A senior Japanese politician hinted yesterday that a government bailout was not on the cards for the nation’s struggling electronics giants, after embattled Sharp cast doubt on its own survival.
Japanese Economy Minister Seiji Maehara said the likes of Panasonic and Sharp, on track to book combined annual losses of more than US$15 billion, should not expect the kind of taxpayer-funded rescue handed to once-bankrupt Japan Airlines or Tokyo Electric Power Co (TEPCO), operator of the crippled Fukushima Dai-ichi nuclear plant.
“In this society of capitalism, I believe companies in general should rebuild themselves through their own efforts,” Maehara told a press briefing in Tokyo.
US President Barack Obama came under fire in some quarters over his administration’s bailout of the US auto industry, but the issue is a sensitive one in Japan, where there is a general reluctance to let failing companies go under.
Japan’s electronics industry has suffered from a long list of problems, including a high yen, slowing demand in key export markets, fierce overseas competition and strategic mistakes, which have left the industry’s finances in ruins.
Neither Sharp nor key rivals Panasonic and Sony have sought bankruptcy protection as they undergo massive corporate restructurings.
However, Sharp, which makes Aquos-brand electronics, recently warned of a US$5.6 billion annual loss, its credit rating has been reduced to junk, and the firm itself has raised questions over its viability.
Yesterday, Maehara said that Japan Airlines (JAL), which went bankrupt in one of Japan’s worst-ever corporate failures, was the nation’s flagship carrier and letting it fail would have left rival All Nippon Airways as the overwhelmingly dominant carrier in the domestic market.
Now-profitable JAL went through a court-supervised restructuring and has re-listed its shares on the Tokyo Stock Exchange.
TEPCO will receive billions of dollars in public money amid huge bills stemming from last year’s tsunami-sparked reactor meltdowns at Fukushima Dai-ichi, the world’s worst atomic crisis in a generation.