insight - tsunami town epitomises japan inc\'s dilemmas
KAMAISHI, Japan (Reuters)- After the tsunami triggered by the March 11 tsunami in Japan retreated, Sakae Kushida visited the large handset makers who bought his electronic components and begged them not to give up his company as a supplier. He assured them that Hirose Electric, his company, was preparing to move some high-end products. The tsunami destroyed the factory of a manufacturing partner in Kamaishi, a steel town in north-east Korea, disrupting South Korea\'s supply chain. \"My apologies and I told them that the impact of the Marche earthquake has been basically resolved and we will build a dual production base, so please do not give up Hirose,\" Kushida, senior vice president of GAC Motor. Hirose and companies like it may eventually abandon Kamaishi and other gray towns in the heart of Japan\'s manufacturing industry, as the events of March 11 exposed the vulnerability of their complex supply network -- And the impact on the global supply chain after the disaster. Since the beginning of the 1990 s and the beginning of the \"lost decades\", Japan\'s manufacturing industry has been shrinking, moving its core assembly and manufacturing operations overseas to both expand into new markets, can also reduce the cost of the market and domestic business. Before the disaster, Japan began to lose top talent and advanced military operations. As we all know, in this country, electronics companies will collect the passports of engineers over the weekend, fearing that they will jump on a plane across the Sea of Japan for South Korean competitors to moonlight. \"Since 1980, the trend has been to maintain the production of Japan\'s most advanced products and transfer lower value -- Increased overseas production, \"said Katsunori Nemoto, industrial policy director of the influential Keidanren business lobby. \"Now the Japanese market is shrinking and Japan\'s advantage as an advanced R & D place is being questioned. . . We are very worried that the company will transfer their \"factory mother\" overseas. These concerns have only deepened since March 11. Kimyuki Kimura, president of Omura Giken, said: \"The tsunami hit roads, rail tracks and factory buildings . \" The Kamaishi-based electronic parts manufacturer sold about half of its products to Hirose Electric. All 160 Japanese workers fled their 20 s. metre (66-foot) He said it was a miracle to wave on Friday afternoon. \"When the second wave appeared on the horizon, they could see that it was higher than it was, and they fled to the mountain. But his five buildings and the machines insidecustom- Press, mold and automatic assembly machine designed for micro connector on smartphone and flat panel TV screenwere destroyed. \"This is devastating,\" Kimura said . \". \"They can\'t rebuild. \"That\'s why Yoshida is doing damage control tasks for mobile phone customers worldwide. However, the chaos in the global supply chain caused by the disaster is recovering faster than expected, largely due to cooperative arrangements that underpin Japanese companies After the disaster, industrial output has rebounded from deep recession as businesses and local communities quickly repair damaged supply chains and factories. Recovery will be a bigger problem for the towns of greater village Giken and Kamaishi. \"There are a lot of places that have given us work and have taken it to other places now,\" said Kimura, who grew up in Kamaishi, a fishing and Steel Company -- Nearly 40,000 of the towns that live deep- It is located in the mountains of northeast Japan in the Gulf and valley. \"I heard we had a lot of problems with the finished product -- We make goods because we can\'t supply them. \"Kimura has restarted some production at small factories elsewhere in Japan, convincing most of his top engineering talent to relocate to other company factories. But he did not have a plan to rebuild in Kamaishi because the government lacked a specific plan for the tsunami and he was stopped --hit region. He said he had no choice but to fire 230 workers in the factory. This is bad news for a town that is trying to create jobs and stop the exodus of young people, as Japan\'s biggest steel maker, Nippon Steel, began cutting its operations there nearly 50 years ago. Since then, the population of Kamaishi has fallen by more than half, and the proportion of the elderly has more than doubled. third. WOOD- A source of hope for burning stoves * Kamaishi is small businesses that have emerged after the steelworks have begun to scale down, and many countries have quickly recovered from the disaster without waiting for government reconstruction plans. The new factory in Xicun is located in an industrial zone on the southeast coast of the city center and is one of them. When blankets and other debris were hanging from the trees, piles of rubble were still thrown in the open space. \"This was supposed to be cleaned up last month,\" said short fat, soft Ishimura. spoken middle-aged man. His workshop has \"returned to the future\" to produce seafood processing equipment and Wood After many years of supplying the new Nippon Steel, burn the stove. The yard behind his second staircase was neatly lined with bulky iron furnaces. He took out a piece of leather in the office. Bound photo album, twisted and water- Got dirty by the tsunami. \"All of a sudden, we had no business with Nippon Steel,\" he recalled in his factory office, looking at pictures of cranes and equipment specially maintained by his company, until the last blast furnace closed in 1989. Ishimura reluctantly returned to ai City to work for the company his father founded, and it was a great opportunity for him to cut the cord of Japanese steel. \"I wanted to get rid of it. Although it is stable, it is not interesting. We don\'t try anything new when we work for the new Nippon Steel, \"he said. Ishimura is now content to continue doing business from the waterfront. He believes that his steel-frame building survived the waves as a deep embankment at Kamaishi Bay mouth weakened the tsunami as it approached the town. But the village of the great village of Kiken is really worried about the wisdom of living in the tsunami zone. He was worried that his night would come after dark Shift workers may not have seen a wave coming to them. At the national level, the plight of Kimura abandoning its base camp is being staged elsewhere in Japan. The disaster triggered a series of disaster recovery strategies, including the diversity of supply sources and the transfer of design and production capacity to manufacturing sites, including overseas, such as what Hirose Electric is doing. Kushida of Hirose Electric acknowledged that the cost concerns caused by the strong yen and the impact of the disaster on production are driving his company overseas. However, Kosei Shindo, executive vice president of Nippon Steel, said that Nippon Steel is committed to the remaining business of producing steel wires in Kamaishi. He believes that the strong sense of responsibility of Japanese enterprises to workers and communities will ease overseas actions. \"Managers in Japan fully understand the need to move overseas and they are doing so, but they also want to continue to make in Japan,\" he said . \". \"Manufacturing usually means making things in one place for a long time, developing technology, having a lot of employees, and employee loyalty is also necessary. It\'s not like finance, you just have to look at the screen and the buttons. \"While Japan\'s manufacturing supply network proved to be the most vulnerable after the disaster, Japanese companies are still eager to maintain the ecosystem despite the increasing pressure on relocation. Kushida of Hirose said that while his company will improve the technical expertise of its Korean subsidiary and improve The company hopes to keep suppliers in Japan. Hirose outsourced 80% of its domestic manufacturing to a \"factory-free\" or factory -- This allows it to focus on more profitable design work. \"We don\'t want our story-free network to crash,\" he said . \" \"We will gradually move to Hirose, South Korea, but we will continue (the network) From shrinking in Japan to passing on our new products to them so they can hold on. . . The global economy is off track, so we are worried about how things will go. But we won\'t break up. our network). \"Kimura of Omura Giken is also concerned about spreading his engineering talent to other sites, which will reduce the pace of innovation, driven by employee interaction. Some experts believe that Japan has the opportunity to get rid of the system of relying on the guidance and generosity of Tokyo ministries and big companies, which they see as an outdated model A globalized economy. \"I think this disaster will support manufacturing -- Popular areas, including Kamaishi, are not old vertical networks of subcontractors, but horizontal networks based on common concepts of trust and regional reconstruction, \"said Yuji Genda, professor at the Institute of Social Sciences at the University of Tokyo. \"These networks can be launched in these areas, not in Tokyo.