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issue: January 2004 APPLIANCE Magazine

Tokyo Report
Japanese Companies Restructuring for the Better


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A report filed by Wasaku Ishida, Japanese correspondent, APPLIANCE magazine, and vice president, JARN (Japan Air Conditioning, Heating & Refrigeration News).

The major appliance market in Japan has been struggling since early 1990, and in 2002, the market shrank by 13 percent.

However, financial reports from Japanese electric/electronic companies for the first quarter of 2003 were a good mixture. Among the top 10 companies, five of them reported an improvement in profit before taxes. Still, the total profit and loss for these top ten companies for the period recorded a loss of 16.1 billion yen (approx. U.S. $147.3 million).

In response, some of these top companies have announced the following restructuring activities:

Matsushita

Matsushita has stopped manufacturing refrigerators at its Fujisawa plant and transferred production to the Kusatsu plant. The 200,000 middle-sized refrigerators produced at Fujisawa will be transferred to the Kusatsu plant, where about 1 million refrigerators will be produced.

As part of this restructuring, the following will occur:

  • The compressor division and the components division for HVAC/R will be combined into the device division.
  • The production of display cases, food processing equipment, and commercial equipment will be discontinued.
  • The production of vending machines will continue.
  • More than 300 employees will have to be relocated.

Hitachi
Hitachi Home & Life Solutions (Hitachi H & L) is expected to lay off about 400 employees by the end of 2003 through its early retirement program. In addition, some of Hitachi's component subsidiaries will be merged or liquidated, and production will be transferred overseas, most likely to Thailand.

Toshiba
The home appliance business group has been separated from Toshiba and is and looking to build alliances. In addition, Toshiba Carrier is joining together with other subsidiaries, including Toshiba Lightecs and Toshiba Appliance, to form a joint marketing company for the Japanese domestic market.

Sanyo
Sanyo has announced alliances with various companies in the last few years. For example, in 2002, it announced a joint venture with Toshiba Carrier for the development packaged air-conditioners (PAC). In April 2003, it announced a joint development project with Samsung for future room air-conditioners, including d.c. inverter R410 models. In addition, a broad collaboration agreement was made with Haier in January 2002, aiming for sales of Sanyo and Haier brand products in China through the Haier sales network. As part of the agreements, Sanyo will establish a compressor factory for refrigerators using HC near the Haier refrigerator factory in Qindao with more than 2 million units in annual capacity.

MHI
MHI has announced that it will shift the production of room air-conditioners for the Japanese market from Biwajima, Japan to Mitsubishi Heavy Industries Mahajak Air Conditioners Co., Ltd. (MACO), Thailand. This move is common to many air-conditioner manufacturers in Japan.

Fujitsu General
Fujitsu General was the first to totally shift production of export models of air-conditioners out of Japan. The company transferred production from their Hamamatsu plant to Thailand in 1993. In 2002, it closed the Hamamatsu plant entirely and transferred production of air-conditioners for the Japanese domestic market to its plant in China. As a result, Fujitsu now enjoys a luxurious position to simultaneously market the most recent models for all global markets by sharing the same tools.

 

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