men of industry." It was the first meeting between the two men.

JT making questionable political donations in bid to stop tobacco tax hike

Updated : 07.12.2016 / Category Economy

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Antismoking is a long-established social trend that makes smokers feel out of place. And with the International Olympic Committee championing smoke-free Olympics and Paralympics, Tokyo will likely stiffen regulations in the run-up to the 2020 Games—including the rules on passive smoking.

Despite the global antismoking trend, Japan Tobacco Inc. (JT) has been putting up resistance in an attempt to protect its huge profits and vested interests. The company is accused of prioritizing corporate gain over smoking-related health issues, allegedly providing donations to politicians "in return for favors."

This article tries to shed light on JT's behind-the-scenes maneuvering in a society where antismoking is the mainstream stance.

Family tensions and succession maneuvering darken Toyota's top ranks

Updated : 01.12.2016 / Category Economy

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A complex network of family connections helped the Toyoda family create the giant conglomerate that today is centered around Toyota Motor Corp. Japan's leading carmaker now has more than 560 subsidiaries—either consolidated, or accounted for in the equity method—under its wing.

Yet amid the transfer of power at the company from Shoichiro Toyoda to his son Akio, there have emerged clear signs of friction between members of the main Toyoda family and relatives in other branches of the family, according to a former executive of Denso Corp., a Toyota group firm.

In the past, members of the sprawling Toyoda family tree were on more familiar terms, calling each other by their family nicknames, according to inside sources. Members of the three branch families—referred to as the Shinke, Oshikiri and Chikaramachi branches—would gather socially with their relatives in the main Toyoda family a few times a year.

The truth behind the Dentsu scandals

Updated : 07.11.2016 / Category Economy

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A company's true nature is often revealed by the way it handles trouble.

Since late September, a number of scandals have arisen at Dentsu Inc., Japan's leading advertising agency, including the overcharging of clients for digital advertising services and a ruling by a Tokyo labor standards inspection office that recognized a former Dentsu employee's suicide as "death from overwork." One of the firm's employees, meanwhile, described the company's handling of such affairs as "among the worst."

Dentsu workers often patronizingly lecture client firms about marketing and other matters, but when faced with its own problems, Dentsu itself is fundamentally ill-prepared.

Japan's ¥1 trillion economic assistance to Russia a foolhardy ploy to regain Northern Territories

Updated : 11.10.2016 / Category Economy

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At a regular morning press conference on Sept. 2, Chief Cabinet Secretary Yoshihide Suga showed little patience with a question about whether he acknowledged a plan by the Ministry of Economy, Trade and Industry (METI) to invest in Rosneft, a major oil company effectively owned by the Russian government. "There's no truth in that story," he replied curtly. "The ministry isn't discussing it." The top Japanese government spokesman then refused to answer further questions.

Japan-Russia summit talks were scheduled to take place that same day, and, in the afternoon, Prime Minister Shinzo Abe flew to Vladivostok for his 14th meeting with Russian President Vladimir Putin. But, with a scoop that targeted the meeting, the Nihon Keizai Shimbun (Nikkei) ran a story on its front page with a headline that proclaimed "Govt to offer comprehensive cooperation to Russia in energy field."

Toyota unduly exploiting subcontractors

Updated : 15.09.2016 / Category Economy

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Subcontractors that manufacture auto parts for Toyota Motor Corp. were stunned by a report that the automaking giant had downwardly revised its operating profits for the current term to 43.9 percent, representing a drop on the same term last year.

But it was not the deterioration in the firm's business performance that shook the subcontractors, rather, it was the prospect of having to make price cuts—something that Toyota was certain to demand.

Toyota and its primary cooperative companies ordinarily start negotiations over procurements for the second half of the fiscal year in September. "This year, Toyota hinted as early as July that we should cut prices further because it had experienced a decline in business performance due to the stronger yen," said a high-ranking official of an auto parts manufacturer with links to Toyota. "This demonstrates Toyota's extraordinary obsession with price reductions."

Idemitsu's internal mudslinging having far-reaching ramifications

Updated : 05.09.2016 / Category Economy

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This is no longer a feud affecting just the founding family of Idemitsu Kosan Co. Ltd., Japan's second largest oil wholesaler. In mid-August, the head of one of Japan's three megabanks received a phone call from the Ministry of Economy, Trade and Industry.

"Your bank doesn't really intend to antagonize the ministry, does it?" the senior METI official said down the line.

In early August, the second act unfolded in the tense drama between Idemitsu's founding family and the company's management over the plan to merge Idemitsu with Showa Shell Sekiyu K.K., Japan's fifth-largest oil wholesaler. The founding family opposes the merger. On August 3, Shosuke Idemitsu, the eldest son of founder Sazo Idemitsu and holder of 34 percent of Idemitsu shares (with voting rights), announced he had bought a 0.1 percent stake in Showa Shell for about ¥400 million.

Mitsui & Co.'s 15 cursed years: Powerful chairmen blight a major trading house

Updated : 01.09.2016 / Category Economy

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This composite photo shows Masami Iijima, left, and Shoei Utsuda

About 15 years have elapsed since two Mitsui & Co. employees were arrested in connection with a power generator project championed by then Diet member Muneo Suzuki, plunging the major Japanese trading house into a quagmire.

Mitsui has since strived to restore the public trust it once enjoyed, the first step being the hasty appointments of Nobuo Ohashi as chairman and Shoei Utsuda as president in October 2002. The memorial service held July 4 for Ohashi, who passed away in April, may offer some clues as to what is really going on at the trading house, which suffered a huge deficit in the last business year following years of robust performance.

A large number of people paid tribute to Ohashi at the memorial service held at Tokyo's Imperial Hotel. The ceremony was conceived to commemorate Ohashi's achievements and was obviously important to Mitsui, but current President Tatsuo Yasunaga left the venue early for unknown reasons, leaving Chairman Masami Iijima to deal with visiting guests, according to a former Mitsui executive who attended the service.

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