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Japanese Airlines Looking for Government Help - 2001-09-28

Japanese airlines are seeking financial help from the government, while leading electronics companies are trying a new strategy to combat poor computer hardware sales.

Japan's airlines are asking for government assistance, following the September 11 terrorist attacks on the United States in which passenger jets were hijacked and used as large bombs. An association of 12 Japanese carriers met with the director of the nation's Civil Aviation Bureau Tuesday to seek financial support for the troubled industry.

Japanese airlines, like their counterparts in Asia, Europe and the United States, have been hard hit by an industry-wide crisis. Insurance premiums are soaring, and many passengers are canceling trips. Washington has already approved a $15 billion package for U.S. based carriers. Governments in Europe, Hong Kong, South Korea, and Singapore have also offered plans to help local airlines.

Japan's auto industry could see an immediate downturn in U.S. sales as a result of declining consumer confidence. Analysts forecast Toyota, Nissan, and Honda will experience a drop in sales of as much as 30 percent as Americans hold off from making major purchases.

Stephen Usher is an auto analyst at J.P. Morgan Securities in Tokyo. He says that Japanese cars will still outsell other vehicles since they are more fuel efficient and have better resale value. "We have expected a sharp contraction of U.S. light vehicle sales following the events of September 11," Mr. Usher says. "The fact of the matter is that we expect Japanese [car makers] to continue to take increase market share. While the overall industry demand should be down quite sharply in September, we expect the relative performance of the Japanese cars to be a little bit better than their American counterparts."

Japan's leading electronic companies are experimenting with a new strategy to cope with a stalling global economy. They are stressing software over hardware as sales of items such as semiconductors continue to languish. Hitachi, NEC, and Fujitsu all say they are hiring thousands of engineers to create new software. NEC says it plans to team up with software makers in China and elsewhere.