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2009年2月 7日 (土)

企業決算総崩れ 「選択と集中」で乗り切れ

The Yomiuri Shimbun (Feb. 7, 2009)

Firms must strengthen their pillars of profit

企業決算総崩れ 「選択と集中」で乗り切れ(27日付・読売社説)

One after another, leading Japanese companies have revised downward their earnings projections for the year ending March.


We wonder how many corporate executives could have predicted only six months ago that their firms would report a drastic business deterioration. Business performances are worsening both rapidly and substantially, regardless of the type of industry.



It is not unusual to see corporations that just a year ago were registering record profits now reporting huge losses in what has been a wholesale change.



Firms face long recession

Since autumn, many companies have seen their sales and profits plunge--a drop as precipitous as falling off cliff. And since the turn of the year, many have realized that their operations will only result in further losses.


With no sign of business deterioration reaching the bottom soon, companies must brace themselves for a prolonged recession and hunker down to improve their profitability.


Toyota Motor Corp. on Friday revised its projection for the 2008 business year to March for the third time, following reports in November and December. While it posted an operating profit of 2.2 trillion yen in the last business year, the automaker projected an operating loss of 450 billion yen for this business year.


Sales of its highly profitable, luxury cars are slumping in the major markets of Japan, the United States and Europe, which have been hit hard by the simultaneous global recession. The automaker also is riddled with losses from fluctuations of the currency market due to the steep appreciation of the yen.


There is no denying, also, that Toyota's strategy of expanding its operations to become the top automaker in the world--in terms of both production and sales--has gone too far, compounding its business woes.


Companies in the electrical machinery industry also are struggling. Hitachi Ltd. is expected to report a net loss of 700 billion yen for the business year ending March, the biggest ever for a Japanese manufacturer. Panasonic Corp. and Sony Corp. also have been tormented by poor sales of flat-screen TVs and semiconductors.


The tendency of virtually all companies in this industry to rush to manufacture the latest popular product has weakened their strength to weather a recession. It is imperative that such firms now jettison loss-making departments and identify their pillars of profit-generation--the business strategy known as "selection and concentration."


In the nonmanufacturing sector, airlines are suffering noticeably poor sales. The recession and the yen's appreciation have drastically reduced the volume of both international passengers and cargo. Japan Airlines Corp. anticipates a group net loss of 340 billion yen for this current business year.


The Construction and Transport Ministry plans to compile a package of measures by the end of March to support the ailing industry. It should expedite its study of what kind of government support could be offered.


The implications of the recession are becoming ever more serious as exemplified by the bankruptcy of condominium developer Japan General Estate Co.


Mitsubishi UFJ Financial Group and other major financial groups also are likely to see drastically reduced profits.



Some silver linings

Despite the gloomy business climate, however, Nintendo Co. is posting record operating profits thanks to a series of hit video-game products.


Many Japanese companies carried out major restructuring after the recession that followed the bursting of the bubble economy in the early 1990s. Therefore, they should not have exhausted their fundamental corporate strength--not yet. Taxing their ingenuity to cultivate new business fields, which they can then foster to boost their business strength, holds the key to firms' long-term survival.


(From The Yomiuri Shimbun, Feb. 7, 2009)

2009270132  読売新聞)


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