Time for Japan to kill off zombie company Sharp — William Pesek |
- Time for Japan to kill off zombie company Sharp — William Pesek
- Football star Beckham made ‘pretty significant’ impact on MLS
- Burger fast gaining popularity in baguette-crazy France
- A pass for all major US banks in first phase of stress tests
- As winter storm hits US, plane skids off New York runway
- Make an ice cream sandwich in three easy steps (VIDEO)
| Time for Japan to kill off zombie company Sharp — William Pesek Posted: 05 Mar 2015 05:00 PM PST MARCH 6 — Sorry, but can anyone provide a good reason why Sharp should still be in business? As Japan Inc. icons go, the beleaguered tech giant counts as borderline royalty. Founded in 1912, the year Emperor Meiji, whose reforms transformed Japan from feudal state to capitalist power, died, Sharp was among the core engines of the nation's global ambitions. In 1964, Japanese reveled in Sharp's introduction of the first transistor calculator just in time for the Tokyo Olympics — the nation's post-World War II return to the global stage. In 1997, the Osaka-based star gave the world the first commercial camera phone, inspiring Steve Jobs in California. QuickTakeAbenomics Now, it's hard to figure out a business in which Sharp can really excel. In 2012, when the company should've been celebrating its 100th anniversary, executives were releasing the company's worst financial results ever (nearly US$5 billion [RM18.3 billion] of losses). Despite a slew of cosmetic tweaks since then — raising equity from the public, selling off stakes in businesses and, in June 2013, naming a new president, Kozo Takahashi — the bleeding has not stopped. Sharp is forecasting a US$251 million loss in the 12 months ending March as its Aquos TVs struggle to compete against China, Korea and Japanese rivals like Sony. Display panels show little promise given this voracious competition. Sharp says it's banking on selling smartphone panels to China's handset makers. Yet mainland suppliers can make high-quality ones at lower prices. Yesterday, the company denied reports it's selling off its loss-making solar panel business. That begs the question why not. As I say, why is Sharp still with us? Banks bailed out the company in 2012, only to lose US$8 billion over the next two years. In a more conventional market economy, the company would've gone bust by now — or at least been acquired. "Sharp's core business is as bad as it could get," analyst Atul Goyal of Jefferies Group told Bloomberg News. "The company should not be alive. They can't invest, they can't fight." Sooner or later, Japan has got to get serious about letting zombie companies like Sharp die. That would be terrible news for its 50,000 workers — and a political headache for Prime Minister Shinzo Abe, who is already struggling to halt declines in Japanese wages. But Sharp's woes epitomise much of what's still wrong with Japanese business culture. It might be worth more as a sacrificial lamb than as a perpetually struggling enterprise. Since its heyday, Sharp has over-expanded, lost track of core competencies and grown complacent thanks to ready support from banks. While executives get most of the blame, Tokyo deserves some, too. In 2009, the Ministry of Economy, Trade and Industry of Japan, or METI, helped set up the Innovation Network Corp. of Japan to boost the nation's entrepreneurial capital and competitiveness. Instead, the partly taxpayer-funded entity largely became a bailout mechanism for failed projects. INCJ conjured up Japan Display out of assets from other prominent names — Sony, Toshiba and Hitachi — and then steered lots of the iPhone business to the new company. That took food right off Sharp's plate. The company suddenly faced yet another competitor, one with ready cash from INCJ's investment and a 2014 initial public offering. Sharp has remained alive mostly because of the cozy web of cross-shareholdings that bind the company and its creditors. The company's management declared this week that it was considering "drastic reform," including cutting executive pay by as much as 20 per cent (a tired Japan Inc. maneuver that makes great headlines, but changes nothing). In fact, the strategy looks to be a familiar one — hitting up the bankers again. Takahashi is reportedly chatting with Mitsubishi UFJ Financial and Mizuho Financial. Options may include a debt-for- equity swap. Sharp has some serious leverage; its bankers are stuck with more than US$3 billion of Sharp debt. Takahashi's opening line to his financiers could be: If you cut us off, you'll get hurt, too. Where have we heard this before? Tokyo has found itself in this same predicament countless times over the last two decades. Continuing to prop up complacent companies takes the onus off executives to create new products and wealth that generate jobs and higher incomes. It deadens the creative destruction that chastens stagnant industries — like Japanese tech — and makes way for innovative and new ones. It's time to break this cycle. Sharp is a great place to start. * This is the personal opinion of the columnist.  |
| Football star Beckham made ‘pretty significant’ impact on MLS Posted: 05 Mar 2015 04:58 PM PST
Though Beckham's time in the US began unpromisingly as he was sidelined by injury and then skipped several Galaxy games to play on loan with AC Milan in Italy, his eventual influence on the sport extended well beyond his performances on the field. The former Manchester United player, who became football's first household name in the United States since Pele, was instrumental in helping popularise the game in a country where it traditionally struggled for mainstream attention. Blessed with good looks, a celebrity wife and a talent for self-promotion, Beckham appeared on popular late-night talk shows, in the pages of glossy magazines and broke into sports media empires normally the preserve of NFL and NBA stars. "Beckham was brought in to bring sex appeal to a Los Angeles team sorely in need of a star," Daniel Durbin, director of the USC Annenberg Institute of Sports, Media and Society, told Reuters. "As the team representing Hollywood, the Galaxy now had the biggest celebrity in soccer and someone who regularly appeared on "sexiest man alive" lists and who was married to one of the Spice Girls. You can't get much more Hollywood than that. "Beckham was a perfect match for that environment. It turned out even better than expected with LA having a very strong team and MLS starting to pick up a fanatical fan base, especially in the Northwest and particularly in Portland, Oregon." 'Greater star power' Since 2006, MLS has expanded from 12 teams to 20 and average attendance grew by over 3,000 during the Beckham era with clubs investing in purpose-built soccer stadiums rather than playing, as Pele did, in NFL arenas often with artificial turf. Average attendance at MLS matches often exceeds that in the National Basketball Association and National Hockey League. "Beckham helped bring a higher level of visibility and much greater star power to the MLS," said Durbin. "He couldn't single-handedly change the Galaxy, or the whole of MLS for that matter, into Manchester United or FC Barcelona. "But he could and did bring international football celebrity to the MLS and that was a tremendous boost for the league. The higher visibility also helped create a stage for football to become more popular across the US. "While football would likely have taken off in Portland, for instance, without Beckham, he certainly helped raise the level of interest, conversation and consciousness regarding the league. He had a pretty significant impact." Beckham's American adventure began in 2007 when he was formally introduced as a Galaxy player at their home stadium and it ended in 2012 after he helped his team to a second successive MLS Cup. "The measurement is pretty clear from 2007 on ― how the league has grown, with the number of franchises, how attendance has grown, how the league has been recognised around the world," Galaxy coach Bruce Arena said of Beckham's impact on MLS. "Locally the Galaxy have grown our brand, we have won championships, what more can you say? Those are pretty impressive credentials for anyone." Former US football international Landon Donovan, who played alongside Beckham with the Galaxy, experienced the "Beckham effect" more than most. "He greatly helped my career and the success of our team but, on a bigger scale, it's what he's meant for the game of football generally ... and specifically what he's meant for the game of football here in America," Donovan told Reuters. "Before David came and someone walked down the street and you said, 'I play for LA Galaxy', they would say, 'Who's that?' After David left, if you say you play for LA Galaxy, people reply, 'That's amazing.' "The level of awareness he has brought has been priceless for us." ― Reuters |
| Burger fast gaining popularity in baguette-crazy France Posted: 05 Mar 2015 04:52 PM PST
The "jambon beurre" (ham and butter), a staple of the French diet for centuries, is fast losing ground in the fast-food market to the burger, according to the report by food marketing group Gira Conseil. The ham sandwich is still selling like hot cakes — with 1.28 billion guzzled last year. But the burger is catching up, with 1.07 billion eaten last year, a rise of 10 per cent compared to the previous year. And if the current trend continues, it will soon be the most popular sandwich in France, as consumption of the "jambon beurre" was up only three per cent this year. The burger is now "one meal in four" in France's fast-food restaurant landscape, said Gira Conseil. "Burger-mania is far from being over in France," added Gira Conseil boss Bernard Boutboul. US fast-food chain McDonald's has tasted significant commercial success in France and rival Burger King has begun to open a few restaurants in Paris. Judging by the long queues outside one of the Burger King restaurants at the busy Saint Lazare station in Paris, the French appetite for burgers remains unsatisfied. With inflation low in France at the moment, the price of the ham sandwich was relatively stable last year, rising by a mere 1.05 per cent to an average of €2.74 (RM11). Unsurprisingly, the famously pricey French capital is the most expensive place to munch a ham sandwich, with the average baguette weighing in at 3.18 euros. The ports of Sete in the south of France and Dieppe in the north are the cheapest, at an average of €2.36. The French are also avid gobblers of pizza, with 809 million consumed last year (up 1.20 per cent), the survey revealed. "France is one of the two biggest pizza countries in the world," said Boutboul — just behind the United States and way ahead of Italy. — AFP |
| A pass for all major US banks in first phase of stress tests Posted: 05 Mar 2015 04:50 PM PST
But the three leading investment banks Goldman Sachs, JPMorgan Chase and Morgan Stanley were among the worst performers, mainly because of their greater exposures to capital markets. In tests of their strength to withstand a severe economic crisis — one worse than that of 2008 — all the banks proved capable of maintaining more than the minimum 5.0 per cent level of core capital. At that level, the Fed believes that the banks will not weigh the economy down and will be able to continue supporting economic activity — which was not the case during the crisis. But the tests showed the investment banks with the largest exposure to capital markets came out among the weakest: Goldman's Tier 1 capital ratio fell to 6.3 per cent, JPMorgan 6.5 per cent, and Morgan Stanley 6.2 per cent. The worst performer, as in last year's stress tests, was Zions Bancorp of Salt Lake City, which barely topped the minimum with a core capital ratio of 5.1 per cent. Also coming in low in the severe-crisis scenario was BBVA Compass Bancshares, at 6.3 per cent. Industry growing stronger But as a group the banks were stronger than in the 2014 tests, and it was the first time that no bank had fallen under the 5.0 per cent level since the tests began in 2009. Their average actual Tier 1 capital ratio going into the test was 11.9 per cent, up from 11.5 per cent a year ago. In the test the group average fell to 8.2 per cent, compared with 7.6 per cent last year. "The largest US-based bank holding companies continue to build their capital levels and to strengthen their ability to lend to households and businesses during a period marked by severe recession and financial market volatility," the Fed said. The tests, instituted in the wake of the 2008 crisis which bared extreme vulnerabilities in the banking system, sought to determine if individual banks and the system as a whole could weather a prolonged recession in which the economy contracts 4.5 per cent in one year and the unemployment rate shoots up four percentage points. That scenario wiped out $490 billion worth of bank assets, close to the amount in last year's tests, but overall the banks proved they could stand the test. The tests added this year the impact of a series of corporate defaults to which the investment banks would be most vulnerable. Goldman barely topped another key measure of strength, the total risk-based capital ratio. At the end of the test it had 8.1 per cent, just above the minimum 8.0 per cent threshold. The Fed made no comment on individual banks, but noted the steady improvement of the industry overall since the crisis. "Higher capital levels at large banks increase the resiliency of our financial system," Federal Reserve Governor Daniel Tarullo said. "Our supervisory stress tests are designed to ensure that these banks have enough capital that they could continue to lend to American businesses and households even in a severe economic downturn." The tests form the basis of the Federal Reserve's review of banks' capital plans, crucially whether they can distribute benefits to shareholders via dividends and share buybacks that effectively reduce their capital base. Those judgements will come from the Fed next week. Frank Keating, president of the American Bankers Association, said that with total industry capital of US$1.7 trillion (RM6.22t), the tests show that banks "are well positioned to continue serving as a critical driver of our economic growth going forward." — AFP |
| As winter storm hits US, plane skids off New York runway Posted: 05 Mar 2015 04:49 PM PST
Heavy snow was falling as Delta flight 1086 from Atlanta careered off the runway, plowed up an embankment and demolished a fence after its late morning landing. New York firefighters said 24 people suffered non-life-threatening injuries, including three who were transported from the scene. The McDonnell Douglas MD-88 was carrying 127 passengers and five crew. Video footage showed shaken passengers climbing gingerly out of the plane through an exit over a wing and trudging through thick snow. The plane's nose jutted through the fence, suspended above the icy East River. Passengers recounted panic as the plane failed to break after landing. "We knew something was wrong because you didn't feel the wheels take and we started to skid," Jared Faellaci told CNN. "I'm definitely shaken up, I cried, shed some tears, and obviously I'm just reflective and grateful." Another passenger, Jaime Primak, tweeted: "We just crash landed at LGA. I'm terrified. Please," she wrote. She added later: "We have all been evacuated. Everyone is safe. Thank you for your prayers. God is good." It was the most dramatic incident on a day in which a huge winter storm forced thousands of flight cancellations and disrupted life across a broad swath of the United States. In Washington DC, government workers were ordered to stay home, schools were closed, and museums shuttered for the day as icy rain turned to heavy snow. Baltimore, Philadelphia and New York were expected to get as much as eight inches of snow, with temperatures dipping well below average in much of the region. Airports experienced travel chaos, with more than 4,500 flights canceled by yesterday afternoon, spelling travel misery for many. Poor visibility Forecasters had warned of low visibility in New York, and some 40 per cent of flights had been canceled at La Guardia before the accident, according to flightaware.com. New York Port Authority executive director Patrick Foye did not say what caused the accident, only that the runway was recently cleared. "That runway had been plowed literally minutes before, and other pilots had reported good breaking action," he told reporters. Foye said the plane skidded more than 1,400m down the runway and that the aircraft's emergency chutes did not deploy after it hit the embankment. But he assured there was no risk of it coming into contact with water. "The plane did not make contact with the water, happily that was never a risk today," he said. Delta, which said that passengers were ferried to the terminal on buses afterwards, said in a statement: "Our priority is ensuring our customers and crew members are safe." The airline—which received the plane new in 1987 -- vowed to "work with all authorities and stakeholders to look into what happened in this incident." There was a "minor fuel spill" after the crash that has been contained, according to Foye. Among the passengers was Larry Donnell, a player with the New York Giants NFL team. "We were all shocked and alarmed when the plane started to skid, but most importantly, as far as I know, all of the passengers and flight crew were able to exit the plane safely," he said in a statement. State of emergency The National Weather Service said 65 million people were under a winter storm warning, and other another 29 million were under a winter weather advisory. In Kentucky, Governor Steve Beshear declared a state of emergency for the state, where some cities were pounded with 20 inches of snow. The southern United States was not spared, with Texas, Oklahoma and New Mexico all facing weather warnings. Forecasters said the storm's scope was not uncommon. "For this time of year, to be impacting people in the relative deep south, it's a fairly unusual event," NWS meteorologist Bruce Terry told AFP. He said southern states, not accustomed to ice and snow conditions, might not be as prepared as some of winter-hardened northerners. Washington and Baltimore were expecting up to eight inches of snow, with temperatures in the capital dropping to -12º Celsius by evening. "Significant amounts of snow are forecast that will make travel dangerous. Only travel in an emergency," the National Oceanic and Atmospheric Administration cautioned for Washington and Baltimore. The storm was expected to last until early evening, Terry said, but warned cold temperatures were likely to remain. — AFP |
| Make an ice cream sandwich in three easy steps (VIDEO) Posted: 05 Mar 2015 04:45 PM PST SAN DIEGO, March 6 — Craving for a delicious ice cream sandwich? Here's how to make one in three easy steps.
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