This is the new strategy of Panasonic, which is trying to recover from its largest-ever loss last year by closing two of its three plasma display factories in Amagasaki, a port city next to Osaka. Now, Panasonic says it will outsource a large chunk of its flat-panel production to lower-cost companies elsewhere in Asia, while focusing its own production lines on more profitable products like factory equipment and batteries for electric cars.
“One lesson we learned is we should not try to make every kind of product ourselves,” said Atushi Hinoki, a spokesman for Panasonic. “But there are still many things we make well.”
Indeed, many economists and officials say that while a continued shrinking of its industrial base is inevitable, Japan would be foolish to relinquish manufacturing to the extent the US already has. A focus on exports has allowed this resource-poor nation to enjoy the huge trade surpluses, at least until last year, that pay for its imports of energy and food. They say that Japan’s surpluses have also given it the luxury of financing its own huge budget deficits.
“Manufacturing is the foundation on which finance and other service industries stand,” said Keiichi Konaga, who formulated Japanese industrial policy in the mid-1980s as the top bureaucrat in METI’s precursor. “Even the United States is now waking up to this. That’s why it bailed out General Motors.”