<p>* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>A weekly roundup of news & information from Terrie Lloyd.<br>(<a href="http://www.terrie.com/">http://www.terrie.com</a>)</p>
<p>General Edition Sunday, August 14, 2011, Issue No. 626</p>
<p>+++ INDEX</p>
<p>- What's New -- Why Ohio Shouldn't Cut its Foreign Offices.<br>- News -- US$800m auto plant in Mexico for Honda<br>- Candidate Roundup/Vacancies<br>- Upcoming Events<br>- Corrections/Feedback -- Was Nikkei too fast on the <br>
trigger about Hitachi-MHI merger rumor?<br>- News Credits</p>
<p>SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a></p>
<p>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br><a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a></p>
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<p><br>+++ WHAT'S NEW</p>
<p>Some readers may know that within the LINC Media group of <br>companies, of which Japan Inc. Communications putting out <br>this newsletter is one, we also represent the State of <br>Ohio. This is a representative office position that Japan <br>
Inc. won in an open bid back in 2008 and the team has been <br>helping Ohioan companies find business partners and markets<br>in Japan, as well as helping Japanese companies do Foreign <br>Direct Investment (FDI) into Ohio. </p>
<div>It's been an interesting journey so far, with around 15-20 <br>companies a year coming through the Ohio Department of <br>Development (ODOD) Global Markets Division. Not many people<br>realize that Ohio has the second largest population of <br>
Japanese companies in the USA, thanks to Honda setting up <br>the first major Japanese auto factory in the USA back in <br>1982 in Marysville. They since have caused hundreds of <br>parts suppliers to set up shop there as well, and even <br>
though those suppliers now also support Toyota, Nissan, and<br>others in nearby states, they stay in Ohio for convenience</div>
<div>and collaboration.</div>
<p>Ohio learned well from the Japanese experience, and in 1990<br>set up a network of overseas offices that had the state <br>leading the way in foreign presence and foreign <br>relationship building. At the peak there were 13 offices, <br>
although currently there are 11. They are located in <br>strategic places such as Canada, Mexico, Belgium, Chile, <br>Brazil, Israel, South Africa, Southeast Asia, China, Japan,<br>and India. Surprisingly, given that level of presence, the <br>
publicly stated budget for the offices is just US$3.5m, <br>which includes the Columbus head office. This is a pretty <br>efficient number that many exporting companies would be <br>happy to be able to achieve.</p>
<p>It was with some surprise then, that a decision was made a <br>few days ago (and which is now on public record and thus <br>why we can discuss it), to substantially reduce the Global <br>Markets team team from 19 down to 4 people, and to possibly<br>
cut all the foreign offices. While we realize that Ohio <br>like most states is having a massive challenge balancing <br>its books in the current economic environment, it is hard <br>to comprehend why, if the US national imperative is to have<br>
the country ramp up its exports again, that these <br>well-established channels for trade leads and development <br>are being dumped because of short-term budget cuts.</p>
<p>[Continued below...]</p>
<p>---------------- Would You Write to Eat Out? --------------</p>
<p>Metropolis' <a href="http://www.metrodining.jp/">www.metrodining.jp</a> website is gaining followers<br>at a prodigious pace, and we need more expertly written<br>food reviews.</p>
<p>If you can write, and if you eat out a lot anyway, just<br>how many reviews of places you have already been to would<br>you be willing to write, in return for a meal out for two<br>as payment? Or, what if you were "paid" in hotel rooms at<br>
resorts outside Tokyo, or in brand name clothing or airline<br>tickets?</p>
<p>We're interested to know the answer to that question and<br>invite readers to contact us and share their opinions.<br>Better still, if you would like to be a guinea pig in a<br>new barter payment program we are considering for<br>
Metrodining.jp, then email and let us know that, too.</p>
<p>Contact us at <a href="mailto:terrie@metropolis.co.jp">terrie@metropolis.co.jp</a> to kick things off.<br>------------------------------------------------------------</p>
<p>[...Article continues]</p>
<p>To be fair, our understanding is that Ohio Governor Kasich <br>plans to have many of the export-building functions of ODOD<br>Global Markets incorporated into JobsOhio, a new <br>semi-private organization tasked with investing in <br>
companies to push up their exports more. Because the <br>organization is new, there isn't any real definition yet on who <br>will get assistance and who won't, but given that it is <br>premised on investments, we can assume that companies not <br>
deemed as being worthy of investment (or not wanting it) <br>will no longer use state assistance to build exports. This <br>sounds like a service downgrade to us.</p>
<div>Actually, this approach of a government focusing on export <br>winners is not unique, and in the last ten years there has <br>been a notable move to this philosophy amongst government </div>
<div>trade organizations in many other countries as well. On a </div>
<div>macro level it means that money goes to the companies <br>most likely to use it effectively and theoretically this <br>translates into higher overall exports for the nation -- so<br>it could be a good thing. But on the downside there is the <br>
moral issue of making it so much more difficult for smaller<br>firms to get cost-effective export help.</div>
<p>On top of the moral issue there is the loss on the state's <br>investment in its trade offices network and also the <br>knock-on effects of closing down a trade development <br>facility which has run smoothly for 20 years and which was <br>
producing a demonstrable level of performance and results. </p>
<div>Firstly, the financial loss. Ohio's roughly US$80m <br>investment over the last two decades has allowed it to <br>create a massive database (if Japan is anything to go by) <br>of tens of thousands of foreign prospective partners, <br>
customers, and investors. Without maintenance by local <br>bilinguals, this database will soon degrade and become <br>worthless in a matter of months. One would think that Ohio <br>would be looking to protect this investment and build on <br>
it. Indeed, thanks to having just such a database, foreign </div>
<div>office staff are able to act on Ohio company requests for </div>
<div>help to get market numbers, partner introductions, or push</div>
<div>a deal through, with surprising speed. 3- to 5-day </div>
<div>turnarounds to get a project started and 6-8 weeks to </div>
<div>deliver are not unusual. This certainly won't be possible in </div>
<div>the new regime if there are no in-country local </div>
<div>representatives. </div>
<div> </div>
<div>Secondly, the knock-on effect. It's a given in Asian <br>business, not just Japan, that you show long-term <br>commitment to your partners. Not just for Ohio, our Tokyo <br>market entry team deals with many companies from other <br>
states and countries, who quickly realize after they have </div>
<div>won their first big contract that they are expected by their</div>
<div>new Japanese partner to set up a company here -- so as </div>
<div>to show commitment. This requirement is not just custom,</div>
<div>it's very real and foreign firms who won't do it soon find </div>
<div>their new deals drifting on to the rocks.</div>
<div> </div>
<div>To the western mind, setting up a local team means an <br>entity to service the R&D and marketing needs of the local <br>partner. And so most companies head off in this direction <br>and it's a start. However, for the local Japanese partner, <br>
the presence of a local office is all about having someone </div>
<div>to interact with, to scold, and who will get them <br>attention and results from head office if things don't go <br>well. They have learned from experience that a foreign firm <br>trying to manage a Japanese business from headquarters</div>
<div>is going to suffer from "out of sight, out of mind" syndrome.</div>
<p>Local presence also means local legal responsibility and <br>thus more care by the US firm over its Japan-based <br>commitments and involvements. This may not seem like a <br>desirable state of affairs for the US firm, but ironically <br>
a local formal presence can actually mean less overall <br>risk, since it generally limits court decisions to the<br>local firm only. This means that in the worst case scenario<br>the US firm could sacrifice the Japan entity by allowing it<br>
to go bankrupt, without immediate damage to the <br>headquarters.</p>
<p>Now back to Ohio...</p>
<div>A spokesperson for JobsOhio, a Ms. Tanner was reported</div>
<div>in the local press as saying, "It could also be more </div>
<div>efficient to have officials travel overseas and meet with </div>
<div>certain investors and businesses a couple of times a year </div>
<div>rather than have a presence in the country year-round." </div>
<div>This seems a bit disingenuous, given that Kentucky and </div>
<div>other states and countries are actively competing for and <br>have successfully won billions of dollars of Japanese <br>auto businesses that potentially could have gone to Ohio. <br>Think Toyota, Nissan, Firestone (manufacturing) and others.<br>
These competing states are still very much in business in <br>Japan and will make the most of this opportunity to fill <br>the vacuum. Ohio should not be surprised at the <br>consequences.</div>
<p>But there does appear to be slim chance of a reprieve, <br>since the final decision on the foreign offices doesn't <br>seem to have been made yet. The relatively new director of <br>ODOD is Ms. Chris Schmenk and according to her profile on <br>
Linked In, Ms. Schmenk is still the Mayor of Marysville -- <br>you know, the place where Honda has its main US operations <br>and employs 13,400 people? We imagine that Honda is still <br>the largest local taxpayer at Marysville, and so she would <br>
be in an ideal position to influence JobsOhio to understand<br>Japanese and Asian cultural needs, and in particular the <br>need to win their trust through strong bilateral links, not<br>fleeting hit-and-run unilateral ones.</p>
<p>**********</p>
<p>Lastly, two things:</p>
<div>1. If you like Australian, Kiwi, California and other New <br>World wines, then you probably know about Village Cellars <br>(VC), Japan's largest independent importer of such wines. <br>Headed by Mr. Nice Guy of the Japanese wine world, </div>
<div>Richard Cohen, VC have a fantastic selection at their </div>
<div>cellars in Nagano and are easy to deal with in English. </div>
<div>The only problem was that you couldn't buy from them </div>
<div>through an online store. Well, the good news is that </div>
<div>through their WineBuzz brand, now your can. They're </div>
<div>online at Metropolis' first web store. You can order </div>
<div>already, at <a href="http://shop.metropolis.co.jp/winery/">http://shop.metropolis.co.jp/winery/</a>, and<br>shipments will resume from Wednesday the 16th, after <br>WineBuzz comes back from a short Obon break.</div>
<p>2. Next week is a slightly delayed Obon holiday for us: one<br>of the four weeks a year that we take a break from Terrie's<br>Take -- it's too hot to think properly anyway. We will be <br>back on duty on August 28th.</p>
<p><br>...The information janitors/</p>
<p>***------------------------****-------------------------***</p>
<p>--------- BIOS - Bilingual IT Systems and Support ---------</p>
<p>BiOS full-service IT solutions has a new service.</p>
<p>Working with our fully licenced temporary dispatch group,<br>we are now able to provide Japan in-country workers<br>for companies not yet registered in Japan.</p>
<p>This innovative service is available for companies needing<br>to hire staff for Japanese customers, but who are unable<br>to commit to the expense and infrastructure of maintaining<br>an office in Japan. We take care of all aspects of the<br>
employment, contracting, and dispatch -- including<br>management of the employee.</p>
<p>Also, if you're thinking of Cloud office solutions, take a<br>look at Microsoft's new Business Productivity Online<br>Standard Suite. Terrie mentions Exchange Online in TT602,<br>and we can do the same implementations for you.</p>
<p>For more information on this and other SI and IT services,<br>in English or Japanese:</p>
<p>Phone: (03) 4588-2220, Email: <a href="mailto:solutions@biosjp.com">solutions@biosjp.com</a><br>Web: <a href="http://www.biosjp.com/">www.biosjp.com</a><br>-----------------------------------------------------------</p>
<p>+++ NEWS</p>
<p>- US$800m auto plant in Mexico for Honda<br>- 3 die, 729 hospitalized due to heat<br>- Vegetable prices climbing<br>- Train operator goes into agribusiness<br>- New legislation on alternative power by September</p>
<p> </p>
<p>-> US$800m auto plant in Mexico for Honda</p>
<p>Honda Motor has announced that it will build an US$800m <br>auto plant in Guanajauto State, about 330km from its <br>existing plants, to produce approximately 200,000 <br>subcompact cars for sale in North America. The plant will <br>
begin operation in 2014, and will lift Honda's North <br>American production to around 1.83m units a year. ***Ed: <br>Honda hasn't said what models they will produce, but <br>speculation is that they will be the Fit, CR-Z hybrid, and <br>
Insight hybrid. These vehicles are currently assembled in <br>Japan -- so that won't be good news for Japanese workers.**<br>(Source: TT commentary from <a href="http://autonews.com">autonews.com</a>, Aug 12, 2011)</p>
<p><a href="http://www.autonews.com/apps/pbcs.dll/article?AID=/20110812/OEM/110819959/1054">http://www.autonews.com/apps/pbcs.dll/article?AID=/20110812/OEM/110819959/1054</a></p>
<p>-> 3 die, 729 hospitalized due to heat</p>
<div>If you think it's hot -- and Japanese summers always are --<br>well it is. The Met Agency has said that temperatures <br>nationwide exceeded 35 degrees on Thursday. The current </div>
<div>heatwave up until Wednesday resulted in 3 deaths from </div>
<div>heatstroke and more than 729 hospitalizations, 14 of them </div>
<div>serious. ***Ed: The heat is likely to be with us for this </div>
<div>coming week, then ease a bit the following week.** </div>
<div>(Source: TT commentary from <a href="http://japantimes.co.jp">japantimes.co.jp</a>, Aug <br>12, 2011)</div>
<p><a href="http://search.japantimes.co.jp/cgi-bin/nn20110812a2.html">http://search.japantimes.co.jp/cgi-bin/nn20110812a2.html</a></p>
<p>-> Vegetable prices climbing</p>
<p>Hot weather is also responsible for driving up vegetable <br>prices, as you most surely will have noticed at the <br>supermarket this weekend. The wholesale prices of tomatoes,<br>zucchini, and soybeans are up by up to 40% over this same time <br>
last year. Tomatoes on Friday were selling wholesale for <br>JPY402/kg, a situation blamed on excessive heat in Aomori <br>interrupting pollen development of the fruits. Shipment <br>volumes were down 10%. (Source: TT commentary from <br>
<a href="http://e.nikkei.com">e.nikkei.com</a>, Aug 13, 2011)</p>
<p><a href="http://e.nikkei.com/e/ac/tnks/Nni20110812D1208A02.htm">http://e.nikkei.com/e/ac/tnks/Nni20110812D1208A02.htm</a></p>
<p>-> Train operator goes into agribusiness</p>
<div>In what seems to be a logical and market-influencing step, <br>rail operator Kintetsu Corporation has decided to go into <br>the vegetable growing business. The company is going to set<br>up lots on unused railway land they own but which was never<br>
developed, particularly in Nara and Mie. The company <br>appears quite serious about the proposal, and is going to <br>also look at leasing unused land from farmers and grow <br>crops on the land-owners' behalf. ***Ed: Just imagine: you <br>
freight your veges on your own rail network, to your own <br>supermarkets, for customers living in your subdivisions <br>along your own railway lines. Grand visions and business</div>
<div>ecosystems are what Japan's railway operators and other</div>
<div>conglomerates are all about -- and the result is </div>
<div>cost-effective transport, housing, and hopefully, food.** </div>
<div>(Source: TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Aug 13, 2011)</div>
<p><a href="http://e.nikkei.com/e/ac/tnks/Nni20110812D1208A05.htm">http://e.nikkei.com/e/ac/tnks/Nni20110812D1208A05.htm</a></p>
<p>-> New legislation on alternative power by September</p>
<div>The Diet is working on new legislation, called the feed-in <br>tariff law, which will force power utilities to purchase <br>power from outside vendors. The new law has gained <br>significant momentum since the Fukushima nuclear power <br>
plant disaster, and is predicted to be the catalyst for a <br>rapid increase in solar and wind power installations over <br>the coming decade. The bill aims for alternative energy to <br>supply 20% of the nation's energy needs by the early <br>
2020's, up from just 9% now. The cost of implementing the <br>bill will be significant, with necessary upgrades to the <br>national grid alone expected to cost around ¥2trn. </div>
<div>(Source: TT commentary from <a href="http://wsj.com">wsj.com</a>, Aug 13, 2011)</div>
<p><a href="http://on.wsj.com/nU2Fjq">http://on.wsj.com/nU2Fjq</a></p>
<p><br>NOTE: Broken links<br>Many online news sources remove their articles after just a<br>few days of posting them, thus breaking our links -- we<br>apologize for the inconvenience.</p>
<p>***------------------------****-------------------------***</p>
<p>+++ CANDIDATE ROUND UP/VACANCIES</p>
<p>=> BiOS, a Division of the LINC Media group, is actively<br>marketing the following positions for customers setting up<br>or expanding in Japan, as well as other employers of<br>bilinguals.</p>
<p>** HIGHLIGHTED POSITION</p>
<p>BiOS is urgently looking for a Field Engineer with <br>experience in providing level 2 user support and level 3 <br>system administration support for our office in the <br>Minato-ku area. The candidate will be responsible for <br>
providing IT infrastructure support to clients (end-user <br>support, network/server administration, and etc) as well as<br>participating in infrastructure related projects, such as <br>office expansion, data center support, and etc. You will <br>
also be responsible for working closely with an internal IT<br>manager and on-site leaders to review a project scope to <br>ensure that services are provided according to their <br>schedule.</p>
<p>Due to the technical nature and demanding work environment,<br>this position is suited for someone with solid experience <br>in providing Windows-based user support services. In <br>addition, since this role requires direct negotiations with<br>
both Japanese and international clients, business-level <br>English and fluent-level Japanese communication skills are <br>required.</p>
<p>Remuneration is JPY4m – JPY5m depending on your experience <br>and skill level.</p>
<p>** POSITIONS VACANT</p>
<p>- MAC Coordinator, global ibank, JPY4M – JPY5M<br>- Data Center Engr, IT services provider, JPY3.5M – JPY4M<br>- Sales Team Account Manager, BiOS, JPY4M – JPY5M<br>- Vendor Mgr/Contract Admin, global bank, JPY8M – JPY11M<br>
- Helpdesk Engr, global medical equip co, JPY4M – JPY5.5M</p>
<p>Interested individuals may e-mail resumes to:<br><a href="mailto:tomohiro.kimura@biosjp.com">tomohiro.kimura@biosjp.com</a></p>
<p>** BiOS Job Mail</p>
<p>Every 2 weeks BiOS sends out a regular communication to its<br>job seeking candidates, called BiOS Job Mail. Every edition<br>carries a list of BiOS's current and most up-to-date<br>vacancies, with each entry featuring a short job<br>
description and a direct link to the main entry on the BiOS<br>home page. Regardless of whether you are unemployed and<br>searching, thinking about a career change, or just curious<br>to know if there is something out there that might suit you<br>
better, the BiOS Job Mail newsletter is an easy and<br>convenient way for you to stay informed. If you would like<br>to register for the BiOS Job Mail, or to find out more,<br>please email <a href="mailto:kenji.sakota@biosjp.com">kenji.sakota@biosjp.com</a>.</p>
<p>Interested individuals may e-mail resumes to:<br><a href="mailto:tomohiro.kimura@biosjp.com">tomohiro.kimura@biosjp.com</a></p>
<p>-----------------------------------------------------------</p>
<p>***------------------------****-------------------------***</p>
<p>+++ UPCOMING EVENTS/ANNOUNCEMENTS</p>
<p>--------------- Start a Company in Japan ------------------</p>
<p>Entrepreneur's Handbook Seminar, 10th of September, 2011</p>
<p>If you have been considering setting up your own company,<br>find out what it takes to make it successful. Terrie Lloyd,<br>founder of over 17 start-up companies in Japan, will be<br>giving an English-language seminar and Q and A on<br>
starting up a company in Japan.</p>
<p>This is an ideal opportunity to find out what is involved,<br>and to ask specific questions that are not normally<br>answered in business books. All materials are in English<br>and are Japan-focused.</p>
<p>For more details:<br><a href="http://www.japaninc.com/entrepreneur_handbook_seminar">http://www.japaninc.com/entrepreneur_handbook_seminar</a><br>-----------------------------------------------------------</p>
<p>--------------- Mate Rock Charity Concert -----------------</p>
<p>Australian Rock Legends come together to help Tohoku</p>
<p>Featuring: Jimmy Barnes, the Angels, & Kevin Bloody Wilson!<br>Hakuba 47, 10th of September, 2011.</p>
<p>Mate Rock is a musical extravaganza to be held in Hakuba, a<br>beautiful mountain village in the Japan Alps, about 3 hours<br>from Tokyo. The concert will run from noon to early evening<br>at the base of the 47 Ski Resort. Bring a rug and a picnic<br>
and enjoy a day of classic Australian rock in a spectacular<br>natural setting.</p>
<p>All proceeds of the concert will go to charities in Tohoku<br>providing scholarships for children to study overseas.</p>
<p>For information and bookings; <a href="http://www.materock.com/">www.materock.com</a><br>-----------------------------------------------------------</p>
<p>***------------------------****-------------------------***</p>
<p>+++ CORRECTIONS/FEEDBACK</p>
<p>In this section we run comments and corrections submitted<br>by readers. We encourage you to spot our mistakes and<br>amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.</p>
<p>*** In TT625 we considered why Hitachi might be merging <br>with MHI, as reported by the Nikkei. Our reader points out<br>that it may all just be speculation.</p>
<p>=> Our reader says:</p>
<p>I'm not sure Hitachi's denial has anything to do with being<br>"proud and feudalistic." I used to be an exec at another <br>major Japanese company and found that Nikkei routinely <br>published stories that I knew were false. Some of these, <br>
such as about new products or technologies we were <br>supposedly working on, were quite detailed. But wrong. <br>Nikkei is known for running "speculative" stories, shots in<br>the dark based on a whiff of rumor.</p>
<p>I can't be certain that's what happened in this case, so<br>your assessment might still be right. But without more <br>inside knowledge, and given that it was a juicy story like <br>a merger, I'd give it at least 50-50 that Nikkei was just <br>
guessing. </p>
<p>*** Our response:</p>
<p>Thanks for the feedback. Yes, we agree about the Nikkei. <br>However, in this case Reuters had an interview later with <br>Hitachi and it seems that there really was a merger on the <br>table. That’s why Reuters could publish an article saying <br>
the deal might be derailed.</p>
<p>Our point about Hitachi’s denial is that it was so terse <br>that it virtually serves no purpose. A proper response <br>would have to been to enlarge a bit on why the two <br>companies were talking, and to offer a more complete <br>
statement at a later date. We found ourselves thinking, <br>“These guys are giving an almost identical reaction to <br>TEPCO and Toyota when caught in a crisis.” </p>
<p>Absolutely no clue of how to manage the press, and this is <br>typically because they’re not used to being questioned <br>(i.e., they’re proud and feudalistic). These firms live in <br>a connected world now, where speculation becomes fact. <br>
They need to learn to bend and interact or they will have <br>increasing problems like this merger leak.</p>
<p>*** Reader's follow-up:</p>
<div>Thanks for the reply, and I take your point. They were <br>certainly clueless about dealing with the press. Apropos <br>of "proud and feudalistic," though, a different take still <br>may be possible: as one of my American colleagues explained<br>
top management thinking to me soon after I joined that <br>major Japanese company I mentioned. She said, "Outsiders </div>
<div>think they're running the most internationalized Japanese </div>
<div>company. But actually they behave like they're running a </div>
<div>family-owned furniture company in Minnesota that's grown </div>
<div>too big too fast." Turns out she was right in more ways </div>
<div>than one.</div>
<p>***********************************************************<br>END</p>
<p>SUBSCRIBERS: 8,930 members as of Aug 14, 2011<br>(We purge our list regularly.)</p>
<p>+++ ABOUT US</p>
<p>STAFF<br>Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)</p>
<p>HELP: E-mail <a href="mailto:Terrie-request@mailman.japaninc.com">Terrie-request@mailman.japaninc.com</a><br>with the word 'help' in the subject or body (don't include<br>the quotes), and you will get back a message with<br>
instructions.</p>
<p>FEEDBACK<br>Send letters (Feedback, Inquiries & Information) to the<br>editor to <a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>.</p>
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