Identifier
Created
Classification
Origin
09TOKYO346
2009-02-13 10:03:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tokyo
Cable title:
PANASONIC CONFIRMS PLANS TO REPATRIATE STAFF
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UNCLAS SECTION 01 OF 02 TOKYO 000346
SENSITIVE
SIPDIS
DEPT FOR G/AIAG, EEB, AND EAP/J
HHS FOR OGHA
E.O. 12958: N/A
TAGS: ETRD EINV KFLU TBIO KSTH JA
SUBJECT: PANASONIC CONFIRMS PLANS TO REPATRIATE STAFF
FAMILIES, BUT SEES NO IMMINENT PANDEMIC THREAT
REF: PATTERSON-WOLF EMAILS
TOKYO 00000346 001.2 OF 002
Sensitive But Unclassified. Contains Proprietary Information.
UNCLAS SECTION 01 OF 02 TOKYO 000346
SENSITIVE
SIPDIS
DEPT FOR G/AIAG, EEB, AND EAP/J
HHS FOR OGHA
E.O. 12958: N/A
TAGS: ETRD EINV KFLU TBIO KSTH JA
SUBJECT: PANASONIC CONFIRMS PLANS TO REPATRIATE STAFF
FAMILIES, BUT SEES NO IMMINENT PANDEMIC THREAT
REF: PATTERSON-WOLF EMAILS
TOKYO 00000346 001.2 OF 002
Sensitive But Unclassified. Contains Proprietary Information.
1. (SBU) Summary: Panasonic says pandemic preparedness and
risk management are behind its decision to repatriate
dependents of employees working in many emerging countries.
However, the company concedes there is no imminent pandemic
threat. With no particular guidance from the GOJ or other
authorities to repatriate citizens, some speculate
Panasonic's decision is driven by business concerns.
Panasonic faces significant pressure to restructure and cut
costs in the midst of a major electronics industry downturn
and the ongoing acquisition of rival Sanyo. End Summary.
2. (SBU) In conversations with Emboffs, representatives
from electronics giant Panasonic's Osaka headquarters
confirmed recent media reports the company plans to
repatriate dependents of Japanese employees working in
several emerging countries as part of the company's pandemic
action plan. While they have made no official announcement
Panasonic reps outlined the company's plans in an interview
to local media published February 9.
3. (SBU) Panasonic officials we spoke with conceded they
have no specific information on any immediate pandemic
threat, and that this decision was not made in reaction to
such a threat. They maintained, however, the company wants
to manage its risk profile and sees the repatriation of
families as lowering risk and consistent with the company's
internal pandemic action plan. Contrary to one press report,
company officials said the decision was made independently
without consultation with industry groups or the GOJ. Post
also contacted the Ministry of Economy, Trade, and Industry
(METI) and the Japan Electronics IT Industry Association
(JEITA) and they have no information about pandemic or other
health threats and have not made any public statements on the
subject. Foreign Ministry consular officials had no comment
on Panasonic's actions, but said the GOJ has not encouraged
any evacuation or repatriation of Japanese citizens overseas.
Ministry of Health, Labor, and Welfare (MHLW) officials said
neither Panasonic nor other companies have approached them
for pandemic preparedness guidance.
4. (SBU) Panasonic reps downplayed media speculation the
company's decision is a cover for cost-cutting measures. One
rep asserted sending family members home to live separately
is more expensive for the company than if they reside
overseas with a Panasonic employee. A contact who has
studied pandemic preparedness efforts by Japanese industry
said several smaller Japanese companies have brought home
overseas dependents for what were reportedly pandemic
planning reasons. He noted a recent push by Japanese
industry to incorporate better risk management practices may
be affecting decisions regarding overseas operations, but
acknowledged it is difficult to separate risk management from
more general business decisions. He added Panasonic's size
and influence could prompt other large firms to consider
similar actions.
5. (SBU) In separate conversations, industry analysts have
told us Japan's electronics industry is burdened by
over-capacity and badly needs to consolidate. Panasonic's
December 2008 announcement it would acquire Sanyo Electric
represented a step in this direction. Japan's Nikkei
newspaper noted Panasonic's restructuring charges were the
largest in the industry and it reported Panasonic will close
20 percent of its factories in order to cut costs roughly 1
billion dollars per year.
6. (U) The Panasonic Group announced its JFY 3rd quarter
financial results February 4 against a backdrop of an
industry in turmoil. Panasonic's consolidated sales were
down 20 percent and the company reported net losses of
roughly 650 million dollars for the quarter. Panasonic is
now projecting a loss for the fiscal year in excess of 4
billion dollars. The Group also reported restructuring
expenses of 3.8 billion dollars due to integration or closure
TOKYO 00000346 002.2 OF 002
of operating sites, losses on fixed assets, and expenses from
employment structural reforms.
ZUMWALT
SENSITIVE
SIPDIS
DEPT FOR G/AIAG, EEB, AND EAP/J
HHS FOR OGHA
E.O. 12958: N/A
TAGS: ETRD EINV KFLU TBIO KSTH JA
SUBJECT: PANASONIC CONFIRMS PLANS TO REPATRIATE STAFF
FAMILIES, BUT SEES NO IMMINENT PANDEMIC THREAT
REF: PATTERSON-WOLF EMAILS
TOKYO 00000346 001.2 OF 002
Sensitive But Unclassified. Contains Proprietary Information.
1. (SBU) Summary: Panasonic says pandemic preparedness and
risk management are behind its decision to repatriate
dependents of employees working in many emerging countries.
However, the company concedes there is no imminent pandemic
threat. With no particular guidance from the GOJ or other
authorities to repatriate citizens, some speculate
Panasonic's decision is driven by business concerns.
Panasonic faces significant pressure to restructure and cut
costs in the midst of a major electronics industry downturn
and the ongoing acquisition of rival Sanyo. End Summary.
2. (SBU) In conversations with Emboffs, representatives
from electronics giant Panasonic's Osaka headquarters
confirmed recent media reports the company plans to
repatriate dependents of Japanese employees working in
several emerging countries as part of the company's pandemic
action plan. While they have made no official announcement
Panasonic reps outlined the company's plans in an interview
to local media published February 9.
3. (SBU) Panasonic officials we spoke with conceded they
have no specific information on any immediate pandemic
threat, and that this decision was not made in reaction to
such a threat. They maintained, however, the company wants
to manage its risk profile and sees the repatriation of
families as lowering risk and consistent with the company's
internal pandemic action plan. Contrary to one press report,
company officials said the decision was made independently
without consultation with industry groups or the GOJ. Post
also contacted the Ministry of Economy, Trade, and Industry
(METI) and the Japan Electronics IT Industry Association
(JEITA) and they have no information about pandemic or other
health threats and have not made any public statements on the
subject. Foreign Ministry consular officials had no comment
on Panasonic's actions, but said the GOJ has not encouraged
any evacuation or repatriation of Japanese citizens overseas.
Ministry of Health, Labor, and Welfare (MHLW) officials said
neither Panasonic nor other companies have approached them
for pandemic preparedness guidance.
4. (SBU) Panasonic reps downplayed media speculation the
company's decision is a cover for cost-cutting measures. One
rep asserted sending family members home to live separately
is more expensive for the company than if they reside
overseas with a Panasonic employee. A contact who has
studied pandemic preparedness efforts by Japanese industry
said several smaller Japanese companies have brought home
overseas dependents for what were reportedly pandemic
planning reasons. He noted a recent push by Japanese
industry to incorporate better risk management practices may
be affecting decisions regarding overseas operations, but
acknowledged it is difficult to separate risk management from
more general business decisions. He added Panasonic's size
and influence could prompt other large firms to consider
similar actions.
5. (SBU) In separate conversations, industry analysts have
told us Japan's electronics industry is burdened by
over-capacity and badly needs to consolidate. Panasonic's
December 2008 announcement it would acquire Sanyo Electric
represented a step in this direction. Japan's Nikkei
newspaper noted Panasonic's restructuring charges were the
largest in the industry and it reported Panasonic will close
20 percent of its factories in order to cut costs roughly 1
billion dollars per year.
6. (U) The Panasonic Group announced its JFY 3rd quarter
financial results February 4 against a backdrop of an
industry in turmoil. Panasonic's consolidated sales were
down 20 percent and the company reported net losses of
roughly 650 million dollars for the quarter. Panasonic is
now projecting a loss for the fiscal year in excess of 4
billion dollars. The Group also reported restructuring
expenses of 3.8 billion dollars due to integration or closure
TOKYO 00000346 002.2 OF 002
of operating sites, losses on fixed assets, and expenses from
employment structural reforms.
ZUMWALT