Hard work pays (albeit doom and gloom)

19 01 2010

THE JAPANESE WORK ethics were once legendary and much envied upon, particularly when the Land of the Rising Sun rose to become an economic powerhouse in the world within only a few decades since the 2nd World War ended.

The amazing economic miracle was pretty significant given that Japan was in almost total ruins at the end of the war in 1946. The atomic bombs which devastated both the capital Tokyo and the industrial city of Hiroshima then, coupled with the fact that the Japanese had no natural resources to depend on for its survival made it all the more remarkable an achievement. Much research and lots of studies had been done on what successful attributes had made Japan what it was many years ago.

Now, yet more researches and studies need to be done by economics experts on what had gone wrong in the Japanese economic success story which is facing an about-turn in recent times. The latest corporate failure to make global headlines is its national flag-carrier, the Japan Airlines (JAL) which has been declared bankrupt today! 😦

JAL declares itself bankrupt as Board resigns
By Doug Newhouse, 19 January 2010

As has been widely expected, Japan Airlines (JAL) today declared itself bankrupt, with all Board Members resigning and the Tokyo Stock Exchange announcing that the carrier will be delisted from the stock market on February 20, in what is one of the country’s biggest corporate failures in history.

More happily, the airline is to continue operating its services normally ahead of a government cash injection of $3.3bn as part of an ambitious restructuring programme under the supervision of the state-backed Enterprise Turnaround Initiative Corporation (ETIC).

As already reported, Kazuo Inamori has been appointed as the new Ceo at JAL. The 77-year-old honourary Chairman of Kyocera Electronics has agreed to head up the company after Haruka Nishimatsu made it known that he will resign as part of the restructuring.

JAL now has $16bn-worth of debts and has announced plans to cut a further 13,000 jobs and close up to 24 unprofitable domestic and international routes. The Japanese Government is continuing to support the airline’s cash flow in the interim period before the reorganisation, although its international and domestic routes are likely to be reduced significantly in the future. Not surprisingly, JAL’s share price has fallen through the floor, with its current value set out at no more than around $208m. Kazuo Inamori is said to be very experienced in rescuing debt-laden companies, although it is arguable whether he won’t mind some divine intervention in the short term [he is also an ordained Buddhist priest-Ed] .

JAL’s inflight duty free sales programme has hovered up and down around the $60m to $80m levels during the last three years and the airline also works in a separate joint venture boutique operation with the Narita Airport Authority (NAA), and DFS Group at Tokyo Narita International Airport.

COMMENT: How times change? In the past it would have been unthinkable for the Japanese Government to have allowed its national airline to go bankrupt in full view of the world. But this move says as much about the way that Japan is changing as it does about corporate vulnerability.

As some analysts have already remarked, no company is too big to go bankrupt anymore and most governments are simply unwilling, or unable (or both) to bail out national icons when they get into trouble.

The Japanese economy may well be doom and gloom these days but the never-say-die spirits of the ‘Nihon-jin’ will prove to be a critical success factor soon enough. I’ve seen first-hand how hardworking and disciplined the large majority of the Japanese population can be.

All the good people of Japan have to do is to re-adopt the cheerful slogan of “BANZAI!” (denoting a common term of congratulations in Japanese) and to do away with useless bottoms-up cheers of “KAMPAI”! (As in demoralizing booze-drunken culture…) πŸ˜‰

Being an extremist in foolish thoughts, it did cross my mind to think out loud now that our national carrier, Royal Brunei Airlines (RBA) is damn lucky to have the full backing and financial support of His Majesty’s Government to be kept afloat all these years in spite of downward slides in Returns on Investments (ROI). Would buying over JAL and a next to impossible merger with RBA be the most ludicrous idea of the ‘Deal of the Century’? ROFL πŸ˜€ {Just food for the Brunei Investment Agency (BIA) thought… πŸ˜›}





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