ヾ(゜Д゜)ノ"英字新聞

Firms must strengthen their pillars of profit
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 report huge losses in what has been a wholesale change, after registering record profits just a year ago.
This has been particularly noticeable since last autumn. Many companies have seen their sales and profits plunge--a drop as precipitous as falling off a cliff. And since the turn of the year, many have realized that their operations will only result in further losses.
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Firms face long recession
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 in the last business year, the automaker projected an operating loss of \450 billion for this business year.
The sale of Toyota luxury cars--a top earner for the carmaker--has become sluggish in the major markets of Japan, the United States and Europe, all of which have been dealt a blow by the simultaneous global recession. Losses from fluctuations of the currency market due to the yen's steep appreciation have added to the carmaker's plight.
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 for the business year ending in 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.
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Loss-makers must go
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 \34 billion 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.
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--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.