Chapter 435 Impact
The impact of the Plaza Accord is far more than just the storm in the financial markets.
Because the five countries joined forces to lower the US dollar exchange rate, the speculative market focused on pushing up the Japanese yen.
This sends a signal to the outside world that the Japanese yen will continue to appreciate.
Based on this, the cost of imported neon products will also increase in the future.
Under this mentality, the decline in exports of Japan's manufacturing industry is also a normal response from the foreign trade market.
The Japanese government originally expected that even if the yen appreciated by 20%, Japan's export manufacturing industry would still be quite competitive.
But that is looking at the problem from the perspective of long-term development. It is normal in the short term for the market to change in response to such large actions by the five countries.
So starting from the fourth quarter after September, neon export trade was most affected.
According to the development patterns of previous years, the closer it gets to the end of the year, the normal range of year-on-year export growth of 6% to 8% is.
However, this year, not only did it not increase, but it fell by about 4%. In horizontal comparison, this is equivalent to a 10% to 12% plunge in export trade volume.
This is the first time in history, so many Japanese companies are facing a serious enemy.
As we all know, Japan is an export-oriented country, and its domestic economic growth is heavily dependent on exports.
If exports plummet, it will be a catastrophic blow to many companies in Japan.
Although the market share has only dropped by about 4% year-on-year, this is not a good sign.
I am afraid that this is just the beginning and the market will continue to fall.
After all, the current appreciation of the Japanese yen seems to be far from reaching its peak, so the export pressure of Japanese products will continue to increase.
Therefore, many physical manufacturing industries in Japan have already felt a sense of crisis.
However, also in the fourth quarter, Japan's stock market was completely incomprehensible to them.
It is clear that the trade share is declining and corporate profits are also declining, but the stock market is rising all the way.
This... Many company presidents who are worried about the decline in exports are starting to feel anxious.
The stock market and foreign exchange market are booming, and it seems that Japan's economy is on the rise.
In this case, if people have more money in their hands, can they stimulate domestic demand and make up for the profits lost from exports?
Taking a step back, since the stock market and foreign exchange market are making so much money, can those of us in the industrial sector also get in on the action?
After all, companies have strong financial strength and can naturally leverage larger capital than individual citizens.
Shirakawa Electric, which is also facing the same situation, is also discussing how to eliminate the impact of the appreciation of the yen.
“Ladies and gentlemen, we have to admit that in the short term, the appreciation of the yen will become the norm.
So how do we respond to rising export costs and falling trade shares? "
Inside the Shirakawa Building, many leaders of Shirakawa Holdings are gathered together to discuss the next countermeasures.
No one can avoid the pressure of yen appreciation. Some people continue to wait and see, while others are considering going to the stock market and foreign exchange market to play a favorable battle.
Some people are also actively seeking ways to break through the current situation of declining trade in order to maintain continued growth in the manufacturing industry.
It is obvious that Shirakawa Electric is ready to take the last route. Industry is the foundation and must not be given up easily.
"If the yen continues to appreciate, Shirakawa Electric's overseas market size will further shrink.
So in order to ensure profits, we must either open up new markets or find ways to reduce costs.”
As the head of the audio-visual division, Hasegawa's solution was very simple: either increase revenue or reduce expenditure.
"But Shirakawa Electric has basically developed the current international market. It will be impossible to find a new market of scale in a short period of time. As for the Asian market..." Akagi shook his head.
Asia's development is just in its infancy, with limited consumption capacity and market.
In particular, the game console division that Akagi is in charge of has hardly had any outstanding performance in Asia.
People haven’t even solved the problem of food and clothing, so how can they have the energy to entertain themselves?
Two years ago, Shirakawa Electric had already completed its global market layout, so the open source option was basically ruled out.
So how can we save money? Reduce the cost of raw materials? Or reduce the wages of employees?
Thinking of this, everyone turned their eyes to Baichuan Feng who was at the top.
“It is difficult to discover new markets in a short period of time, but we can cultivate the market in advance.
As for cost-cutting, we can find ways to reduce costs through parts costs, channels, and the entire industry chain.
Don’t touch the employees’ treatment unless it is absolutely necessary, and cost control will probably have to be achieved through another means.”
When they heard that Baichuan Feng was not going to affect the employees' benefits, everyone breathed a sigh of relief.
If a company needs to control costs by cutting wages, it means that its operating conditions have deteriorated significantly.
Of course, we cannot rule out some presidents’ outrageous actions, but it is obvious that Shirakawa Kaede is not that kind of person.
Pay cut? You must be kidding. A war for talent is about to begin.
Believe it or not, as long as Shirakawa Electric dares to cut salaries, new and old employees will run away in minutes.
However, since it is not a salary cut, it is achieved through another means.
So what exactly is this method, and the so-called market cultivation, everyone is very curious.
Without keeping anyone in suspense, Baichuan Feng directly stated the decision he had considered for a long time.
"Starting next year, all capacity expansion here in Neon will be stopped."
"Huh?"
As soon as he finished speaking, everyone present widened their eyes in surprise.
Although the Japanese yen has appreciated, Japan's economy is also booming.
Many companies are expanding their production capacity, but Baichuan Feng is now planning to do the opposite.
"Shirakawa-san, although there is pressure from the appreciation of the yen, isn't this decision too conservative?"
Hasegawa cautiously probed.
Waving his hand, Baichuan Feng explained the reason for doing this.
“Stop the expansion of Neon’s production capacity, which does not mean stop all capacity expansion.
We must consider the cost increase caused by the appreciation of the Japanese yen, because this is not a short-term phenomenon, it is likely to be the norm in the next few years.
A short-term appreciation of the yen may not threaten us, but a continuous normal situation is something no company can afford.”
"Mr. Shirakawa, what do you mean...?" Everyone seemed to understand.
"Overseas!" Baichuan Feng nodded calmly.
“Starting next year, all factories in Neon will maintain their current size, while increasing overseas investment.
We need to gradually relocate labor-intensive factories to reduce labor costs.”
With the arrival of the golden age, the average salary of Japanese people has reached 3 to 4 million yen per year as of this year.
Although front-line workers may be slightly lower than this value, it is not too far off.
Therefore, the rising labor costs are placing an increasing burden on the manufacturing industry.
In the next few years, due to the expansion of the bubble economy, labor costs will increase significantly.
By then, the huge number of employees and the salary costs that need to be paid will be astronomical.
This will be even more unfavorable for companies to reduce costs and ease export pressure caused by the appreciation of the yen.
It is precisely because of this understanding that Baichuan Feng decided to prepare for the future and make overseas arrangements in advance.
“The factories that are given priority to relocate include those producing low-tech electronic products such as Walkmans, game consoles, and AutoNavi toys.
It would be best if their raw materials could be sourced locally, and Neon only exports key components.
As for the targets of relocation…” Baichuan Feng paused, “Huaxia and Taiwan are the first targets to be considered.”
It is natural for manufacturing companies to relocate to markets with lower labor costs.
At the same time, obtaining some raw materials locally can further reduce production costs, and Neon can just grasp the core technology itself.
No one has any objection to this, but everyone is somewhat confused about the location of the factory relocation.
"Mr. Shirakawa, the situation in Formosa is still easy. But China... isn't it a little too radical?"
Although Japan and China have had normal diplomatic relations for more than ten years, they belong to different ideological camps after all.
Especially during the Cold War, did the American father really have no objection to doing this?
Baichuan Feng smiled indifferently, "You can rest assured about this. Don't forget that China and the United States are now in a honeymoon period."
It is precisely because of the existence of Aso, the other party in the Cold War, that China can coexist harmoniously with Amei during this special historical period.
The two sides are not only in , but have also carried out a lot of cooperative research and development in military technology.
Yes, can you imagine that in the 1980s, China and the United States cooperated in weapons.
The famous Peace Model Project covers a very wide range.
There are improvements on the Qiye and Baye, research and development of multi-purpose helicopters, and even express delivery projects.
This is simply unimaginable in the 21st century, but in the magical 1980s, it was happening.
These things were reported in the newspapers. After Baichuan Feng said this, everyone thought about it carefully and realized that it was indeed true.
Shirakawa Electric only makes some electronic consumer products, and there is nothing confidential about it, so there is no need to worry about these things.
What's more, there are precedents. Baichuan Feng can cite a lot of them at random.
“Establishing a factory in China is not a big deal.
Panasonic, Toshiba, and Hitachi all entered China in the 1970s, so Shirakawa Electric was late. "
Do you know what kind of factory Panasonic built in Northeast China? An electric motor factory!
If we really talk about sensitivity, this thing is much more sensitive than Shirakawa Electric's Walkman and game console.
When the great man visited the Panasonic factory in Osaka, he saw the rows of modern machines.
The great man held Konosuke Matsushita's hand and sighed, " Mr. Matsushita, can you help China's modernization drive?"
The 83-year-old Konosuke Matsushita immediately promised to help China achieve modernization.
So the next year, Konosuke Matsushita was invited to visit China. At that time, China did not even have an embassy in Japan.
But it was under such circumstances that Panasonic established what would later become an electric motor factory in Northeast China.
After that, Toshiba, Hitachi and other companies also entered China in the late 1970s to start cooperation.
So when Shirakawa Electric decided to enter China at this time, it was already one step late compared to the old companies.
"China has a huge population, which in itself is a huge market with unlimited potential in the future.
Now the labor cost there is low and the price of raw materials is low, which is very helpful for us to reduce production costs.
In addition to walkman, we at Shirakawa Electric will also produce radios and other products locally.
The former is for export, and the latter is for local sales. I believe that after a few years of development, China itself will grow into another major market for us.”
In addition to relocating the existing factory, Shirakawa Feng also decided to start production of "antique" products such as radios in China.
Their potential customers are the developing countries in Southeast Asia.
In this way, Shirakawa Electric can reduce its own production costs and alleviate export pressure.
At the same time, it can cultivate the Southeast Asian market, even if it is just products such as radios with relatively thin profits.
As for why Baichuan Feng was so confident that he could enter the Chinese market, did he really think that his trip to the embassy was in vain?
