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Japan's Flag-Carrier Faces Turbulence Within and Without, and Other Business News


Japan Airlines is finding itself buffeted from both internal dissension and an external multinational investigation. The concern over American meat continues in Japan's parliament, with no immediate lifting foreseen of the reimposed ban on U.S. beef. These and other stories in this week's look at Japanese business news.

Japan Airlines Woes

Japan Airlines, which has had a bumpy time lately due to a series of safety blunders, is now running into turbulence internally.

Four group directors are calling for top executives, including President Toshiyuki Shinmachi, to quit because of the airline's poor financial performance. Shinmachi says he has no intention of leaving his post.

Shinmachi calls it highly regrettable that the directors want to oust him, and says his fate will be his decision alone. The airline president also says, rather than focus on whether or not to resign, his main responsibility is to reconstruct safety at JAL and to implement new management plans.

Shinmachi is also finding himself dealing with the carrier's alleged involvement in a cargo price-fixing cartel. JAL says it will fully cooperate with a multinational investigation by U.S. and European authorities.

According to news reports, the probe is also targeting such airlines as Air France, British Airways, Cathay Pacific, KLM and Lufthansa.

American Beef Imports

Japanese officials say they still want some more answers from the United States before reopening the market to American beef.

Prime Minister Junichiro Koizumi, facing questioning in parliament, said the U.S. government needs to understand how sensitive the Japanese people are about food safety.

The prime minister says Americans are eating beef without concern about mad cow disease, but Japanese want stricter standards to ensure the meat they consume is free of the risk of bovine spongiform encephalopathy.

Japan, which had briefly reopened its market to U.S. beef, suspended imports again last month after finding a veal shipment containing backbone, a part of the cow that is thought to carry the substance that causes mad cow disease.

Cell Phone Joint Venture

Two competitors in the cell phone industry are coming together.

Japan's Sanyo Electric and Finland's Nokia have announced they will combine some of their operations into a joint venture, with major facilities in San Diego, California; and two Japanese cities, Osaka and Tottori.

The combined operation will supply about one-fifth of the world market for phones using CDMA (Code Division Multiple Access) technology. The Sanyo-Nokia combination is seen as a strategy to take on the current industry leader, Samsung of South Korea.

Sony Television

Sony has had another expensive mishap. The Japanese electronics giant says service personnel will have to be dispatched to the homes of many of those who have bought its Bravia brand liquid crystal display and rear projection televisions.

Sony says that, due to a software glitch, owners of the televisions may find they cannot switch them off, or get them to come out of stand-by mode, after about 1,200 hours of use.

Sony says some 400,000 of the faulty TVs have been sold in Japan, the United States, South America, China and other Asian countries.

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