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Lecture Note A2: Hot News on Jpns (Non-financial) Firms

1. <<8/31/98>> Automakers ranked lower by Standard & Poors on 8/19, 20/98. [Source: Nikkei Business, 8/31/98,p.12]
   1. Toyota: AAA (top rank), January, 1991-August 19, 1998;
      AA+ (lower by one rank), August 20, 1998-.
   2. Honda: A+ (fifth rank), January, 1991-early 1992;
      A (lower by one rank), early 1992-.
   3. Nissan: A+ (fifth rank), January, 1991-early 1994;
      A- (lower by two ranks), early 1994-early 1995;
      BBB+ (lower by one rank), early 1995-August 18, 1998;
      BBB- (lower by two ranks), August 19, 1998-.
   4. Mazda: BBB-, 1994-.
2. <<9/17/98/98>> Jpns Automakers and U.S. and European Automakers in Close Business Link-up.
   1. "International Business Link-up" Diagram . [Ref: Asahi News Paper, Morning ed., 9/17/98]
   2. <<9/9/98/98>> Isuzu-GM link-up: Isuzu plans to start a new manufacturing and distributive subsidiary in August 2000, producing diesel engines, as a joint business with GM.
      • This is the first time a Jpns firm produces diesel engines in the U.S. (Isuzu produces diesel engines in Thailand, Indonesia and China today.)
      • Isuzu expects more diesel engines to be used, which emitts much less CO2 than gasoline.
      • Isuzu also plans to start producing diesel engines in Poland in 1999. [In Europe, about 20% of cars (sedans and stationwagons) are using diesel engines.]
      • Capital relationship for this joint business: Isuzu, 60%; GM, 40%. [GM owns 37.5% of Isuzu capital. Isuzu may be considered a member firm of GM Group.]
   3. <<9/16/98/98>> Stronger Suzuki-GM link-up: GM has become a largest stockholder. [GM now owns 10% (<- 3.3%) of Suzuki capital.]
      • GM plans to produce small-sized cars with Suzuki in China in the near future.
3. <<8/19/98, 9/4/98>> Electric appliance makers saw a serious drop in their profit for FY1997 (March, 1998). [See Plots : Most recent consolidated data on Mfg: Electrical Appliances (Mitubishi and Hitachi), -FY1998 .]
   1. <<9/11/98>> Toshiba's (consolidated) after-tax profit for FY1998 is predicted to be zero!
   2. <<9/22/98>> Oki Electric's (consolidated) after-tax profit for FY1998 is predicted to be Minus 43 billion yen; Shyowa Electric's (consolidated) after-tax profit for FY1998 (as of December 1998) is predicted to be Minus 10 billion yen
   3. Reason for the loss: A recent sharp fall in the semiconductor (DRAM) price.
   4. <<9/30/98>> SONY is doing pretty good, however. See Plots : Most recent consolidated data on Mfg: Electrical Appliances (Sony), -FY1997.
      • Note that, recently, as much as 30% of Sony's consolidataed sales and about 10% of Hitachi 's and Mitubishi's sales is generated in the U.S.
4. <<9/14/98>> August, with "obon" holidays in Jpn, has been the month with a small number of bankrupt firms recorded for the past years.
   1. See the plot.
   2. Things this August, however, look entirely different from those in August so far, due to the bankurptcy in August of such large firms as Ohkura Shyoji and Mita Industries, which were listed on the Tokyo Stock Exchange!
      • For Mita's window-dressing financial reporting ("Hunsyoku kessan") detected on 10/13/98, see "Auditing" in Mgmt Style by Function: Finance and Accounting/Auditing.