Will Japan Inc. say sayonara to TV manufacturing?

Will Japan Inc. say sayonara to TV manufacturing?

TOKYO – The TV set – once regarded by Japan Inc. as the focal point of every living room, essential to fuel growing demand for a host of other consumer devices – has turned on its parents, draining their resources and threatening their future.

Japan’s Big Three consumer electronics companies -- Sony, Panasonic and Sharp -- are suffering from TV fatigue. While no company seems to have a silver bullet to fix this gloomy situation, the strategy most touted by the media and among analysts here is both blunt and startling:

Get the hell out of the TV business — and fast.

Nikkei Business, the Japanese business publication, put a daring headline on the cover of its latest issue on Monday (May 21): "Sayonara, TV."

“Wake up, Japan, Inc," the story warns. "By clinging to the TV business, while accumulating losses, you’re treading water on the way to drowning. It’s time to abandon TV.”

That assessment is based on a pessimistic assumption shared by an apparent plurality of industry experts: flat TV manufacturers may never again be able to squeeze out profits. The hard reality is that Japan’s flat TV suppliers have little choice but to sell their panels at a loss, or forsake selling them at all.

The Nikkei Business story, however, overlooks a possibly significant historical lesson: Ending TV manufacturing in the 1980’s marked the beginning of the end of production, development and engineering activities for U.S.-branded CE companies in the United States. Zenith became LG of Korea, RCA became TCL in China, and the rest fits into the bleak pre-millenial history of American industrial decline.

But all that might not matter so much. Clearly, it’s upsetting to many in Japan that Panasonic, Sony and Sharp – the three biggest flat TV manufacturers here – are no longer making money on TV manufacture.

But also upsetting is the fact that the TV business isn’t just a drag. It’s sucking the life out of the big three.

Ailing Japanese CE manufacturers (fiscal year ending March, 2012)
TAG:Japan Flat TV Manufacture