Terrie's Take 694 -- GS Yuasa Battery Cause of 787 Fire? Ebiz news from Japan.

Terrie's Take terrie at mailman.japaninc.com
Sun Jan 20 23:48:29 JST 2013

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, Jan 20, 2013, Issue No. 694


- What's New -- GS Yuasa Battery Cause of 787 Fire?
- News -- US fund predicts financial meltdown in 2015
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Bars and Rickshaws in Tokyo
- Japan Business Q&A -- Godo Kaisha vs. Kabushiki Kaisha
- News Credits

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Boeing Corporation's future hinges on the success of its 787 "Dreamliner"
and after 50 deliveries the company still has 798 back orders on its books,
a record for a newly introduced wide-bodied commercial jet -- all thanks to
the massive 20% fuel savings the aircraft offers operators. So it is a
major blow that at least 5 safety-related incidents, including several
fires, have prompted ANA, JAL, and authorities in the USA, India, and
elsewhere to ground all Dreamliner aircraft until a thorough safety review
has taken place.

Among the various incidents, the most shocking have been the incineration
of the auxiliary power unit on an empty JAL aircraft at Boston's Logan
airport, then just 8 days later a forced landing of an ANA jet with another
major electrical problem. Both incidents were highly publicized, and the
media have been quick to focus on the batteries and the fact that in the
JAL incident it was seeping liquid as well as having been incinerated to
ashes. "It's the batteries!", "What were they thinking putting Lithium-ion
batteries in aircraft?" have been some of the more melodramatic comments
covering the subject.

The fall out for the battery maker, Kyoto-based GS Yuasa, has been
significant, with its stock dropping as much as 10% after the media reports
appeared. We imagine that until an investigation is done and findings made
public, the stock will take even more of a hammering. But as we relate
below, maybe the stock market is overreacting. In fact this could be a
buying opportunity for level-headed investors.

The reason Boeing is using a Lithium-ion power plant in the 787 is simple,
it's the only presently available technology that packs sufficient energy
density to make the Dreamliner and its low-weight, substantially-electric
concept work. The company promised the 20% fuel savings to its loyal
customer base by a certain production date (although they missed their
original targets) and wouldn't have been able to retain its customers
without the technology. So it was fundamentally a business decision to use

[Continued below...]

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[...Article continues]

We believe that before everyone draws conclusions that Lithium-ion
technology is too dangerous for aircraft, that we step back a little and
ask if we are seeing the whole picture. Media exposure of Dell laptops
exploding and burning, and test EVs doing the same thing, have created the
idea that Lithium-ion technology is dangerous. OK, yes it is, but so is
aviation fuel. In order to make these volatile compounds safe to use
commercially, we have companies with squadrons of scientists and engineers
creating delivery systems that allow practical application of them.

For Lithium-ion batteries for example, intelligence can be built in which
detects short circuits, preventing high current draw and subsequent
overheating of the battery pack. Semiconductors monitoring each cell in the
battery can shut down the damaged cell before things get dangerous. We
think it is naive to believe that GS Yuasa, one of the world's leading
battery producers, and certainly with years of experience in handling
Lithium-ion products, is unaware of the dangers of the chemistry and hasn't
built in safeguards to make them reasonably safe.

Instead, we believe the investigators will be looking not just at the
batteries but also for an external cause that may have caused them to
ignite. As one investigator at the Japan Transport Ministry said, "The
state of the battery indicates voltage exceeding the design limit was
applied". That kind of comment immediately makes us think that they suspect
the cause is voltage spikes caused by arcing or flash over from  damaged or
improperly connected electrical cabling or connectors.

Actually, this is not a new problem. Back in the 1990's it was found that
Dupont's Kapton-insulated aircraft cabling, known for its light weight,
high insulative characteristics, and durability, was in fact sensitive to
moisture and could break down and cause carbon tracking and arcing, and
consequently high voltage surges. There were a number of aviation incidents
suspected of being related to Kapton breakdowns, including the crash of
SwissAir Flight 111 off the coast of Canada in 1998. All 229 people on that
flight perished.

In fact, fears about Kapton got so bad that in 1986 the US navy started
removing the material from selected flight critical applications in its
aircraft and in 1997, the US Coast Guard completely stripped Kapton-covered
cabling from all its helicopters. Now, we're not saying that Kapton is the
cause of the Dreamliner's problems, because Boeing apparently ceased using
Kapton in the 1990's, but the fact that even the most basic
infrastructure in a plane can cause catastrophic effects means that no one
should jump to conclusions too quickly.

Another possibility is that Boeing's 787's wiring may be "weirding out" in
a way that didn't show up in the test models (although in 2010 the
development program WAS disrupted by an electrical problem that caused
smoke to fill the cabin). Maybe the wiring configuration is causing
inductive loads under certain situations or maybe there is a manufacturing
fault causing high-resistance connections. Either condition could cause
voltage spikes high enough to knock out the battery and its protective
circuits. Since these types of faults can very subtle they could take
investigators weeks or even months to track down. Indeed, even Kapton was
never fingered definitively and continued to be used on aircraft until just
a few years ago.

A subtle problem will certainly be bad news for the airlines. Apparently
JAL, for example, is losing JPY100m a day by having its 787 fleet grounded.

Lastly and perhaps not surprisingly, GS Yuasa has nothing on its websites
yet about the problem and isn't demonstrating in a visible way that it is
managing the Public Relations (PR) fall-out. Why Japanese companies are so
slow to acknowledge crises like this and respond to them is beyond us.
They're an international player and should be adopting international best
practice in PR and damage control. But, just as Toyota did, GS Yuasa
appears to be in "hunker down" mode while the world's media are pointing
fingers. This looks suspicious and is damaging to their brand. Instead, if
they had their wits about them they should conduct a campaign that shows
active public concern and action. Then, once they have been vindicated they
could enjoy a strong recovery and kudos for their handling of a difficult

...The information janitors/


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+++ NEWS

- Child abduction bill gets sidelined
- US fund predicts financial meltdown in 2015
- Line passes 100m users
- Apparel company hits earnings high
- Another blow-out government budget

=> Child abduction bill gets sidelined

In a rather depressing development, the LDP's Justice Minister has said
that pending legislation on the Japanese signing of the Hague Convention on
the Civil Aspects of International Child Abduction is going to be pushed
off for at least another year. Sadakazu Tanigaki said that the Diet had a
full roster of more pressing issues to deal with and in any case the bill
submitted in 2009 by the DPJ needs to be reviewed. ***Ed: He could have
added that the LDP has already been "reviewing" the issue since 1980, when
the treaty was first signed by most other advanced nations. We think the
reality is that they don't want to change the law in the first place.**
(Source: TT commentary from japantimes.co.jp, Jan 19, 2013)


=> US fund predicts financial meltdown in 2015

Hayman Advisors famed head, Kyle Bass of Texas, is at it again,
interviewing on TV and at conferences predicting that Japan will have a
government debt crisis within the next two years. Bass, who successfully
bet against the home mortgages securitization industry in the USA in 2007,
then again bet against Greek debt in 2010, is now predicting that Japan has
gone past the point of no return, with "current debt levels over 25 times
the 2011 tax revenues". ***Ed: Bass reckons that Softbank buying Sprint in
the USA is an example of Softbank looking to take its assets out of Japan
before the debt crisis hits. He says that Dentsu's and other major
corporate acquisitions abroad are also all part of a similar hedging
strategy by those corporations.** (Source: TT commentary from cnbc.com, Jan
18, 2013)


=> Line passes 100m users

Japan's hit messaging app, Line, by Naver Corp., has announced that it now
has 100m users globally, just 19 months after its launch. According to
TechCrunch, the company said in July 2012 that it was making revenues of
about JPY350m per month from character sales (what they call "stickers")
and ad revenues from coupons offered to users, and that this number is
"much higher now". Naver has also said that they are taking the app to the
US market, where they hope to compete with Facebook Messenger. ***Ed: Like
any social app, Line will need registered users to become successful. The
interface is a lot more fun for kids and teens than Facebook is, so from
that point of view, they may do quite well.** (Source: TT commentary from
techcrunch.com, Jan 18, 2013)


=> Apparel company hits earnings high

Of all the non-software, legal businesses you can do in Japan, apparel is
certainly one of the most profitable, as proven by Fast Trading's Uniqlo
brand. Another brand that is doing extremely well is United Arrows of
Akasaka, which has reported that it has earned JPY12bn on sales for 9
months of JPY85bn. Both earnings and sales were up 10% and were the third
year in a row of record results. ***Ed: What is remarkable about United
Arrows is that their merchandise is anything but cheap -- thus bucking the
"shopping as low-cost entertainment" trend started by Uniqlo, Forever21,
and others. Apparently, the firm is expert in reading momentary weather and
fashion trends, and changing the window displays accordingly. Thus back in
October last year, which was relatively warm, while other stores showed
winter goods, United Arrows still had a strong selection of
temperature-appropriate apparel on display.** (Source: TT commentary from
e.nikkei.com, Jan 19, 2013)


=> Another blow-out government budget

PM Abe is determined to have Japan spend its way to fiscal health, and the
government is lining up a main budget (forget about the special budgets
that take us over the JPY100trn mark) of a record JPY93trn for FY2013 --
the seventh straight year of general account spending increases. In terms
of where the money comes from, the tax revenue through to March 2013 is
expected to be around JPY44trn or so, while bonds issued will account for
most of the rest. ***Ed: Yup, tax accounts for less than half the juice the
nation needs, and interest on previous bonds issuances eats up half that
amount. Goodness knows why Abe thinks inducing inflation won't cause the
interest rates to rise as well...** (Source: TT commentary from e.nikkei.com,
Jan 19, 2013)


NOTE: Broken links
Some online news sources remove their articles after just a few days of
posting them, thus breaking our links -- we apologize for the inconvenience.


--------- Shojin Ryori: the real thing, in Tokyo ----------

Shojin Ryori is a unique Japanese temple vegetarian cuisine colloquially
called “monks’ food”. The Dewa Sanzan variant is known for using vegetables
found in the nearby Shonai Plain and wild mushrooms and vegetables picked
on the slopes of the sacred Mount Gassan. The meals are served to pilgrims
at the temple lodgings in Toge Village, which lies at the foot of Mount
Haguro, one of the other three sacred mountains of Dewa (Dewa Sanzan).

Now, Dewa Sanzan's “yamabushi” (mountain priests) have decided to travel
from Yamagata to Tokyo to introduce their cuisine to the foreign community
here, with a limited-seating sampling of dishes, teas, local sake, and some
local entertainment -- all absolutely free (first registered, first in).
One day only.

Schedule: Saturday, February 9th, 13:30-15:30
Venue: Neuro Cafe (www.neuro-cafe.com/), Jingumae
Fee: Free (incl. sampling meals, herbal tea,local sake)
Location: 2F, Jingu-mae 2-13-2, Shibuya-ku, Tokyo
Nearest Stn: JR Chuo/Sobu Line Sendagaya (9min walk)/Metro Ginza Line
Gaien-mae (7min walk)

For more information: http://japantourist.jp/view/dewa-sanzan-shojin-ryori
To register: Email info at cradle-ds.jp.


=> BiOS, a leading bilingual Tokyo IT company, is actively marketing the
following positions for customers setting up or expanding in Japan, as well
as other employers of bilinguals.


BiOS is urgently looking for a MAC Coordinator for our client, a global IT
hardware and services provider who is servicing a global bank in Tokyo. The
successful candidate will be responsible for coordinating with end-user
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coordinating with domestic vendors for service MAC requests, as well as
working alongside desktop engineers to provide a complete MAC solution. In
addition, you will create, manage, and share tracking sheets and help
manage various MAC projects.

Due to the demanding work environment, this position is suitable for
someone with 2 to 3 years of experience working in an IT department
(multinational strongly preferred), and the ability to work with tracking
sheets in an organized fashion. In addition, given the constant
communication with foreigners and Japanese alike, conversational-level
English and native-level Japanese are required.

Remuneration is negotiable depending on your experience and skill level.


- Network Engineer, global data center services provider, remuneration
- Service Delivery Manager (Data Center), large data center services
provider, remuneration negotiable
- Staffing Consultant, IT services provider, remuneration negotiable
- Server Engineer, major Japanese online company, remuneration negotiable
- Software Asset Management Officer, global bank, remuneration negotiable

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Every 2 weeks BiOS sends out a regular communication to its job seeking
candidates, called BiOS Job Mail. Every edition carries a list of BiOS's
current and most up-to-date vacancies, with each entry featuring a short
job description and a direct link to the main entry on the BiOS home page.
Regardless of whether you are unemployed and searching, thinking about a
career change, or just curious to know if there is something out there that
might suit you better, the BiOS Job Mail newsletter is an easy and
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the BiOS Job Mail, or to find out more, please email
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Interested individuals may e-mail resumes to: jason.kisling at biosjp.com and
check out the BiOS web page for other jobs:



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Speaker: Gen Utsumi, Head of Sales & Business Development APAC for
smartTrade Technologies.

Title: "The Reality of Electronic FX Trading" Details: Complete event
details at http://www.icajapan.jp/

Date: Thursday, February 21, 2013
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No sign ups
at the door!!!!!!!
RSVP: RSVP by 5pm on Friday, February 15th
Venue is The Foreign Correspondents' Club of Japan

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takes to make it successful. Terrie Lloyd, founder of over 17 start-up
companies in Japan, will be giving an English-language seminar and Q&A on
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This is an ideal opportunity to find out what is involved, and to ask
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------------------ Prestigious Writing Prize --------------

The Japan - U.S. Innovation Award Program <http:/www.usjinnovate.org>,
which is produced by the Japan Society of Northern California in
cooperation with Stanford's US-Asia Technology Management Center, is
opening up a new award category this year: the "Untold Story in Innovation"

This will go to the author of a previously unpublished story of
intrapreneurial innovation inside a company (probably a large company) that
has relevance to Japan - U.S. business. This award is aimed at professional
or part-time journalists and other researchers/writers.

The award is for an English language piece of journalism. There will be one
winning author, who will receive a $3,000 cash prize. We will also
recognize two Award Alternates, who will each receive a $1,000 cash prize.
Although the cash prizes will only go to the winning
authors, the innovators and companies featured in their stories will also
be named as recipients of the honor.

The first step is to send in a "pitch" proposal to the Subcommittee for
this Untold Story award, namely:

Richard Dasher <rdasher at stanford.edu>
Dana Lewis <danalewis at mac.com>
Andrew Neuman <aneuman at usajapan.org>
with cc to John Thomas <JOHNRTHOMAS at me.com>

Deadline for the pitch is January 31, 2013. PLEASE REFER TO the attached
document for details on what to include in the pitch, etc. If you have
further questions, please contact Prof. Richard Dasher <rdasher at stanford.edu>
or Ms. Dana Lewis <danalewis at me.com>.

---------------- Share House Near Ikebukuro ---------------

There are gaijin share houses, and those that you share with others on a
casual basis, but none has the facilities and amenities of this
new-to-market offering in Oizumigakuen. Large 4-bedroom house with large
yard, share kitchen-living-dining rooms, and with your own large bedroom.
Available for short and long-term tenants. Just JPY50,000/month. Includes
share of internet connection.

Only 20 minutes by train from Shibuya/Ikebukuro.

Contact the owner at hatanokawakatsu at yahoo.com



In this section we run comments and corrections submitted by readers. We
encourage you to spot our mistakes and amplify our points, by email, to
editors at terrie.com.

=> In our Bonsoy article last week, we pointed out the follies of exporting
foods that are formulated for one national diet type and expecting it to
work where there is a completely different diet type. In Bonsoy's case,
high salt tolerance in Japan versus low tolerance in Australia. A reader
reminds us of a similar situation several years ago.

*** Reader says:

If I remember correctly, Hong Kong banned some Japanese baby milk products
citing the fact that they had levels of iodine below that of WHO standards.



=> A stroll through Sangenjaya, Tokyo
Daily life on a shotengai (local shopping street)

I threaded my way through the narrow streets crisscrossing the other side
of Sangenjaya station one evening. Here, a diversity of cheap eating-places
dot the streets, surrounding you with izakayas (bars) of many sizes. Young
ladies and men stand outside their drinking establishments, calling out
"irashaimase!" (Welcome!), handing you pamphlets whilst detailing their
specials of the night: 120 yen beers, free flow of house wines,
ridiculously cheap set menus - the list goes on. In the same lively street
you can also find small boutiques and thrift stores selling household
accessories: towels, crockery, stationary, clothes and other small random
gadgets, all for very affordable prices.


=> Jidaiya Japanese Culture Experts, Tokyo
The heart of a rickshaw man opens up Asakusa to you

Jidaiya's stated mission is to offer Japanese culture in visible forms to
everyone. To meet this objective, they present you with various
opportunities to experience this country and its way of life. From rickshaw
tours of Asakusa to photo sessions in traditional clothing to hands-on arts
and crafts, there is something special for everyone.

If a rickshaw ride through Asakusa suits you, there are various courses and
tours available. As the longest-serving rickshaw company in Tokyo's
historic Asakusa area, Jidaiya has built up many years worth of
street-level expertise in their trade. Who better to teach you the ins and
outs of daily life in "real" Tokyo than the men and women who regularly
pass through the city's every street and alleyway? First-timers to the area
can use this as a good way to orient themselves, as they can get a good
overview without getting lost. Repeat visitors can use a rickshaw tour to
gain an insider's perspective on this part of Tokyo that most people merely
skim the surface of.



+++ JAPAN BUSINESS Q&A -- Godo Kaisha vs. Kabushiki Kaisha

=> Q. My friend and I have been thinking about starting our own consulting
firm. What is the difference between a Godo Kaisha and a Kabushiki Kaisha?
Which would be a better choice for our purposes?

A: The answer to your question will depend a bit on your priorities. The
company form called Kabushiki Kaisha (KK) tends to have a bit more value in
terms of recognizabilty in comparison to a Godo Kaisha (GK), but it also
costs more to establish and requires at least one shareholder meeting a
year - which may not fit your needs. For this reason (convenience and
costs) the GK form is increasing in number.

More specifically, the main differences between the two company forms are
as follows:

1. Stakeholder responsibility
The KK is a company form that allows shareholders to have limited
responsibility by separating ownership from the directors, executive
officers, and management that run a company. On the other hand, GK is also
a company form that allows stakeholders to have a limited responsibility
but  the stakeholders also serve as the managing members running the

2. Corporate management
In the case of the KK, directors and executive officers run a company under
the Japanese Companies Act. They are subject to the restrictions and
business procedures that are required under this law and therefore
decision-making may at times seem slow. Management will serve under
fixed-term contracts, and the KK will need to make their financial
statements public, adding an additional layer of cost. Profit and authority
proportional to the amount of investment.

To continue reading...




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Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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