Toshiba’s restructuring ended with delisting reflects the difficulties of Japan’s manufacturing industry
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Japan’s Toshiba Corporation announced its delisting plan last week, and Toshiba’s restructuring process is finally coming to an end. This protracted crisis reflects the many challenges that the Japanese manufacturing industry, represented by Toshiba, has encountered in recent years in terms of corporate governance, risk management, innovation and change. The difficulties faced by Toshiba may be over for now, but the challenges faced by Japan’s manufacturing industry may not be over yet.
In 2015, Toshiba was exposed to have committed financial fraud by inflating profits and concealing losses, leading to serious consequences such as a sharp drop in stock prices, shrinking market value, and damage to credibility. Since then, Toshiba has suffered setbacks in its nuclear power and semiconductor businesses. Multiple crises have made it difficult for Toshiba to escape from a state of chaotic management and operational difficulties. Over the past eight years, many mergers and acquisitions and restructuring plans have been reported, but all of them failed.
In August this year, a consortium led by Japan’s domestic fund “Japan Industrial Partners” (JIP) officially launched a tender offer for Toshiba totaling approximately 2 trillion yen (approximately 149 yen per U.S. dollar). The JIP consortium raised funds from ordinary shareholders Acquired the remaining shares and acquired Toshiba as a wholly-owned subsidiary. On November 22, Toshiba held an extraordinary general meeting of shareholders, passed the company’s privatization proposal, and announced that it would delist from the Tokyo Stock Exchange on December 20, ending its 74-year history as a listed company.
Some analysts pointed out that Japan’s domestic view of Toshiba’s restructuring is relatively positive, believing that it can “avoid subsequent impacts from stock market and capital fluctuations.” However, as a representative company in Japan’s manufacturing industry, Toshiba’s current situation may not be explained simply by financial fraud scandals or investment decision-making errors. As time goes by, the competitiveness of Japan’s manufacturing industry has declined very obviously, and Toshiba’s restructuring is just the epitome and footnote of this process.
From an external perspective, with the increasingly fierce competition in the global market, the rise of multinational manufacturing industries, and the rapid upgrading of technology, Japanese manufacturing companies are unable to effectively respond to competition and adapt to market changes, resulting in declining performance and intensified losses. Market share is gradually eroded. In the steel, The advantages in fields such as home appliances, new energy, and communications are no longer significant, and have even been gradually surpassed. At the same time, the global economic environment is facing challenges, including factors such as trade protectionism, geopolitical tensions, and market demand fluctuations, which have increased the operating risks of Japanese manufacturing companies, making it difficult to predict and respond to market changes. In addition, the United States has vigorously promoted the reshoring of manufacturing in recent years, which has had a great impact on Japan.
From an internal perspective, issues such as management, innovation and cost structure constrain competitiveness. Some analysts pointed out that some Japanese manufacturing companies have low decision-making efficiency and frequent changes in senior management personnel, resulting in companies lacking stability and coherence in executing strategies and responding to market changes; it is difficult to keep up with rapidly developing technological trends in terms of technology and product innovation. , or the inability to launch competitive new products in a timely manner; high labor costs, raw material costs and production costs also weaken its market competitiveness.
On November 15, the Japanese Cabinet Office released preliminary statistical results showing that Japan’s actual gross domestic product (GDP) fell by 0.5% month-on-month in the third quarter of this year, and the annual rate of decline was 2.1%, significantly exceeding market expectations. This is also the first time this year that the Japanese economy has experienced quarterly negative growth. Some analysts pointed out that the Japanese economy’s GDP growth turned negative in the third quarter, which reflects the difficulty of converting profits of Japanese companies into actual investment and the lack of endogenous power in the economy.
Judging from the latest financial reports released recently, on the one hand, the overall operating income and profits of Japanese companies have remained stable, with some growth; on the other hand, in industries that reflect technological innovation, such as semiconductors, electronics, and new energy vehicles, Japanese companies The competitiveness is obviously insufficient, and the performance has declined significantly, especially in overseas markets, sales and profits have declined. This duality is a reflection of the current Japanese manufacturing industry: it is unable to get rid of its reliance on past achievements, and it is difficult to take the initiative in future competition. As the economic environment at home and abroad is difficult to improve quickly and market competition continues to intensify, there is not enough time and space left for Japan’s manufacturing industry to quickly improve its competitiveness.
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