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Problems at Toyota, JAL taint Japan Inc's image

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Still the public savings pot is filled with staggering 1.463 Trillion Yen

You mean staggering in a bad way? If my mathematics serves me correctly - thats only about Ichi-Man (10000 Yen) for every man, woman and child in savings. If that were the case the situation would be terrible.

125,000,000 people X 10000 Yen = 1250000000000 Yen or 1.265 Trillion Yen

I would guess it is closer to 1.463 Trillion Dollars, not Yen.

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'image tainted'??? give me a break - these people are human are'nt they?? all humans make mistakes and errors at some point

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Welcome to the global economy! I'm not an economist, but isn't this simply a case of the rest of the world becoming more and more competitive every year, every decade, and the Japanese companies who are failing now have just become "bubbly" and complacent? Or that Japan and the US have hit plateaus but the likes of China, India, and Korea are on the rise?

The economic downturn and quality recalls are just a part of reality, and are not as threatening to Japan Inc. as the global competition is.

Same goes for EVERY OTHER COUNTRY though, including the US, UK, and even China and Korea someday in the future. Yes, I believe even China, the fastest growing economy will eventually have another country coming up to overtake them. No one stays no. 1 or 2 forever, it's a cycle and it will always change... maybe not in our lifetime, but it will change (for example, the Industrial Revolution started in Great Britain did it not? But now the US is the world's biggest economy).

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Gees! Why are they only picking on Toyota and JAL? What about Sony batteries, Toshiba and Mitsubishi trucks? Just to name a few.

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Since this is not addressed in the article or any of those I've read elsewhere, how do we not know that rather than this being a systemic Toyota problem that this isn't a problem of giving too much autonomy to NA and European divisions? I don't believe this accelerator problem has occurred in Japan.

The fact of the matter is that the vehicles produced abroad by the Big Three Japanese companies are still heads and shoulders above the domestic product (particularly here in NA). But the vehicles produced in Japan are still better built. In fact, I worry, again here in NA, that the tail's been wagging the dog too long, and that this has hurt Toyota in particular (think big pick-up trucks and the land Cruiser and the Sequoia).

The Nissan Armada is just an abomination and the only thing the Honda pick-up truck competes with is the Cadillac Escalade. Neither company, and certainly the world, needs either.

I think it's time to exert more corporate control from Japan. Given that the auto market will only contract further, it seems a perfect opportunity to make the foreign divisions more Japanese rather than less.

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Maybe it is time for give up old Feudal way and step up little open minded social way.

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Sony cut corners in battery research, that was found out by individual research companies. That stupid mistake cost them lots of money and trouble. JAL was mismanaged, and still hasn't learned its lesson. Toyota was arrogant and tripped itself up. A very neutrally-toned article.

What went wrong with the economic giant that arose from the ashes of World War II?

Arrogance and the unwillingess to change. The Japanese are masters of complaining but never doing anything to fix the problems. Kids don't want to learn? Young people don't want to work? Products not selling? Just sit around and complain about it.

Japan needs to get up off its rear end and get to work.

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Why would Chinese companies bother with "US Patent and Trademark Office?" Doesn't China have their own system? That said, are you telling me that one of the largest countries in the world holds less patent's than Korea? Find a lot of potential for error in that post. As for Japan, people have been looking for years reasons to dump the Japanese products. America built this economy during the Vietnam war and now the US economy is in trouble. Everything is up to the US. And in this round of who's who... China is the far winner. Sorry Japan and the Japanese, you can't compete. Tax laws, Company regulations, Visa issues for foreign staff, and TAXES again, and not speaking a recognized business language, sends all the foreign talent else where. Singapore is the place to be right now in Asia. All of the above "very low" and Singapore really wants talent. They want people to come and make Singapore a better place to live. Welcoming different cultures and not demanding you change to fit in. As they respect difference. And Singapore is the spring board for China. Other countries in Asia are improving. Japan is still sticking their heads in the sand and hording the money they already have. Once that money reserve is gone, 3rd world country here they go. (or the next big one in Tokyo, which ever comes first.)

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Once Japan's collective consciousness arrives at a solution it moves with stellar speed and perfection.

The problem of Japan lies in the fact that it functions like a huge tanker where all the engineers work hard to perfection the engine and the ship is running ever faster, but no is standing at the steering.

Hence Japanese have proven track to perfection their machinery, may it be the war- or their economic machinery, but a critical review of the course taken and surface of new challenges, is replaced by a strong belief in the impeccability of the Japanese system.

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China's success will limited as long as it has a one party government.

Don't forget that in Japan the bureaucrats decide in which technology they invest the government funds. Hence there is a similar mechanism at work as in China.

Plus the Chinese government has recently shown that it focuses on the right technologies like green products. The result can be seen looking at Panasonic who went as the worlds largest solar panel maker in the 90's to less then 10% world market share; overtaken by Germany and China.

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The list of top ten patent recipients from the US Patent and Trademark Office (USPTO) includes: IBM (4,914), Samsung (3,611), Microsoft (2,906), Canon (2,206), Panasonic (1,829), Toshiba (1,696), Sony (1,680), Intel (1,537), Seiko Epson (1,330) and HP (1,273).

USA:10,630 Japan:8,741 Korea:3,611

Only top ten companies and many of the patents are really just garbage, but it proves that Japan is in the game and China is nowhere to be seen. China's success will limited as long as it has a one party government. Japan will get smaller, but creativity is alive and well.

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"Group think? They do? No, you must be kidding."

Abosolutely Japanese business environments use this methodology of consent, process and decision making. Hard top down is not that common and shining individual rogues are very rare. Collective thinking is Japan. Even if that simply means a collective set of ideas that define limitations and behavior.

This is a big part of why Japan went from medieval state to sinking the world's second most powerful fleet in less than 50 years. Why it went to war, the lost WWII. Why Japan was so successful rebuilding and becoming Japan Inc. and why it will ultimately render Japan uncompetitive without major change.

Once Japan's collective consciousness arrives at a solution it moves with stellar speed and perfection. But it is nearly impervious to short term change and that means the same power works against Japan a lot of the time due to rigidity in thinking. Japan must learn to adapt faster and with greater emphasis on hearing out the few as well as the many.

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Grossberg said a common problem at Japanese companies is “group think” that makes it hard for an individual to raise a troublesome issue. “It either falls flat and people ignore it, or it creates a problem for the individual who brings it up,” he said.

Group think? They do? No, you must be kidding.

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Agree with the sentiment of many of these posts. These corporate problems are evidence of far-reaching structural problems facing Japan as it goes onto the 2010's. In fact, I think it is probably not helpful that the recalls for Toyota are all outside of Japan. It allows the wide-spread sense of superiority/complacency to persist, since folks can simple blame a U.S. parts supplier. Unfortunately for those folks, it was not that part supplier that caused Toyota to lose money in both 2008 and 2009, and ignored this problem when it first came up in 2007 on Tundra. Unless some serious and substantial changes are made to the general mind-set here, I'm afraid that Japan's best days are way, way behind it.

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Japans biggest problem is that the very foundation its economic strength is built on, is crumbling: people who are willing to sacrifice everything for the sake of Japans economic power.

30% of the workforce are already low income temp-staff, tendency: growing. The new generation is not willing to work the long hours their parent did. A symbol for this is the growing number of new employees not willing to go for after work drinking with their bosses and the new grass eaters who indulge in very different hobbies than playing golf as their older colleagues do.

Saving rates are below 2% (from 18% in 1990). Even the secret savings Japanese housewives keep hidden from their husbands (へそくり) sank in 2009 in average by 1 Million Yen (20%). 19 Million Japanese live below the poverty line making Japan the 4th worst country under all OECD countries.

With more than 90% of Japans immense public debt held by the Japanese one can imagine how quickly the system will crumble if the public is no longer willing or able to by new Government Bonds. All the government support that is keeping zombie like industries and rural areas alive will default.

I see the later explosive problem slowly looming as the younger generation is no more willing to sacrifice their lives in the way their parents did. Still the public savings pot is filled with staggering 1.463 Trillion Yen (though slowly crumbling due to the lower saving rates). With about 900 Trillion spent by the end of 2010, the dance on the volcano can continue for some more years ... or can't it?

Thus the recent image problems Japanese companies face are not the pressing ones.

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While I lament over stifled Japanese creativity and quality issues, I must admit I'm enjoying my Panasonic plasma tv (which is much better quality than anything Samsung or LG put out), driving a Honda that hasn't had one glitch in 10 years on the road (compared to my friend's VW which has gone in for repairs 3 times in 5 years), and take spectacular photos and videos of my son with my Canon DSLR and video camera, which I looking at on a Mitsubishi monitor and print on Fujifilm paper.

Despite the terrible education system and inefficient corporate management in Japan, they must be doing something right... Imagine what they could develop if they were given free reign to design whatever they liked.

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Wasn't the Peugot recall done because that particular model was made by Toyota under a Peugot name, the same as the Pontiac Aztek???

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Also Ford trucks are having the same problems though not as dramatic.

So does Peugeot. Their recall has been announced yesterday.

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I'd like to know what media that is because everything I'm reading indicates the part was flawed in design (shape and material). Check Asahi and Yomiuri. Further it seems Toyota was aware of the problem much earlier than they have indicated.

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According to the media some firm making the petrol pedal was in the wrong (this is sort of normal of an outside plant making the parts that are installed in said make of cars/trucks)& this is to be corrected. Also Ford trucks are having the same problems though not as dramatic.

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As they say the market always corrects itself. Well for toyota and others, thats what you get for giving 2x or 3x your salary as a bonus twice a year. CUT COSTS--not quality! JAL with its ridiculous prices. I cant believe people even flew that airline. I guess it was kept afloat by all the debt that was going to their employees to work overtime pickn their bums.. Anyway, it is a good lesson for them. And prices will finally come down on overpriced products. BTW..has anyone been able to find Samsung TV's in Japan?

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"All of these comments are overblown."

JAL is just a symptom of a much greater problem. A problem that is understated rather than overblown.

Japan has been slipping for some time now. This should be obvious to any serious observer of Asia. As an exporter the cost to produce goods in Japan are making Korea and China more powerful exporters. And Japan's inability to shift to other areas has given countries like India an edge up facilititated by their legions of well educated, English speaking technical and information workers.

Japan has missed the boat by being far too self centered and failing to see the coming shifts in the global economy. Added to the list of reasons in my post above, you have a very real problem. Hardly overblown.

Is it game over for Japan? No. But rejoining the competition means dramatic changes are ahead for Japan. And to make those changes, the barrier infested mindset of government and industry here must be changed or forcefully broken down by more inspired leaders on both politial and economic sides.

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I think another problem that lead to this situation is that the a great many Japanese have become complacent. They expected the economic advantage to stay with them forever. And this complacency has led them to making a great many mistakes, primarily forgetting that other companies (i.e. foreign companies) won't stand idly by and watch their market share evaporate endlessly.

Also I think the current generation of engineers and builders aren't the same driven bunch we found after the end of WW2 who needed to rebuild their country. They didn't have anything to prove anymore and their become susceptible to making more mistakes then their predecessors.

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Korea is surpassing Japan in the field of cars and electronics. American companies are reborn, and kicking butt, Apple, for example. Japan has no such companies in the pipeline. American lawyers will bankrupt Toyota over the deaths and coverup.

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All of these comments are overblown. Most airlines in Europe and America have either been bought out, closed down, or given government support. The business model itself is mostly to blame. JAL is like many of the European national airlines that has never been able to compete, it's not unique.

Toyota will have trouble, but it's quality is generally the best given the price. A new Toyota still costs half a new BMW and lasts just as long with lower maintenance costs. Toyota's market share in the US is 15% and in California 30%... impressive numbers.

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“It either falls flat and people ignore it, or it creates a problem for the individual who brings it up,” he said.

Bully culture biting Japanese in the ass.

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2 posts above are spot on.

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If you work in Japan you can see the problems that are making Japan slide.

First of all nearly every business I have encountered in Japan is inefficient and bureaucratic to the point of near inability to move. Creativity is crushed out of new hires in favor of making them fit in, so new ideas and fresh points of view are unwelcome and frequently eliminated before they can benefit the company.

People are overworked and tired to the point of dropping dead. This hardly leaves room for creativity of the kind of "out of the box" thinking that Japan severely needs to move forward.

In the rebuilding years, the strict ladder of control helped by allowing inpsired leaders to press their agenda and get things done. Now it serves to retain the stodgy ranks of senior who are hell bent upon retaining the status quo and ignoring change.

Finally. The education system here is not creating the kind of revolutionary thinkers that are required to raise Japan above the competition. Sure there are some, but we should be seeing more small businesses with inspired leaders rising out to take the lead in some areas of business. But we don't. Why? Because A. there are very few of them out there. and B. Even if there are some out there, the internal barriers of partnership, corruption and the fine art of obstruction keep many from gaining the foot hold they need to prosper.

Japan's decline is largely self inflicted by an increasingly conservative, selfimportant, barrier infested, inefficient and largely inept leadership in far too many industries.

The only way this will change is if new ideas are encouraged and nurtured and the old barriers brought down to open the way for new, small businesses and the out of the box ideas they can bring to the table.

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It's been happening over years. Japan for the last 15 years has been cheating their customers in the world. The quality hasn't been there. All the long hours people put in their offices sitting around doing nothing, are now being shown in the world. All talk and no show. Just look around Tokyo.... 100 yen stores everywhere. People can't afford to buy quality in Japan, so why should they produce quality for overseas. Just a few months ago Japanese were so smug about GM having troubles, how things have changed. Delta will probably get JAL renaming it DJAL *sounds French, and Toyota will never recover in the US. The lawsuits filings are going to keep them busy for years and years. And when they go to ask for help, no one is going to rescue them. Been saying it for years, the power in Asia is China. At least they charge a fair price for their products.

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“Toyota expanded too rapidly, and that’s always a risk,” Has nothing to do with quality control. I'd say poor management = lack of quality.

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