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Can the Japanese government afford to let Toshiba, which fell into a negative net worth of Y620 billion at the end of March due to losses in the U.S. nuclear power business, go under?

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let it die, be it a lesson to others, but of course neo-liberal economist running the world today will convince everyone it's "too big too fail", they won't let it happen

2 ( +2 / -0 )

Yes.

2 ( +2 / -0 )

Affirmative. The last of the ZOMBIES. Just about all the other 150 or so Japanese MNCs have reorganized. TOSHIBA is connected to MITSUI - don't see them lifting a finger...

2 ( +2 / -0 )

Ummm, that's why you have bankruptcy law,,, let the company either be liquidated (unlikely) or restructured in bankruptcy court...

2 ( +2 / -0 )

The Japanese government has accumulated more than a quaddrillion yen worth of public debt already. It needs to sell off "assets" (in reality, many are more likely liabilities) to help reduce this public debt. The government also needs to rein in public spending to stop public debts from continuing to grow.

Not bail out a failed company like Toshiba.

The worst that can happen for the Japanese government if Toshiba is wound down is that the valuable parts will be sold off, and the economic resources that are released from Toshiba will become available for utilization in viable businesses instead, which in time would boost tax revenues. Toshiba going out of business would therefore be a blessing for the Japanese government and the country as a whole.

The key is to think medium to long term. Not short term. Japanese government and productive Toshiba employees alike. Things will be great.

To facilitate the natural creation of new businesses to take the place of the Toshiba's, the government should focus on structural reforms. Not indebting us all even further.

0 ( +0 / -0 )

I haven't been following this that closely, but if other divisions of Toshiba are either in the black or not badly underperforming, it's socially and economically unwise to let the whole company fail. If possible, decouple what remains viable from the nuclear power division.

0 ( +0 / -0 )

Toshiba's Crown Jewels are to be sold off by Toshiba, as it stands, and the viable piece of it is in demand.

The issue seems to be whether something called 'Toshiba' is going to continue to exist at the end of it all, when only the junk is left.

The socially and economically wise outcome there is to let nature take its course, but this is Japan where protectionism is rife and tax payers may find themselves all on the hook to 'protect the lives' of yet another Japanese vested interest group.

The Japanese government will never be saving my source of income, and I wouldn't expect it anyway. Adults can and should take care of themselves.

0 ( +0 / -0 )

One has to laugh at the inference in the quote that Toshiba's losses are due entirely to its involvement in the US nuclear power business when, in fact, the corporate management had been cooking the books and lying through their teeth about it for years. From 2008, apparently. The 2015 accounting scandal, when it was finally revealed, was the biggest ever in Japan:

"Investigators describe how Toshiba's corporate leadership handed down strict profit targets, known as Challenges, to business unit presidents, often with the implication that failure would not be accepted. In some cases, quarterly Challenges were handed down near the end of the quarter when there was no time left to materially affect unit performance. It soon became clear within individual business units that the only way to achieve these Challenges was to do so through the use of irregular accounting techniques.

The investigative panel concluded that Toshiba's corporate culture, which demanded obedience to superiors, was an important factor enabling the emergence of fraudulent accounting practices. The culture operated on the level of business unit presidents and on every level of authority down the chain to the accountants who ultimately employed the accounting techniques."

http://www.investopedia.com/articles/investing/081315/toshibas-accounting-scandal-how-it-happened.asp

0 ( +1 / -1 )

The issue seems to be whether something called 'Toshiba' is going to continue to exist at the end of it all, when only the junk is left.

Toshiba's real strength is within their industrial electric components, compressors technology and radar technology.

Although they make very little profit, they are heavily related in providing military equipments. From this point I do not think the government will leave them to the wolves to be completely dismantled through bankruptcy.

0 ( +0 / -0 )

"Can"? Must. It took its chances on the market and failed. The risks were not worth it. This is capitalism, this is democracy. Unable to stand competent and competitive on the market, Toshiba is going out of business now. Other prominent companies are still in the business. If the Japanese government, presumable democracy government, does not "play" according to the rules and values of democracy and free market, "can" it be called a democratic one? Trying to pull from under a failed company that has to be reformed from the top - what is the point? In case Japanese government does find this crap about great democratic values sound, it WILL play according to the rules and let the company leave the market. Otherwise, well, shame on them.

0 ( +0 / -0 )

@Naumov Danila

There are numerous companies around the democratic world that the government saved private companies from going bankrupt. Renault, GM, Airbus,etc.etc.

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Exactly my point. Not even governments around the globe pretend that this "democratic and liberal values" farce is worth anything.

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It would be ideal if they could strip away the layers of corrupt management, and let the remaining 20,000 or so workers carry on in their jobs under new direction; as there is not much of a support network available for these people. With little to no income, the towns and villages where Toshiba workers are concentrated would just die off, along with all of the associated businesses. It's not just about the company, it's about whole communities.

0 ( +0 / -0 )

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