June 2nd, 2010
04:38 AM GMT
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WANTED: CEO to lead a blue-chip country slightly past its prime.

Must be experienced consensus builder who can appeal to the nation’s urban elite while appeasing its politically powerful rural communities. Ability to harness nation’s spirit of innovation amid its revolving-door politics preferred.

Must be a self-starter who can get things done in one of the most politically conservative nations in Asia - in one year or less.

After eight months in office, Japanese Prime Minister Yukio Hatoyama is out. No amount of multicolored fashion statements could save his approval rating.

It is an ignoble end for Hatoyama. His Democratic Party of Japan defeated the Liberal Democratic Party, which had a virtual stranglehold on Japanese politics since World War II.  But any hopes that the party’s victory would bring significant change to Japanese politics are dimming.

If there is any consolation for Hatoyama, he is in good company – Japan has had four new prime ministers in four years. Indeed, looking over the history of Japanese prime ministers in the past 50 years, few survive longer than a year or two.

However, it’s interesting to note that Japan's golden age of durable prime ministers seems to have been from 1957 to 1972 – where in a 15-year period of time the nation had three prime ministers. It also marks a time when the nation had its greatest era of economic expansion, with annual growth rates that rival that of China today and propelled the nation to the second largest economy in the world.

It makes one wonder: Is Japan’s political instability the result, or the cause, of Japan’s economic doldrums?



April 28th, 2010
06:23 AM GMT
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Tokyo, Japan – As a producer for CNN International, I’ve been lucky enough to travel the world to cover important, yet adrenaline-filled events. I’ve been around exploding IEDs, mobs demanding political equity and witnessed the global meltdown of the world’s second largest economy.

Yet putting my baby into day care in Tokyo was the toughest competition I ever went through in my life. Child care facilities for small infants are called hoikuens (Nurturing Garden) in Japan. They are the MUST item for any working mother in Japan where hiring nannies is a near-impossibility.

The cost is prohibitive in this culture, where domestic assistance is considered a jaw-dropping luxury. Public or government-subsidized hoikuens are relatively affordable at about US$600-800 a month (more affordable depending on your income level) with reliable caretakers. Not being able to get a spot in a hoikuen means financial suicide, or giving up your job to stay home with your baby.

After the first few months of my maternity leave with my newborn Anjin, I picked up the phone and started making calls to find a day care center. I was scheduled to return to work and absolutely needed help. A few phone calls were enough to realize that I was facing a monumental crisis. I could not find a single day care with an opening for my son!

One popular private day care in my neighborhood told me they were booked up to TWO years ahead. Yes, some clever working women book day care as soon as conception. But I was a slow turtle. It was well before Christmas when I realized this crisis. Japan’s government estimates 46,000 children are on waiting lists to get into day care. I did not have time to be 46,001. I had to find a day care, any day care, before April when I was scheduled to return to work.

I had a new assignment, perhaps the most pressing of my career. The competition is tough for public day care and you must convince the ward office that you are desperate, or you go to the back of the line. In the Setagaya area of Tokyo where I live, the ward office handles the placement of babies to day care and they have a point system to chart your desperation.

My husband Richard and I both work full time, which gave us 50 points each, equaling 100 points. I will be just out of maternity leave – another 5 points. If you are a single mother, you get another 20 points, if you receive social security, another 10 points. My single mother friend advised me to go to the ward office and show up with a desperate face and a sob letter. I did that, toting my adorable new born in my Baby Bjorn baby carrier. I did everything I could think of. We prayed and crossed our fingers to win this day care lottery.

We waited, and waited, and waited. My return date to work loomed, as I feared the prospect of sticking my child under my desk and towing him around while coordinating live shots for my reporter. After a month, we got the news. Our point score, because we had no child care options, put us barely over the minimum required and we got a day care slot.

The day care center wasn’t close to our home. The one next to our home, a really great day care center with a big garden, was really popular - we were 23rd out of 56 applicants. But a day care center about 15 minutes away got us in - we snagged the very last spot.

To say my husband and I were relieved would be a gross understatement. Some mothers describe entry into a day care in Japan as being more difficult than getting into Japan’s top university. We were, however, angry for the hassle and stress that we went through, along with all the working parents in Japan. It’s an unnecessary competition, which the government has for years been promising to eliminate for the sake of making it easier to raise children.

The government says we need more children, i.e. a future working force. By 2050, 40 percent of Japan will be over the age of 65. But if the nation needs to have more children, it should not discourage parents to have more children.

Working women are forced to give up careers after getting pregnant, anticipating trouble if they continue working. In April 2009 when we finally took our nine-month-old Anjin to his first day of day care, tens of thousands of other children, along with their mothers, were left out. At the beginning of 2010, 46,000 children were in the waiting queue. Behind them, I can see many faces of women desperately willing to work, earning salaries, and hey, paying the national tax as a result.

My mother was the very first working woman in her company back in the 1960s. My parents went through a back-breaking effort to find anyone who could take care of me while she was at the office. The 1960’s was a time when all working mothers in Japan put together a movement to push the government to increase day care centers for working mothers.

The slogan was: “Create as many child care centers as post boxes,” so that anyone who wants to work can put their children in a safe place. Four decades later, her daughter is struggling with exactly the same issue as she did. This simply shows how little things have improved for working mothers in this country.

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April 14th, 2010
12:32 PM GMT
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After a series of safety recalls, the Japanese automaker has been trying to move on, pledging better safety to its customers.

Now Toyota's luxury sports utility vehicle, the Lexus GX 460, has been slapped with a rare "Don't Buy" warning from influential magazine Consumer Reports.

The magazine's testers believe that the SUV has a handling problem around sharp turns. During the tests, the testers found the vehicle slid nearly sideways before the electronics stability controls kicked in.

Their verdict? They wouldn't want to drive it with their families in the car.

The safety warning is the latest blow to Toyota's battered image. However, the carmaker's attitude appears to have changed. Toyota moved swiftly to address the issue. It suspended the sale of the GX460, is offering loaner vehicles to concerned customers, and says its engineers are already working hard to correct any problem.

Toyota certainly wants to salvage its reputation as a maker of safe, reliable cars.

Would you buy a Toyota car today?



March 11th, 2010
10:35 AM GMT
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Tokyo, Japan – There's a scene in Steven Spielberg's 2002 movie "Minority Report" that’s stuck with me, even many years after I initially saw the film. As Tom Cruise walks through a mall, cameras lining the ceilings and walls scan his retinas and advertisements custom-made for him pop up. He enjoys beer, so up pops a Guinness ad. But the electronic tracking becomes problematic when Cruise is trying to hide from the authorities, realizing that it’s impossible in his futuristic world.

Well, that future has arrived in Tokyo. NEC has developed an advertisement that follows a similar idea to what was imagined in "Minority Report," with a camera installed inside an electronic billboard that reads your face.

Using facial recognition technology, an internal computer determines your gender and your age. The billboard then pulls up an ad based on your demographic, targeting your best possible interest. The billboard I tried out saw that I was indeed a woman in her thirties and... lo and behold, pulled up a very appealing lunch advertisement.

To be clear, it didn’t read my retina and didn’t talk to me. But the billboard did capture my image, store my demographic data and will send that information on to the company.

How can this work so quickly and so accurately, I asked NEC's engineer Junko Amagai. She started waxing engineer-like and lost me fairly quickly, talking about numbers, logarithms and data storage. But the bottom line is that facial-recognition technology has just gotten much more pedestrian - down to the pedestrians walking by these digital ads.

"This is a new age of advertising," Amagai said. "We can learn something we never knew for marketing." Amagai explained how currently street advertising is a one-way game and companies never get real-time data from passers-by. This system changes that.

The NEC technology estimates your age to within 10 years. The technology is even more accurate for a new system it is testing and had on display at a recent fair in Tokyo. I was surprised to see it nail my age nearly every time.

Does it make one feel a little, say, overly-observed? Art Frickus, a consultant from the Netherlands, certainly didn’t feel that way. "I believe in one-on-one communication," said Frickus. “All your messages must be relevant. So that’s why I believe in this kind of thing. As long as the content is not objectionable, I don't see any problem with it."

NEC, aware of some potential unease as it launches the product for testing in the United States, says signs will clearly state to observers that a camera is installed in the billboard. Images will not be saved, stressed NEC. The company then made a bold statement about the global prospects for such electronic advertising.

"Ten percent of digital signage will be like this," said NEC spokesman Kosuke Yamauchi. How soon? In two to three years, he explained. That’s not within tech-loving Japan, he said. That's a global prediction, from the United States to the EU to China.

So, naturally, one must wonder what will happen in say, 10 years. Will we see electronic tracking as sophisticated as what was imagined in "Minority Report?"

I dare not even try and guess.



March 2nd, 2010
01:32 PM GMT
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As I sit on the floor at the Toyota stand at the Geneva Motor Show – such is the crush at the moment – waiting to interview a European executive, the troubled Japanese car maker's sporty prototype, FT-86, silently rotates on its platform, much to the excitement of the motor media trade.

Toyota's sporty prototype, the FT-86S.
Toyota's sporty prototype, the FT-86S.

This red sports car is touted by Toyota as a return to "exciting and emotional" products.

There are no outward signs that the world's biggest automaker is facing so many bumps in the road.

But the car industry thinks long term. Toyota is showing its third generation Prius in Europe for the first time, a Prius plug in – a first for me – and a massive roll out of Hybrid technology for many of its smaller cars.

John Fleming of Ford Europe told me it sees no impact, good or bad, from the Toyota mess.

Meanwhile, the CEO of Aston Martin proudly showed off its smallest car, the tiny Cygnet, which is based on the Toyota iQ.  It’s a heck of a gamble for a super luxury brand to introduce a small Toyota-based model with the AM wings.

Starting at 30,000 euros ($40,461), the company says its customers would use it to nip around the city before jumping into a bigger model for the evening.

Images from Geneva Motor Show

For all the wrong reasons, the Geneva Motor Show is Toyota's show. People here wonder when the company can get back to worrying about being number one?

Watch my interview with Andrea Formica, Toyota Europe's Senior Vice President, on Quest Means Business on Wednesday at 2000 CET, 0300 HK.

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February 16th, 2010
11:40 AM GMT
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Toshiro Era doesn’t look like a radical. Dressed in his conservative blue blazer and tie, he looks like your average businessman in Japan.

But when he starts talking about his plans for corporate Japan, “radical” is among the words that leap to the minds of Japan, Inc. watchers.

Don’t lie. Move quickly. Be transparent. Allow in the media. Get your CEO out front early, even if there’s no consensus.

That’s Era’s message as he lectures two dozen senior managers at a food manufacturing plant two hours outside of Tokyo. It’s the opposite message most of the graying men in this room have heard their entire lives in corporate Japan. They need to change when crisis hits, argues Era.

“Japan is a homogenous and monolingual society. We assume we can gain understanding if we explain well later, even if we don’t talk about it immediately. Unlike Western companies, Japanese companies tend to specify the cause of the problem and fact-find internally first, before coping with the crisis. This move looks very slow and it is the worst move you can make when it comes to crisis management. Japanese companies, especially a conservative company like Toyota, will misstep,” said Era.

Temple University Professor and Japan scholar Jeffrey Kingston says Toyota followed the secretive rules of corporate Japan, a culture that closes off amid challenges instead of opening up.

“In Japan, there has been a greater movement towards more transparency, more accountability, better communication, but it’s a slow movement. This case highlights how much farther it has to go,” said Kingston.

Former National Highway Traffic Safety Administration administrator Joan Claybrook says when safety problems with Toyota’s cars began to emerge, Toyota as a corporation closed ranks.

The NHTSA was also not on the ball and that led to the ongoing safety issues, says Claybrook. “There’s too much secrecy that Toyota was allowed to get away with– withholding information, with not being transparent and forthcoming with the Department of Transportation. And as a result, we’ve had people die, and be injured, and I’m sure there are going to be more.”

Preventing further problems will require a culture change within Toyota, says Kingston. It’s something that appears to be happening, as Toyota’s President, Akio Toyoda, makes more public appearances and reassurances to his consumers.

He has yet to confirm that he will testify before US lawmakers in Washington February 24 and 25, something that Kingston says will be the marker of a true turning point for Toyota’s internal culture.

Back at Era’s seminar at the food manufacturing plant, he’s running through various examples of failures within corporate Japan. With his power point presentation and laser pointer, Era pushed the senior managers to go against the corporate grain. Change is never easy, he says, especially in Japan. But Toyota is proving that sometimes it needs to happen.

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September 28th, 2009
12:20 PM GMT
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TOKYO, Japan - Imagine if your paycheck dropped 15 to 20 percent, without cause. You continue showing up for work at the same time, your job performance doesn't change, you don't change anything - but on Friday, your paycheck is 15 to 20 percent less.

Who would be happy?

Well, that's what sort of happened to Japan's biggest companies, thanks to the strong yen.

Now before your eyes glaze over at another currency story, consider this figure, cited by Toyota in a quarterly earnings report: A movement of one yen equals approximately U.S. $400 million for the company.

Before the global economic slowdown, one dollar was routinely worth 110 or 120 yen.  Today, the yen hit a new eight month-high (and the dollar a big low) of just under 89 - that equals about $12 billion in loss.

Without looking at how companies are managed or how the global economy is moving, these companies have already lost billions of dollars, thanks to the currency market.

Companies like Toyota, Honda and Sony are global companies that export to consumer-hungry America, the land of the dollar. Not only do they have to cope with a slowdown in demand, the yen is hammering their bottom line. Not an enviable business position.

Japan's new government came in on a wave of consumer outrage, saying it would get more money into the hands of the consumer.

Japanese Finance Minister Hirohisa Fujii told reporters that the government was not considering jumping into the market to sell the yen and help exporters. No more trickle down like the old government, pledged the incoming Democratic Party of Japan. The mantra of the day is trickle up. Economists wait to see if the new government is right.

Meanwhile, consumers in Japan cheer the news and enjoy the power of their currency at home. But in the boardrooms across Tokyo, there must be quite a different sentiment. They're probably wondering when that 20 percent will come back.

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May 14th, 2009
12:31 PM GMT
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TOKYO, Japan - I’d been in Tokyo for just a couple of days when we went to visit Akihabara, Tokyo’s electronics Mecca. Coming from my most recent post in Havana, it was as it I’d landed on the moon.

Everywhere you look are neon billboards hawking the latest playstation game as if it were a Hollywood film. Giant flatscreen TVs, camcorders and digital cameras jockey for space with the latest in cellphone/TV/PDA/portable audio players.

A bit of a jolt after the anti-capitalist island, where most billboards are hand-painted government propaganda.

We were in Akihabara to guage how shoppers felt about Sony’s offerings for a story to release with Sony’s financial results for 2008.  And honestly, most people we talked to were upbeat about Sony’s products. One young Chinese woman in town to shop told us “Chinese people love Sony!”

But it was hard not to spot signs of Sony’s problems. On a street filled with shoppers listening to their iPods, the Sony Walkman seemed an out-of-step afterthought. And one young man told us he loved Sony’s designs, but added that all the company’s products seemed overpriced.

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April 1st, 2009
09:05 AM GMT
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You don't really notice Haruka Nishimatsu when he passes you in the hall. A middle-aged man in a suit, he blends into the working crowd at Japan Airline's headquarters in Tokyo.

JAL President Haruka Nishimatsu, center, shares a light moment in front of a jet engine.
JAL President Haruka Nishimatsu, center, shares a light moment in front of a jet engine.

"Why should I stick out?" Nishimatsu says out loud to me.

"Well, you are the CEO and Chairman of this multi-billion dollar international airline," I replied.

"So?" says Nishimatsu. "That doesn't make me special."

That philosophy, that he's just like everyone else trying to make it through Japan's recession, is why he takes the city bus to work, eats in the cafeteria with his employees and strolls through the operations room at the airport. When the company looked to cut costs, he eliminated every single expensive perk of his job. He took away the corner office and chauffeur. Then he slashed his pay dramatically, so that in 2007 he made less than his pilots.

JAL can use every penny it saves. This fiscal year, the airline expects to lose $34 million dollars after passenger traffic fell 20 percent and cargo loads fell 40 percent. It's a global company that lives and dies by the direction of the global consumer and economy.

"I understand there are different conditions in terms of the economy for each country, but I think these economic issues need to be solved globally, rather than solved country by country," says Nishimatsu. "I hope the G20 will give a clear direction to the global economy."

Nishimatsu also believes the solution must begin with the financial institutions and continue to tighter regulations.

But he points to corporate culture as the long-term solution. Like the AIG bonuses, Nishimatsu says, "shocked" him. "It's like they're from another planet," he says.

A lesson of this recession, he hopes, will be that corporations don't solely pursue profit and instead focus on the long-term financial health of the company and employ people and help society. Together with shared sacrifice, he believes, the global economy will recover - but only if everyone from the CEO to the entry-level employee works together.

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March 12th, 2009
02:40 AM GMT
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TOKYO, Japan - "Hey, that's not so bad!" That's what news bulletins reported across Japan this morning as Japan's government released its fourth quarter gross domestic product (GDP) figures. The economy still shrank at the worst rate since the 1970s oil crisis - but again, not at the rate initially estimated. When "not so bad" sounds like good news, you know times are tough.

But this is one report, and one that will surely be followed up with another next week, maybe showing more gloom than silver lining.

As far as today's report, Japan's cabinet office says the annualized GDP shrank 12.1 percent versus the initial 12.7 percent estimate. Quarter to quarter, the economy shrank 3.2 percent, a little better than the expected 3.3 percent.

Japan's export-driven economy has been particularly hard hit in the global economic slowdown, as consumers in the United States and Europe lose their taste for Japan's cars and electronics. Companies such as Toyota and Sony have dramatically slashed production, trying to bring inventories in line with demand. That inventory build, according to economist John Vail of Nikko Asset Management, is one reason the GDP revision is a little better than initially estimated, and that the next quarter may show a deeper contraction when the inventory build falls.

"I wouldn't get too excited about the difference between 12 (percent) or 13 percent," says Vail, who points out GDP numbers are highly subject to revision. "Right now we're in a unique situation: falling demand and destocking. It's a double whammy. As soon as destocking is over, we'll have some stabilization or improvement in production in manufactured goods. We're probably in the period of maximum decline and things will improve going forward once the destocking is completed."

Bottom line: don't get too worried about every single report. Economists urge you to look at the bigger picture, which currently in Japan shows a mixed bag of possible recovery or deepening recession, depending on how world leaders move forward with stimulus packages and reform. This global crisis isn't as simple as one cause, one quick fix or one single GDP report.

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Filed under: AsiaBusinessFinancial marketsJapan


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