JPRS ID: 9652 JAPAN REPORT

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• Collection: JPRS
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• Document Page Count: 94
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• Sequence Number: 15
• Content Type: REPORTS

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JPRS L/9652
~ 8 April 1981
- Ja an R~ ~~t -
p ~ -
CFOUO 21 /81)
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- JPR~ L/9652
8 Apri1 19~1 ~
. .!APAN REPORT
(FOUO 21/81)
CONTENT~
POLITICAL AND SOCIOLOGICAL
Exgerts Discuss Nationa.l Security Requirements, Options
(Jun Eto, et al; NIHGN KEIZAI SHIMBUN, 1 Jan 81) ..,,...oo, 1
' ECONOMIC
Def ense Industry Assumes Cautious Stand, Confident in More
Spending
(Yoichi ?rlotohasi; JAPAN ECONOMIC JOURi'1A,L,
10 Mar 81) o.a ...............o..ooooo0000000000000000oooooa 12
DevelopmenCs in Internationa.l Sma.ll Car War Analyzed
(YOMIURI SHIMBUN, 31 Jan 81) ,,..,ooo,,,,,,,,,,,,,,,o,,.o,0 14
Articles Review Stock Market Perfo~a.nces
(SHIJKAN SHINCHO, 22 Jan $1; KEIZAI TENBO, 1 Feb,
= 1 Jan 81) oo.oooo .............oo.....o..ooooo00000000000.00 18
Robot Manufacturer Fujitsu Fanuc , -
Defense-Relat~~? Stocks ~ -
High Technolog~ Stocks
- SCI~NCE AND TEC~iNOLOGY -
- Hitachi To Develop Intelligent Robots
; (JA.PAN ECONOMIC JOURNAL, 10 Mar 81) ......,o,,,,,,,oooa,o � 37
_ USSR Pxflposes Technological Cooperation With Japan's Robot -
Manufacturer
(NIKKEI SANGYO SHIMBUN, 9 Mar 81) ,o,,,,oo.o,o,,,,,o � o0000 38
Current Resear_ch in Nuclear Fusion Outlined
_ (NIKti~I SANGYO SHIMBUN, 3-9, 13-14, 16, 20-23 Jan 81) ,Q,,, 40
~
- a - [TII - ASIA - 111 FOUO]
- r.no nr.r.T~r ~ t i Tcr, n*rt v
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- New Injection Device Raises Engine Fuel Eff iciency Teri Percent -
(JAPAN ECONOMIC JOURNt~L, 10 Mar 81) o..,...,,,,oo,o,,.,,,,, 72
Developments in Aircraxt Industry Reported
(NIKKAN KOGYO SHIMBUN, ;.7, 18 Dec $0) .....a,o.�o,o�oao., ?3
Continuerl Government Subsidy Asked -
Company To Be Abolished in 1982 ~
_ New Super Bullet Trai:~ To Be ~eveloped by JNR -
( JAPAN E CONOMC C JOURNAL, 10 M~ r 81) , o o, o,,,,, o 0 0� o� o,,,, 7% -
~ Energy Ef.Eicient Ships Said Goal of ShipUixilding Industry -
(NIKKAN KOGYO SHIMBUN, 18-20 Feb 81) ,,,,,AO,o,o.o,a..o,,.0 78 -
Mitsubishi Starts Using 3 Ki3.owatt Carbon Dio:tide Laser Device
(JAPAN ECONOMIC JOURNAL, 10 Ma.r 81) oo�o,o,oo,o,ooo,oo,a� 85 -
. Power Microscope Detects Metal Scratches
- (JAPAN ECONOMIC JOURNAL, 10 Ma.r 81) ,ooo,o,,,,o,,,,a�o�o. 86
Low-Cost Direct Reduction Stee1 Technology Pro~~es Good in
- Deomonstration
(JAPAN ECONOMIC JOURNAL, 10 Ma.r 81) ,,,,ooo,,..,oo,.,,,.... 87
Photomultiplier Tube With Biggest Diameter Produced _
(JAPAN ECONOMIC JOURNAL, 10 Ma.r 81) oo�a.,,,.o,o...~...... 88
New Engineering Ceramics Resist Temperatur e Over 1,200 Degrees -
(JAPAN ECONOt4IC JOURNAL, 10 Ma.r 81) .............o,o,oo,... 89
Briefs
Interferon Ca.pacity Raised 90
- b - `
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J~ ~
POLITICAL AND SOCIOLOGICAL
~
.
~ EXPERTS DISCU:.'S NATIONAL SECURITY kEQUIRIIKENTS, OPTIONS "
Tokyo NIHON K~IZAI SHIMBUN in Japanese 1 Jan 81 pp 32-33
' [Symposium Report" "Comprehensive National Security and Japan's Option"; Partici-
pants: Jun Eto, professor at Tokyo Institute of Technology; Kar~ Moroi, president -
of Chichibu Cement Co., Ltd.; Nobuhiko Ushiba, former roving ambassador]
[Text] "Afghanistan," "Iran-Iraq War," "Poland,"--while events that indicate
~ changes in the current trends of the international situation are taking place, the
turbulent 1980's have ent~red their senond~year. The government has established
the "Comprehensive National Security Cabinet Council," and there is an increasing
movement to understand, from many angles, the national security problem. On the
' in~reasing].y important issue of "Japan's national security," Jun Eto, a professor -
- at Tokyo Institute of Technology= Kan Moroi, president of Chichibu Cement Co., Ltd., _
and Nobuhiko Ushiba, former roving ambassador, were asked to participate ~n a
symposium. Also, Ganri Yamashita, former airector ~eneral of the Defense Agency,
was asked for his comments from a political standpoint. (Moderators were Tetsuo
Ota, chief of the economics department of the Tokyo main office, and Makoto Fuka.gawa,
chief of the political department.) _
Obtain a Consensus
Reporter: The concept of "national security" should probably have been considered ~ -
to he inherently comprehensive in nature, but heretofore it was interpreted with
- great emphasis on the military aspects. I believe that it was only 2 or 3 years
1 ago that the argument was made that it was more appropriate to apply the term "com-
prehensive national security," and to look at the problem systematically. What is
your ass~ssment of such changes? First of all, I would like to ask what the problem -
areas would be, if any. -
Ushiba~ I agree with the viewpoint that national security should be comprehensive -
in scope, but I believe that its core would be the present defense power. In Japan's
caG~, the term "comprehensive" began to be used: intensively because of circumstances ~
which make it difficult, from a defense standpoint, to express matters freely 4r *
openl,y. There are limitations in defense, no matter how much effort is put in,
and the excuse that there was a need to ~hare international responsibilities and
_ tasks was used extensively. I also think that the term "comprehensive national
security" is being used frequently in Japan because if defense power were to be ~
publicly emphasized, there would be real problems in trying to accomplish anything
and deve].op a national consensus.
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OF course, comprehensive national security is fine, but Japar. is weakest in its
defense capability. Also, Japan can never become self-sufficient in food or energy
~ supplies. Therefore, if you were to ask if~Japan~s national security would increase
greatty by using the term "comprehensive national security," I would say not
necessarily so. For the above reasons, I believe that the concept of compreherisive
national security has its limitations.
Morai: The Japanese people ti3ve generally given up hope for a high growth rate and, ~
. although dissatisfied, have re:>igned themselves to a low growth rate. But they are
- beginning to have doubts, when they look into the future, as to whether the present =
"so-so situatlon" can be main'ta~ned. :
Discussion ni comprehensive national security became widespread because the United
Sta~es is no longer absolutely super~.or to the USSR in milit-ary balance, and Japari -
has trouble procuring natural resources, energy sources, and foodstuffs whenever
disturbances arise in various parts of the world. -
I believe that problem are-ls should be pointed out, but finding concrete solutions
is extremely difficult. Under the present circumstances, it is hard to predict
whether a natianaZ consensus can be tightly firmed up on the various specific -
propasals for solutions.
Eto: The fact that the govarnment has begun to take the lead in thinking about '
national security shows an earnestress, but I think the government showed it was ,
_ not serious when it attached the modifier "comprehensive." National security is _
always regarded as being comprehensive in scope. If national security cannot be -
discussed without the flossy concealment ~f the term "comprehensive," then the
government is not earnest. Therefore T feel that the government has begun to get
serious, but that it still is not truly zarnest.
I say that it is not ~arnest because, as you two have indicated, the problem of ~
national security must be consider~c~ aith the defense problem as the nucleus. The . -
procurement of natural resources ~:ight be stabilized, but if maritime transpor- '
tatio*~ routes were cut off, there would be terrible consequences. How to map out
the techniques of survival is the problem we face in national security.
Survival might mean !-he possi~ility of facing starvation or (experiencing the in-
convenience of not being able to make th~ngs], but ultimately, national security
� must be prepared for the worst situation in order to prevent our lives and property
from being directly threatened. If not, security "exists only in form but not in _
spirit," and therefore the military problem must be taken up. At least, it must be -
_ treated as the central issue, a_nd other related problems, which are to be expected, -
must also be fully considered. If in the future the concept of �omprehensive
national se~~rity is actually to be pursued, then its substance must be carried -
out accord3ngly. -
- Reporter: How should the subst-ance be carried out concretely?
~ F.to: I believe th~r rhere are too many items which are d~scussed only among
, exper_ts. It ~.s said that if Japan is at*acked from somewhere, the United States
- wi].1 come to its aid. However, no one has taken th.~: trouble ~o think tlirough com-
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prehensively how many weeks Japan would have to hold out, and to explain it simply
to everyone. There has been no exglanation as to the logistics (transportation
and supply system) of how many thousands or tens of thousands of Aznerican ~roops
would take what route and what actions to come to the rescue. In fact, even the
Amer~cans probably have no such plans.
The purchase by the Selr-Defense Forces (SDF) of new aircraft such as C-130's and
F-15's might ad3ust the trade imbalance between Japan and the United States, but
as to how and when they are to be used, che only e:cplanations given have been in
~ the Diet interpellations. Na one has expli^itly stated whether or not such Pxplana-
tions are forbidden. What is the actual situati~n? Perhaps the situation might
be terrifying; if so, it should be noted as such. Otherwise, I think we cannot
make any headway.
Ushiba: There is a feeling that Japan would draw worldwide symgathy if it preached
_ comprehensive national secur~ty. I also believe that there are aggressive views
that if Japan increased its defensive capability, it wauld be easier for Japan to
obtain oil, but this is not the actu~l case. Since comprehensive national security
- will further increase its responsibilitiess Japan's position will not get better
_ simply because Japan advocates it. There is one factor which must not be overlook-
ed. That is, even if Japan increases its defense power, no other country will give
_ special consideration to Japan's oil and fc~od supplies. I think that there is a
line of thought that Japan can shrewdly evade its responsibilities [by preaching
coinprehensive national security]. Such thinking is the frivolous aspect that has
been pointed out earlier.
Moroi: A segment of financial circles is voicing adventu.rous views such as starting -
a draft system, installing nuclear ~:~eapons, increasing military armament at a
spectacular pace, dispatching troops overseas, etc. However, the gensral vi~w is
to maintain the status quo. I feel that the prevailing viewpoint is that it would
_ be sufficient to maintain, by spending about 1 percent of the national income, the
power to repel small-scale, surprise invasions and to cope with internal rebellions.
Underlying this viewpoint are doubts that the United States would really defend
Japan, or whether it would succeed even if it tried. Since there is no definite
~ answer, I think some believe that half-hearted efforts would nut have much effect
and have ac~ually given up hope,
Eto: I think I understaitd the situation that Mr Moroi just described. However, I
believe that~ some claim they are satisfied with the present situation bec3use they
~ do not truly understand it. It might be presumptuou~ for me to say this, but I ~
= think that it behooves financial circles to do more study and research on the exist-
- ing situation. Some have advocated nuclear armament. When Japan-U.S. relations ~
are considered, such advocacy of nuclear armament means bringing those relations
to their ultimate end. Have the advocators considered this development when t~oicing
Gheir views?
I bel3eve that the maintenance and development of Japan--U.S. relatio:.s constitute
- the basic conditions for the survival and prc?sperity of Jap.sn. T~ suggest an alter- _
native such as nuclear armament is too radical a turnabout. I do feel that the '
doubt as to whether the United States would defend Japan would only beeome stronger
in the future. Tt;erefore, the extent of Japan's exposure to internationa~ conflicts
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would be heightened at an accelerated pace hereafter. On such occasions, consider-
ation must be given to methods of cooperation for maintaining Japan-U.S. relations
and for developing it to cope with new s~tuations. That should be the starting
point of the basic thinking on this matter. -
Strengthen Japan-U.S. Relations
Reporter: Tn the 1980's, particularly with the birth of the Reagan administration;
there might be a realighment of interna~ional security alliances, with the United
~ States as the nucleus. If .Tapan-U.S. relations are to be restructured, what direc- ~
tion should this take? ,
Ushiba: Basically, the Japan-U.S. Security Treaty is a deterrent factor and was -
not drafted on the assumption of conducting warfare. It is true that the deterrent
- power is weakening, but the issue from the beginning has not been one of whether
the United States would or would not defend Japan. The problem facing the Japan-U.S.
Security Treatq is whether or not the deterrent power would be effect~ve. If ~
� deterrent power were not the ess~nce of the Security Treaty, why has the SDF con- '
tinu~d, right up until the present, a readiness state in which all the ammun:ition
~ would be used up in a single day's battle? This probably indicates a belief that
� war would not R~~ur. It was believed that the deterrent power was effective. Thus, i
to raise the question now as to whether or not the United States would protect !
- Japan is a ri~liculous mistake. The problem is what to do about the weakening deter-
rEnt power. ~ '
- A revision of the Security Treaty is politically impossible at this ti~ne. I think ~
that such discussions (Security Treaty revisions) might arise in the United States.
- However, such talks will not develop into a main trend. I do not think that there
~vould be many on the Japanese side who would favor such a move. Particularly at _
this time, when there has been a change of political regime in the United States,
_ Japan must be careful r_ot to n~ake any hasty proposals, since there might be dis- -
astrous results. '
Any realigrnment of alliances is a very serious matter. However, the United States !
is now concerned mainly with Eur;,,,e and does not think Japan would pose any problems.
Becatise of this U.S. attitude toward Japan, however, it would be e~roneous to
immediately conclude that the United States would withdraw troops from the Pacific
- area or that it has no interest in Japan. Personally, I think that Japan is over-
_ expo3ed in the United States. I think that there has been too much talk about
- Japan. 'i'?,e movie "Shogun," which was shown recently, drew fantastic interest. It '
is said that because of the movie, the sale of Japanese sake increased tremendously
there. The reason is that in the movie, everyone was drinking sake.... (laughter)
" At any rate, ~r would be better for Japan to be left alone. -
Wtiat Japan should ci~~ now is to tell the United States "what it wants the United
_ States to do" and "what Japan can do." If Japan simply waits, there is a possibility
that the ~U.S.] demands will ~--:tdually escalate--I think this is ~he present situ- -
ation. If ~there were to be realignment of the alliance, what could Japan request
from the United States? Ultimately, Japan could probably ask only for meaningful
- pri.or consultation before the United Stares made any decision. Although it is said ~
- that the United States has weakened, it is still the United States which has the
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power and the 3ecisive lever. Since Japan has been suppor ted by that till now, it
= has the one request for the United States "to hold fast to the lever." _
- However, unless the "perceptions" of both countries get closer, there will be n~
- communication. It could be said that relations 'uetween Europe and the Uni*_ed ;tates
are not good at present, but this is because the difference in their mutual strengths _
- ~~as narrowad, and since they are tackling the issue of dividing the tasks, many pro-
- blems are arising. Japan has not yet arrived at that stage, and so what it says has -
no significance. 0_ie step before that, I think, it is important to get a closer
_ look at the "perception" problem concerning basic concepts. I t??ink that is the
a most essential action for strengthening the alliance.
Eto: Starting the summer of the year before last, I~tayed for nearly a year in ~
- Washington, D.C., and during that period various preblems arose such as the Iranian
conflict, ttie Soviet invasiun of Afghanistan, etc. Looking at things fram Washing-
ton, I believe that the perception of the Japanese has begun to change somewhat
- from before. As an issue, national security has remained in a negative sense
~ throughout the postwar period in Japan, with the flossy concealment of the term _
~ "comprehensive natio?~a1 security." The fact that a discussion has arisen as to how
- Japan should internationalize is ir. itself an indication that Japan is ncs~, fully
participating in international matters. In economic activities, Japan is not only
_ "fully" participating but is 120 or even 15G percent active, and the role and weight
of Japan in tl:~ irLernational economy ~re cnmmonly perc~ived by the people to be for
their good.
However, when it comes to international politics, Japan's p~sition and role are not -
fu11y understood by the governm~nt, not to mention the man in the street. This
strange insensitivity cannot be blamed on the Japanese alone. This is partly the
fault of the postwar treatment by Allied countries. It might be the result of many
- years of inte~action. Therefore, the fundamental makeap of the country might have
to be realigned somewhat to conform to th.e present conditions.
In other words, it is extremely doubtful that the conscious awareness of the Japanese ~
l peopl.r_ can be changed without touching on this problem when the issue of the con-
stitution is taken up. I believe that the Japanese awareness will not change unless _
- the Diet cleacly recognizes that the SDF, which is labeled an administrative agency, -
is recognized as a truly military organization. _
In one's curriculum vitae in the United States, there is always a column called
~ military record. Would the outlook toward the world of a person who feels it only
- natural to fill in this column be the same as our worl.d views? When I filled in
the curriculum vitae upon employment by 1'rinceton University, T first realized that
~there was this difference between my awaxeness of the world and the attitude toward =
the world of my American friends.
~ The Japanese people live under the assumption that th~y are the same human beings
as those of other countries, but this :is not true. In a sense, they are Martians
livi.ng on earth, and the question is when the Martians can become earthlings or
whethEr they believe they can survive f~rever as Martians. I bel:ieve that the aban- ~
doned hope mentioned by Mr Moroi and the perception difference pointed out by Mr .
Ushiba are the result of this Martian perso,Zality. _
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Moroi: A certain section chief, who is one of the elites of a great enterprise and -
= not quite 40 years old, asked me recently, "Really, is a country worth ~efending _
- with your life?" Of course I think he was speaking paradoxically, but I was shocked -
= to be asked such a question. Because the Japanese suffered so much in the last war,
~ many in the populace oppose war at all costs, even if they have to surrender.
Therefore, it is vzry difficult to make the people understand ax~d to take the lead
in formulating a consensus, even with regard to the constitutional revisions.
It is inconceivable that Japan did not have a world strategy after the last war. _
For example, reliance on the Security Treaty is part of a world strategy. However, _
that was not clear-cut in any sense and was not approved by national consensus as
such. Now is the time for the entire nati~n to think about it so as to arrive at a
- national consensus and to make it apparent as being Japan's wor13 strategy. Unless
~his is done, Japan's action would not be understood by the outside world and Japan
might become isolated in the international environment. I belie~~e that it is
essential at this time to formiilate a dis~inct world str~tegy founded on national
consensus.
Consider Strategic Aid .
_ Reporter: The~e are discussions concerning the limitation o~ defense expenditures
to within 1 perc-~nt c~f the GNP (gross national product)....
Eto: We are taken in too much by such expres~ions. If it becomes obvious that the `
1 percent f~~ure must be exceeded to get things done properly, then it should be
exceeded. Therefore, I think that before discussing the 1 percent figure, one must
- decide what is to be done. To accompli.sh that, various necessary steps Tcust be taken.
_ If there are legal obstructions, then they should be corrected. Since Japan is a
sovereign nation, it can do that much, but the rest depends on U.S. ne~_errent pawer.
Before the Reagan administration's world strategy is firmed up, Japan should propose
that it will do what is necessary, e��er if indirectly, to strengttzen the deterrent
power. =
Moroi: Since t am not an expert, there are things I do not understand, but I
believe that there is a form of ~unsensus on the 1 percent figure is in itself
- signi.ficant. 'rherefore, I do not think we should destroy it. Although only 1
percent, rather than a monetary sum, the important factor is how the money is spent. _
- Until now, the parents called the Uni~ed States were very strong, so Japan was
absolutely safe if it stayed with its parents. However, if the parents weaken,
is it enough if thc~ childre~l only take actions which please the parents? Or sh~uid -
the children really ~rop up the parents? P~rom the standpoint of deterrent power,
isn't son?e action associated with nuclear weapons necessary to make the deterrent
power effecr-~ve?
~ Ushiba: What Mr Moroi has ji~st said is true, but in the natural course ~f events,
the United States keeps making demands on Japan. Presently, the problem is how to
- meet those demands. The nex* ,,roblem is how Japan can assist the United States
, with regard to dete.rrent power, and there is no need now for us to worry about it.
To want to worry prematurely is a tendency of the Japanese intPlligentsia. (laughter) _
= For example, th~re is presently no problcm of a food shortage, but because there is -
talk of a possible food crisis, reports such as that made by the Agricultural Arlmin-
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istration De~iberation Council in late October 1980 ~egin to appear. Only essen-
- tial items would be imported, and the res~ would be grown domestically--what would ~
_ happen if that is carried out? '
AS for the comment on world strategy, I am in agreement, but at present Japan mt~st !
be most concerned with what is prc~tecting Japan. That is international law as well
as international order. A clear-cut statement that the Japanese absolutely oppos2
any country which disregards them and uses force contributes greatly to national ~
security. For example, take the autornobile problem. As for the problem faced by
_ a country whose own industries are being hurt by imports of Japanese automobiles, -
there is a safeguard (the emergency import restriction clause) written into Article
19 of GATT (General Agreement on Tariffs and Trade). Wasn't that agreed upon by
everyone? Without trying tc~ apply the safeguard, Europe is asking Japan to volun- -
_ tarily restrict exports. Toward such actions, Japan should have confidence that it
can resist on the basis of international law. In that sense, I think international _
rules should be a part of Japan's world strategy. That point has been forgotten by
all.
Reporter: During the pastwar period, as a rule, Japan's exports have always grown
whenever Japan has participated in economic cooperation. Probably, from now on,
, a slightly altered form of economic cooperation is necessary in giving aid to
strategic areas. -
Ushiba: The first point is to make it "untied" (no strings attached). Japan is _
the world's leading country in giving "untied," aid and it should be continued since
it appeals to the world. There are many now in Japan who complain about "untied"
aid, b ut this is good publicity for Japan. The other point is to consider giving
strategic assistance. This will contribute to the U.S. deterrent power. In essence,
- it would build up the power of countries receiving aid to resist.
Moroi: The defense buildup shouZd be confined to the 1 percent limit, on which there
is consPnsus, and tnore effort should be put into economic cooperation and aid. The ~
view that national security should be strengthened through those means is becoming
stronger in financial circies. Mr Ushiba criticized the shortcomings of the intel-
ligentsia, but I helieve th.at in trying to persuade the Japanese masses, there is
no other meuns to infiltrate their minds except to repeat arguments and explanations
- in very lucid terms. It is easy to formulate a consensus on the position that, since
Japan is sure to receive a shock whenever a disturbance occurs somewhere in the world,
_ Japan should or must take necessary actions, even wj.th sacrifices, to try to prevent
such distrubances or changes from happenir.g. Concretely speaking, I feel that,
_ partly for the reason just stated, the emphasis of the financial world will shift
toward that direcr~i_on.
Eto: In trying to gain an insight into the national psychology, is it correct to _
_ assume that because something had been so, it will continue to be the same? I do
- not think that this will be the case in the 198G's. I think tnat it is a period
when the national psychology will change considerably and run counter to the exper-
ience patterns of the intelligentsia, political circles, the econom3c world, or -
- journalists. To gain an accurate insight, it will be necessary to raise questi.ons ,
_ continuously in explicit terms under directed guidance. ~
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- The viewpoint that defense spending should be limited to 1 percent and that the
emphasis should be shifted to economic aid seems to be a healthy one. However,
to give a specific example, such as the report by the Agricultural Administration
Deliberation Counc il, even if it is carried out, Japan's agricultural productivity
would never equal that of the United States. If that is the case, it will be
necessary to i.mport cheap, good farm products in quantity for the people's benefit.
;.'ho will secure the transportation routes? Japan cannot independently prctect the
route. If a situation should come about whereby grain products could not be supplied
- normally, a serious problem would arise in Japanese-U.S. economir_ relations. There- -
- fore, it ~~rould become necessary to ask the U.S. Pacific Flee~ tc protect the route
_ and assure a steady supply. Discussions should be so linked (related). -
It is odd that when the magic wand of comprehensive national security is waved,
arg~unents arise that everything ought to b e done independenrly. With regard to oil _
~ reserves, where woul.d the supply for over 100 days be stored? There is talk that
_ the oil woul.d be stored in tankers floating in waters off Ogasawara Island, but .
what would happen if someone attacked? How to prevent such attacks is a question _
- that inevitably comes up with regard to oil storage. In order to do that, how -
- much would it cost and where would the funds come from? That would show that the =
problem is being earnestly discussed. It seems that it is not being done.
The financiai circles also claim that if there were an oil reserve of several tens
of days, Japan would be that much safer. It would be excellent for there to be a
discussion on how to store the oil so that ther.e would be a stable supply, no matter
who attacked, and ~ahat actions would be necessary to accomplish that. However, such -
discussions are not being conducted. Such talks are sensitive and draw various
complaints, so they are avoided. This er~ws an insincere attitude. -
Moroi: Japan is not storing oil in anticipation of attaGks but to prepa.re for the
eventuality that disturbances might occur in the oil-produciiig countries from which
- Japan imports and that the supply might be cut off for a while. _
The thinking Of f inancial circles i~ opposite to that of the view just expressed. -
There is no suggestion of self-s~ippiy. It is important to bring ~.n energy sources -
- (frrnn outside), b ut by developine alternate sources of energy, such as nuclear
power an.d coal, the rate of self-sufficiency could be raisPd. In that case, the -
` fastest and most plentiful source is nuclear power generation, but it is unfortunate
that the problem is left to the electric power companies, and although everyone
understands, no one wants to he involved~ The government, administrative staffs,
and financial circles should all cope with the problem. This is an important item -
of national security.
Proposal
Reporter: I would ~~ike to hear your proposals concerning national security for th~
- future.
_ Ushiba: As far as the defen~~~ problem is concerned, Japan should decide "what it _
1 can do and what it cannot do" and intorm the United States as soon as possible. ~
Since the Reagan administration will be nreoccupied with many matters, it would be _
~ a mistake for Japan to think that it cons~antly oc:cupies the focal point in U.S.
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thiriking. P~efor~ their (administration) is decided upor, Japan should pre�.~ent the
proPosal.
~ As for what is demanded of Japan, Defense Secretary Brown has alzeady said it ~
repeatedly. If that is revealed to the nation, the people will probably say, "We].1~
= is that all?" To keep it hidden and to ~ive the impression that the United States _
has made serious demands is not a wise move. Since there was a change in the U.S.
political regime, the delay (on a f inal understanding between Japan snd United
- States conce;-ning defense outlays) was inevitable. Japan should immediately lay
its cards on the table and inform the United States how much it wi11 do. I think
= that this is the most important item concerning defense power, T'!ie other important ~
_ item for Japan's national security is to closely observe international rules, regu- -
. lations, and principles. _
Eto: Mr Moroi used the simile of a parent-child relationship, but one should be
aware that international relations cannat develop into such a relationship. I am -
not saying that Japanese-U.S. relations are cool. Relations are warm, but they are ~
founded on harsh individual interests and nothing more. Therefore, a commitment
- and obligation to follow international rules and order are important. -
- When I think along these lines, I believe that the next item we should consider is
nuclear energy. It is significant as an energy source and essential as a deterrent
~ power. Japan has the unique experiez?ce of having been bombed by a nuclear weapon.
- Presently, although the U.S. deterrent power has weakened comparatively, it is still
reliable. To put it bluntly, if there is such a thing as a U,S. nuclear umbrella,
' we should try to use it tintil it becomes obsolescent. That should be our funda-
mental positior.. Since the destructive power of nuclear weapons is so great, the
- chances are growing that it might not become the ultimate weapon. It is inconceiv-
_ able that nuclear weapons would be used in future international conflicts. Rather, -
- the possibility is stronger thatcomplicated, normal warfare would be conducted. -
� Then the question arises as to what would follow nuclear weapons. _
- For example, even in the United States, a~~guments are growing stronger that a
strategic balance cannot be maintained with the USSR under the present cond3tions
- and that, in addition to nuclear weapons, laser-related weapons must be developed to
augment U. S. power . If Japan can f ully develop such items in the future, they might _
serve as a deterrent. against attempts at a nuclear attack. ~
If Japan's highly sophisticated electronics technique :an be utilized, some threaten-
� ing indications from abroad can be detected quickly. Thei: if the entire world is
informed about them, the security order established to obser~~e international law can
take the necessary action. This is not something which can be done in 2 or 3 years.
H~wever, bc~fore the end of the 1980's, if the industx'ial and financial circles would
` invest heavily to develop it, the governrnent would lend assistance, and the nation
would support it, then Japan's strategic position could be raised by leaps and bounds. -
While Japan might not surpass the United States or the U~SR, it could become their
, equal--with~ut using nuclear armament, which is considered a dirty weapon and a
difficult choice morally. It is not a dream that it can ex.�~ed even nuclear power. _
- To direct Japan's science and t?chnology toward that end is the most essential task
in Japan's national security. However, Japan should not develop such weaponry but -
develop the capability for it. -
- Somehow, I am most worried about rhe first 5 years of the 1980~s because something
might happen, but if Japan st?rvives without being hurt, then our world image should
- have greatly changed by the end of the 1980's and we should have pride.
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" Mor~i: I agree with what you have said, but I think that the most important factor
is, after a11, the vigor, pride, and mor~ 'e of the people. To take the defense `
- problem as an examFle, no m~tter how much is provided in the way of armaments, if
the petsons who use them have no spirit to fight, then the situation is hopeless.
FurChermore, in the case of a small-scale invasion, even if the SDF ~ut up a great
_ battle, if the people behind the lines were to say that the country should surrender _
immediately, the SDF would lose the spirit to fight. The question is how to build
up the vitality and self-respect of the people. In this day and age, even if ttie
higher echelon dictates that you shauld do this or do that, or say that you are mis- ~
taken or a disgrac~, nothing will happen unless the people truly believe in it. To
do that, it is important to ob*_ain a national consensus by putting forth a clear- ~
~ cut worl~ strategy or to propose a world strategy which can win their consent.
= Another item, and this might be beside the point, but. what exactly is the meaning -
of U.S.-Soviet confrontation? It is said ro be a c~nfrontation between democracy
~ and socialism, but adjustments are being made respectively, and in 10 years they -
~ mighL become similar. Whether it be the U.S.-Soviet or the North-South confronta-
- rions, Japan should give serious consideration to the easing of the confrontations
- and the spreading of peace and stability around the world and the survival of man-
- kird. T'herefor~ I feel that in diplomacy, Japan should utter rath~r strong state-
- ments favoring *h^ easing of confrontations.
[Interview format as published; apparent new speaker from this point on]
-
- Improve the Quality of Defense Capability ;
- The heightening of East-West tensions anu Third World developments--partic:ularly -
the conflict within the Arab bloc--in '.:he turbulent 1980's continue to bring forth ;
- severe disturbances. After listening to the advice and views of Messrs Ushiba, Eto, j
and riuroi concerning the security prublem, I feel, as a member cf the political ;
' world, an increasingly heavier responsibility toward my duties.
= When consideri.ng the subject of cum~~~ehensive national security, I think the most I
' important element is, after all, the defense problem. The stable supply of energy ;
sources, such as oil, and of oth~-- natural resources has a direct bearing on the .
very foundatiori upon which Japan stands. It is only natural to consider national
securi.ty from an overall stand~oint. However, I am worried that because the com-
. prehensive nature of national security is overemphasized, the focus becomes blurred. -
I am concerned that because the Comprehensive National Security Cabinet Couneil has
been established, r.he role of the National Defense Council [NDC] will become diluted. -
Of course, there is a need to improve the operations of the NDC, but as the organ -
with the expertisP to deliberate upon Japan's role in the defense sphere, the NDC's -
f~mceians mu:-t be kept intact. -
- Especially urgen!- ~~s a defense task is the need to decide "what to do" and "what
must be done," as Mr Eto pointed out. On looking back, I can say that the def.ense ~
_ b uildup since thE First Defen~e Buildup Plan has been concerned only with outward -
- appearances. Now i.s the timC to develop a high-quality, balanced defense capability -
which will build up not only frontlir.e armaments but also rear support strength.
First of all, rhe transportation capab~lity must be bui.lt up.
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-3 In this connection, a point that must be brought up is the ceiling of 1 percent of
GNP imposed on defense outlays. Some claim that the 1 percent ceiling puts a brake
on defense expenditures, which could increase limitlessly. Unjustified expansion .
~ of defense spending has to be avaided at all costs, but the 1 percent limit must not
- become fixed if there is something essential that has to be done for Japan's nat~onal
security.
On the other hand, the ~,aeakening of the U.S. deterrEnt power has become the central -
- point of national security discussions. I suggest that efforts be continued to
; strengthen mutual r.rust between Japan and the United States, without thinking or
= worrying about tao many things. As a result of last November's Presidential and
Congressional elections, it is possible that the U.S. side will present a number of -
viewpoints. Some E1mE:r.icans might progose that the Japan-U.S. Security Treaty be
altered into a reciprocal arrangement. In view of the basis of the Japan-U.S.
- security setup, it is essential for Japan to improve and further strengthen existing "
- hilateral relations. _
- As long as Japan and United States mutually protect their national interests and
, thereby solidify their relations, it is not conceivable that the U.S. side will make
- unreasonable demands. What is possible and what is necessary should be carried out
by for its own good, and if the request is too big or must be refused, then
_ Japan to overreach itself to meet U.S. demands; in fact, to do so would detract from
Japan`s security. _
While there is a lot of talk abouz the threat of the USSR, which is accelerating its
military buildup, I think that from an overall standpoint the power of the United -
States has not weakened. We must be careful not to follow the example of USSR,
~ which is rapidly increasing its armaments to cover up its domestic economic deficien-
_ cies. 1~'or Japan, it is urgent to avoid halfway discussions and to build up its
defense capability independent.ly. As far as the nuclear problem is concerned, the -
three nonuclear principles should be followed strictly, and nuclear armament must
be absolutely prohibited through politica~ power.
In order to cope wi.th the harsh internal and external conditions, the formulation of -
a consensus, whi_ch Mr Moroi mentioned, is a big political task. In order to do that,
- the position in which Japan has been placed must be honestly and clearly explained. -
The approach should be a natural one, with an independent judgment of the situation
~ and independent questioning and search for solutions to problems. An unnatural
approach, forcing dogmatic answers like "this must be so" on the people, must be
' avoided. The time has arrived when evasion is not permitted, and as a politician =
I want to be farsighted, to express my position and opinions without deceit, and to
~ find and present the best methods of solving tho~e problems which are within the
realm of possibility. ~
- COPYRIGHT: Nihon Keizai Shimbunsha 1981 -
= 9134
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ECONOMIC
D~F~NSE INDUSTRY ASSUMES CAUTIOiIS STAND, CONFID~NT IN MORE SPENDING ~
Tokyo JAPAN ECOPIOMIC JOURNAL in Engli;~h 10 Mar 81 p 11
[Article by Yoichi Motohasi, NIHON KEIZAI SHIMBUN correspondent]
[Text] Tall:s on defense problems or likel}� lo engage in interna- Ltd. "Japanese manufacturers ~
- hare been acti�:ated in Japan tional military conflicts. This should be allowed to accom- -
' H�ith the debut oE lhe Reagan Government stand, in force modate such countries' needs
Admin~s:: ation in the United since 196;, is what is usually as long as military equipment
- 5tat~s and the resulting belief referred to as the "three basic is for their selt-defense."
- that the Americans will appl~~ principles for wea~ons ex- -
= strong pressure on Tokyo to ports." Iliegal exports
step up its defense effor!s as a ln 1976, moreover, then nSany in the industry, how- '
- member of the free world. prime Minister Takeo Miki ever, are far from whole- _
At [he Ke�~ Year's meeting of declared that Japan should hearted in their call for relaxa- _
the Japan Chamber of Com- refrain irom exporting arms tion in arms export regulations.
merce 8 Industr~�. for example, even ~o countries not specified "lt is true that exports will im-
Chairman Shigeo Nagano in the "three basic principles." mensel~~ expand the market for
openl}~ wondered about the in order to export weapons, the Japanese defense industry
- possibilit~� o! Japan's exporting Japanese corporations are cur- ~d will contribute to lowering
~~eapons and parts to countries renf!~~ required to obtain the production costs," states the ~
not likely to engage in overt ti,,~rnational Trade & Industry Secretariat of the Deiense
international militar}~ ac[ions. Mirister's approval. MITI's Production Committee of
- This announcement touched off sland on this problem is re- Keidanren cthe Federation of
ti~ide-ranging repercuss~ons in portedly very stiff. Reports Economic Organizations). "We
carious circles. have it that, when a certain ~'e not in a position to push for -
electric machiner~� company rela~~:ation on export controls,
_ Three basic principles tried to sell its weapons export however, if we consider our
'Che defense industr~~ itself. ~dea to N1I'fI it a�as flatly country's place in the interna-
~ hoa~ever, is rattled, rather than turned down b~~ an official in tional community�
- pleased. b}� this turn of e~~ents. charge who declared that he A11 those concerned in lhe in-
- The industr}� apparently feels seriously believed in the "three dus[r}~ do not hide their irrita,
that it should be left alone for ~sic principles." tion at Hotta Hagane Cci. of'
~ the time being - at least imtil It is true that there is a Osaka ~~hich made infamous -
ti~E~ da~�s ~~hen a greater con- strong underlying belief among headlines a while ago for its
s~�^~u~. on arms exports is Japanese weapons manufac- illegal gun barrel exports to the
formed ~~~~ng the Japanese turers that current strict Republic of Korea. "The in-
- public. ~
The Japanese Government restrictions on overseas cident is too crude for us to
weapons shipments should be make an~~ torm comment on,"
currentiti~ pr�ohibits w�eapcros relaxed. spits out Chairman Tomio
= exEwrts to: 1~ Camni~~i,...~ �~~,~at developing countries Tanatsugu of the Japan Arms
- countries. 2~ countries ~�here ~re currentl~~ in real need of industry Association (concur-
��eapons expor~s are prohibited are u~eapons and foodstuffs," rently vice president of Toshiba
under UN resolutions, and 3~ admits President Zenji Umeda ~rP�~�
- ruunlries currentl}� engaged in of KaH~asaki Heavy Industries, "Hotta Hagane is not even a
" 12
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~ member of our association," prepared to fight it out in inter- weapons have been increased
_ cuncars anoiher oificial of the national markets with leading by as much as 17.7 per cent for
' Japan Arms Industry Associa- w�eapons manufacturers of the new fiscal year of 1981 over
- tion when faced with the Inter- 4~'estarn countries? The answer the preceding year. It is true
national Trade & Industr~~ apparently is no. that a considerable portion oE
hlinislr~~'s conclusion that the "1~4e cannot equip our o~m such weapons, including C130
Osaka machir.er~~ exporter had country with enough defense transport planes, will have to
actuall,y committed an illegal weaponr}�," remarks Vice Pre- be imported. Weapons to be
action. "I~gitimate" members sident Kosaku Inaba of Ishi- produced within the country,
; uf the arms industr~~ appear kaw�ajima-Harima Hea~~y In- how�ever, also are steadily in-
disgusted at the peccadi:lo dustries. "How� can we con- creasing. The Japanese arms
committed by an outsider. tribute to other countries' industry, in other words, can
- militar~~ efforts?" currently afford to sit tight
~ 'O~~erall securitr' policy The final direction of the na- without crying for decontrolling
The defense industry has its tion's arms industr~~ has to be of arms exports; it has enough
own reasons for remaining charted, not b}� the industr}� it- work to do for the time being.
cautious about the call for self, but by the governmer~t in "~Vhat we have to do above
decontrol of arms exports. Qne the context of the nation's over- anything else," states Chair-
is the fact that. even if arms all national securit~~. It is all up man Tanatsugu of the Japan
exports are openl~~ approved to the government whether to Arms Industry Association, "is
_ vis-a-vis countries not covered approve arms exports, put the to plant our Feet firmly on the
b~~ the "three principle." not weapons industry on a true ~round and build our indt~trial
much benefit is expected to mass production systern and and technological prowess."
come out of it. make the Defense Agency ac- �~The Japanese arms industry
"The interr,ational situation. cessible to lo~~-priced arms or had better avoid the risk of
if an~~thing, has become all the whelher to tLSe, as does France, getting burned," concurred
more tense toda~~ than the time weapons. exports as an instru- Chairman Yoshihiro Inayama
_ ~~hen the three principles came ment for securing natural re- of Keidanren in a speech made
_ into being," states Chairman sources. at the Foreign Correspondents
- Tanatsugu of the 3apan Arms In the meantime, Director Club of Japan,~ implying that
Industr~� Association. "Where General Joji Omura of the the present call for freer arms
in the world can we expect to Defense Agency proudly stated exports is the proverbial
make any significan~ expurts^: at the New Year's meeting of chestnuts in a burning fire.
1'ou would be nuts to believe the members of the Japan The Japanese arms industry
that we can make enough ex- Arms Industry Associ2[ion, seems [o believe that it has to
por[s to bring dow~n production that, although the defense be extra cautious at this crucial
- costs of made�in-Japan budget for fiscal 1981 failed to time in order not to deflect, by
w�eapons." increase by the original target some careless moves, the na-
Another reason is that the of 9.7 per cent, the budget con- tion's steadily growing mood
Japanese arms industr~~ is not [ent is something to be proud for the necessity of reasonable
~~et in a position to boldly blaze of. strong defense and the gov~rn-
international markels for its ~Enou h work' ment's willingness to bolster
- products. Japanese manufac- g defense erpenses. Such touchy
turers are belie~ed to have ~%hat~ Ornura primarily problems as arms exports can
fairl~~ excellent technolog~ in meant by his statement is that best be left alone, according to
production o[ tanks and mis- the budgetary appropriations many industry leaders. -
~iles. Are the~�. how~e~~er, reall}~ for combat and related
- COPYRIGHT: 1981, The Nihon Keizai Shimbun, Inc.
CSO: 4120
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- ECONOMIC
DEVELOPME'NTS IN TNTERNATIONAL SMALL CAR WAR ANALYZED
Tokyo YOMIURI SHIMBUN in Japanese 31 Jan 81 p 3 ;
[Text] Nissan Lands in Great Britain; High-Level Political Decision Involved
Nissan Motor Co Ltd's dE:cision to independently construct an automobile plant
in England has caused complex repercussions not only in Englsnd, which is
suffering from unemployment and serious recession revolving around its automo-
- bile industr~;, but also the r~st of the world, beginning with the European _
community [EC]. This is because the decision to ven~ure independently for the -
first time by a Japanese automobile maker into Europe, with its deep-rooted
"distrust af Japan," is bound to engulf the international ssa.ll car war iiito
_ a new state of affairs. -
The reaction among members of Japan's automobile industry has been varied. _
"Nissan's decision is backed by hig?-.-level political resolution," some surmise,
but on the other hand, cold remarks like, "Mr Nissan, are you serious about i_
. your decision?," are being heard. But~ this sort of cold reaction by the indus-
- try probably includes a feeling of envy at Nissan for its successively spectacu-
lar international enterprises. _
The automobile industry has Pntered into international realignments in prepara-
tion for engaging in the interr.ational small car war. Within this arrangement,
Ja~an`s automobile industry, which has pro~ressed one step ahead in the develop-
- ment and mass production technology of small cars, has an advantage compared
with that of the lagging United States and European countries. This advantage -
has been the cause of friction with the automobile industries in the United
States and Europe, resulting in a serious political pxoblem; moreover, it has `
been a condition for the overseas prnduction and international tie-ins demanded
by Japan's manufacturers. -
With this sort of background, a great accomplishment in improving relations
- betraeen England and Japan can be expected through Nissan's plant construction
~ in England. However, for England's automobile industry, which has fallen into -
the lowest state of depression since the war, a strong rival is being added to
the number of competitors, and some have said: "It will not lead to any relaxa-
tion of ;.ension in the British automobile industry. Instead tension wi.ll
= increase,"
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- At the moment, the concern is focused on th~ reaction the British industry
exhibits at the 2-day Japanese-British private automobile conference to be
held in Lisbon, Portugal on 2 and 3 February. It is interesting to note
that this conference was scheduled only after Japan agreed to cooperate with
the British industry, which is in a state of stagnation.
Japan is most fearful of America's attitude. When friction between U.S. and
Japanese automobile companies became a political problem, the Uaited States
strongly insisted that both Toyota Motor Co Ltd and Nissan build their auto-
mobile plants on American soil. But the reaction from both companies has re-
mained "negative." In the wake of these events, Nissan's decision to build
in England has ruffled the feelings of America the opposite way. The fact is,
with the development of the automobile policies of President Reagan's new adwin-
- istration which has just begun, rekindlin~ of the automobile friction problem
is inevitable.
- At any rate, Japan's automobile industry has met "the rough; blowing storm of
internationalization," as exemplified by the tie-in negotiations of Toyota-Ford
- and Nissan Volkswagen since Iast year, and it has became the focal point in the
- realignment of the world's automobile industry. This is proof of the encourage-
_ ment and confidence gained by Japan's automobile industry.
Yet some quarters feel that the automobile industry is ''a little hasty." Con-
sider the Big Three in America and the much publicized managerial crisis of
Chrysler Motors as examples: one faulty move in management and in no time the
company is stifled. The risks are gre~*_ because Japan is still green in "inter-
' nationalization." These problems must be sfllved first before acquiring the
status of internationalization; otherwise the true worth of Japan's automobile
industry is in doubt.
Great Britain Is Receptive; EC Is Cautious
In spite of the deep-r.,oted feeling of wariness toward Japan prevailing
- throughout Great Britain, the anticipation of an increase in local employment
_ and of technological interchange was suddenly heightened to a rousing recep-
tion beyond imagination. This especially raises hopes for success as a mile-
_ stone in the new Japan-British economic relations.
Soon after World War II, Nissan Motors received technical assistance from
Austin Co, one of the predecessors of the present nationally owned BL manufac-
turing firm (formerly British Leland), and it achieved its present prominence
by improving its knuw-how in automobile production. In other words, since this
was a case of tiie "student" making a reverse landing, for the British the news
- produced a. slightly bitter taste among older people. Moreover, the rightwing
conservative newspaper DAILY EXPRESS lamented: "Why should the establishment of
a Japanese e,~terprise in England be supported with our precious tax money!"
_ Change in Reaction to Economic Move by Japanese
But the British reaction, evein during the first day, the 29th, to announcement
of the plan chan~�ed from an initial feeling of revolt to a subtle softening up,
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-
~
leading to enthusiastic approval and this sign of a chang~ in accepting i-
Japan's economic move was clearly perceive.d. ,
Iri the afternoon of the 29th, during interpellations in the House of Commona,
an opposition party member from an electoral district urith a large number of
unemployed workers changed the mAOd of the gathering with his spontar_eous _
appeal: "The site of the plant should be in my constituency." Then, too, -
the automobile industry and labor unions, while calling for a number of stipu- i,
- lations, in principle declared an inclination toward approval. Press comments
were generally favorable, while ca7_ling for a bala~nce to relieve the domestic _
_ automobile manufacturers. Even the popular newspapers, which featured glaring
headlines with "Jap" references to Japan, emphasized the increase in job oppor-
tunities and viewed the developments with an extremely cool attitude.
In the background of all these occurrences is the heavily pressing problem of '
unemploymen~, which has reached 2.41 million peoplP (an unemployment rate of
- 10 percent). It appears the main ob~ective of the British Goverrnnent in
approving Nissan's plant construction plan is not only to bolster the consis-
_ tently stagnating domestic automobile industry with "shock" therapy, but in a
broad sense, ~.o strengthen the industrial state reconstruction policy of Prime '
Minister Thatc:her's Cor.servative Party administration.
Desire To Develop an Independent Technology -
The 20 Japanese-financed firms which are already in operation, mainly in Wales
and Scotland, have all maintained stable labor and management relations, even
including such problematical industries as color television, and they have
been highly regarded with an increase in employment of the local populace.
Since Nissan has not yet conclusively decided on the site of its plant con-
struction, the areas where Japanese plants are already established have
promptly made overtures which refl^.ct the earnest efforts to solve their un-
emp"loyment plight.
But the truth is that there is n~thing palpable anywhere yet that would serve
as positive proof of the futu~t smoothness of Nissan's venture. Members of
the British automobile world strongly hope that the Japanese manufacturer will -
unveil a conservative, independent technology in its overseas venture.
Although the British ha~~e generally welcomed the move, still remaining is the
resistance of the rest of the EC, which feels the threat of Japanese automo-
_ biles. Particularly because the British Government's intention is to seek
- Nissan's cooperation to export its newly manufactured cars to other countries,
_ a clash ~��.~h EC automobile manufacturers is inevitable. A case in point is
France, wtiich ,.as replaced as the ranking foreign exporter in the West German _
market last year lor the first time by Japan. Because all Europe feels pres- -
sured by the Japanese, it is anticipated that any action such as preferenrial
treatment in the tax syst~~r *o be accorded by the British Government to Na.ssan
- will be made in accordance with EC practice~.
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(1) (2) ~3)
�i~'1 ~i> , . " ' �
' 4~=== ~ea#~~~ 5-~---~
~~~r~:rF ~6~ -
_ L--. ' . CT 9"1 ~ -
7~- F $1_ F a~~= BL
. . . ~r~~~~ -
~ ~ ' ~ ~ . ~fl~~~ (12> -
~ 10 11 ` ' ~f * x -
~1+~F~~7 a=: e~~th* ~~?.7'�a~~t (13) -
, 2f11 ~ C-f 9'J _
7~2~ 4 ~ ~ti-~~.-f~~~(15) -
_ '17 i (~~-f ~
i
7~ ~f =3~~= 8 ~ (16) -
h ~f
~~'1:~:� (2 ~ 7-'i~-�iFQ=: (19) _
~-g-X C7~iZ)
~ ~~,z l2~) ~~~'~�~ffi~23 ~~~-~:m ' ~21~
' ~ C79~~)
~-iiE~iX ~ ##i'~"i~ltl! ---3~11~ ::'::::2Wii~~' -
(24) (25) (26) (27) .
- International Relations Between Japanese, U.S. ~nd European Automobile _
Manufacturers
_ Key:
- (1) United States (15) Motor Iberia (Spain)
- (2) Japan (16) Volkswagen (West Germany)
(3) Europe (17} Chrysler _
(4) Passenger car plant (18) .Sitsubishi Motor Co Ltd -
(5) Honda Motor Co Ltd (19) Peugeot/Citroen (France)
(6) Fiat (Italy) (20) American Motors
(7) BL (Great Britain) (21) Renault Public Corporation (Francej
(8) Ford (22) General Motors
(9) Toyota Motor Co Ltd (23) Isuzu Motors Ltd
_ (10) Small truck plant (24) Capital tie in
' (11) Nissan Motor Co Ltd (25) Administrative/technical tie-in
(12) Passenger car plant (26) Under negotiation
(Great Britain) (27) Plant construction decided
~ (13) Alfa Romeo (Italy)
(14) Toyo Kogyo Co Ltd
= COPYRIGHT: Yomiuri Shimbunsha 1981 ~
~ -
9510
CSO: 4105 -
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, ECONOMIC
AI?TICI.i;S REVIEW STOCK MARKET PERFORMANCES _
Robot Manufacturer Fujitsu Fanuc
_ Tokya SHUKAN SHINCHO in Japanese 22 Jan 81 pp 132, 133 .
[Text] Are you aware that in the very near future caddies on Japanese golf courses _
~ will be replaced by robots? That these robots will oe equipped with microcomputers
so as to perform such skills as calculating the drop poin~ of the ball right after -
~ its impact a.nd ~:1eii walking over to point out its location? "Moreover, it will
- even b~ able Lo calculate the golfer's ability from only his swing and then deter- _
mine his handicap!" In all likelihood these predictions must be true since they
= a~e being made by robot manufacturing technicians. The technology standard of
- robot manufacturing today has reached this sophisticated level. And at this _
moment, the stock price of robot manufacturer "Fujitsu Fanuc" (listedy second ,
- section, Tokyo Stock Exchange) has surpassed the record held by Son; Corporation. -
The record-breaking 6,000-yen mark is *.he highest recorded in historv. According
to bubbling Kabuto-cho sources, "with this record, Japan has finally entered the
= age of robots."
_ ,
Robots To Build Automobiles -
Some segments attribute the progress of the robots, indeed, to the "invader games."
- It i.s reported that, some time ago, a fantastic price was placed on the stocks of
an ur.known company called "Biatron" on Wall Street. This was because of the company's
epoch-making development of the microcomputer, but at that time, for the reason ,
that "no one knew the usage of microcomputers," the product hardly sold. The
"Biatron" company tragically went bankrupt. For a long time after that, even in
Japan, the talk among stockbrokers was rhat "microcomputers are anathema" and they
nevcr bothered to handle the stocks.
13ut tl~e fact of t'.-.e matter is that none other than the portable electronic computer
. and the invader gam~~: were responsible for popularizing a product with such a -
terrible history. (Note: The added factor was the use of' large scale integration
[LSI] which constituted the he^r.t of the microcomputer. The invader games, in
- particular, utilize a great deal of LSI.) As a result, the microcomputer was
further reduced in size and price, ancl, as you are fully aware already, incorporated
in television and the automobile, and evtntually, as it came to be the brains of
the robot, this high-performance microcomputer underwent mass production.
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- The so-called first robot to achieve practical application was the numerical control
[NC] apparatus. It consisted only of a microco~nputer attachmenr on sucn machine
tools as lathes and milling machines.
"They are sold overwhelmingly to small iron warks. When purchased by a village
shop, the father prepares the program and the mother pushes the button, And since
thereafter the microcomputer with autom~ted control conducts the operaS:ions, father
alone is suff icient."
= This is the origin of the robot. In the wake of these NC machine tools, the
- genuine robot appeared. Included in the group of industrial use robots were those
identified as welding robots, painting robots, conveyor robots, among others.
It is said that if an NC machine tooZ is combined with these robots, then a human
being is totally unnecessary.
"The automobile and electrical products manufacturers are rapidly undergoing roboti-
zation. For instance, in th~ case of the automobile manufactuer, spot welding is
performed at 1,200 poir.ts on each automobile, but already the bulk of the work is
done by robots. Today robots with such names as Momoe and Junko do welding. Even
- painting is performed by robots. To attach tires on a completed vehicle, handy
robots are already in use which can screw the complete set of nuts and bol.ts at
one time."
- Lately ofFicials of automobile manufacturers from the United States and Europe
have been actively visiting Toyota Motor Co Ltd and Nissan Motor Co Ltd with
proposals of joint operations, but reportedly their eyes are fixed on the "manless
plant" rather than on the performance of the vehicles.
_ At any rate, it is reported that t.he robot industry, whose development is only
- recent, already numbers 140 firms, including such big companies as thP Yaskawa
Electric Manufacturing Co Ltd and the Mitsubishi Electric Corp. And among them
_ the top manufacturer specializing in robo~.s is "Fuji.tsu Fanuc." It nee3s no
introduction as the subsidiary of Fujitsu Ltd of computer fame.
= President Inaba, "~mperor of the Robots"
The firm was established in 1972. Although established only recenCly, its sales
' during the past 5 years have increased eight times (at present, 80 billion yen
per annum); moreover, it is said that President Seieimon Inaba (55 years old)
has already been honored with the sobriquet "emperor" of the robot industry.
His business has become a"monopolized industry."
According to a fellow manufacturer of robots: "That man is Japan's foremost
individual in the ~ield of NC machine tools. Because, way before the development
of microcomputers (1952), the United States Air Force had constructed a mammoth
NC machine tool using 18,000 uni~s of vacuum tubes, but only 4 years later the same
thing w~zs duplicated in Japan by this man. He was then only a section chief at
Fuj itsu Ltd."
"Then, after that, Mr Inaba devoted himself to NC machine tools and visited machine
tool manufacturers throughout Japan to seek their cooperation. Thus, with the
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practical application of NC becoming a reality and even the birth of Lhe robot,
- small wonder that in the machine tool world Mr Inaba is considered the "founder"
and accorded godlike reverence. Sales are made with this overwhelming mark of
- distinction."
- It is reported that he controls 70 percent of the domestic market and 50 percent
of the ~vorld market. The fact is that the rest of the manufacLUrers have giv~n
up the idea of competing for a share in the mainline machine tool business world,
and are engaged in expanding the rnarkets in the automobile and electrical business
areas.
- So, we paid a visit to the person dubbed the "emperor of the robots" in the main
building of Fu~itsu Fanuc in Hino City, Tokyo. I am certain tha~ anyone visi~ing
the company for the first time would be astonished. Except Por the glass windows,
- the building is totally yellow. President Seieimon Inaba greeted us wearing a
yellow coat. His secretary wore a yellow one-piece dress. The company officials and
employees all wore yellow working clothes. Upon inquiry, it was learned tha~ the
employees' quarters are also painted bright yellow.
- "Isn't yellow a�iice, bright color? The trousers worn by the men at the head-
quartzrs plant ~rc all different, but at the recently constructed Fuji p lant, it
- was decided that even the trousers will be uniformly yellow."
_ We wondered if the color scheme was made with the robots in mind; not so, for it
appeared to be based on the aesChetic taste of the president. "Our stock price
has surpassed that of Sony Ltd, and I consider this to be the logical co urse.
Ours is a company that has striven day and night for a manless plant. We are not
deterred by either prosperity or depre~sion. Because we ourselves promoted the
, establishment of a"manless plant" ahead of others, we have realized prof its worthy
of that change. We consider our company to be the equivalent of an "outstanding
student."
This person was not haughtily relating his success story. He gave the account
" wi.th a serious mien.
Midnight Work Utilizing Robots
- Next a tour oF the plant was made. This indeed was the world-famed manless plant
wherein so-called rabots made robots. Reportedly this company is bet~er known
_ abroad than at home, and among the large stockholders are such giants as "Siemens,"
_ "Chase Manhattan Bank" and even "Arab oil iriterests."
There they we:�~! The principals on the floor of the motor manufacturing flow
- process at t~.~ he?dquarters plant were ten conveyor robots and automated machine
- tools. Each robot ~~~:s given the name of a flower, such as chrysanthemum, lily,
etc; and Miss Chrysanthemum had an indicator light that read "24-hour op eration."
'I'his machine alone literally c~ntinued operating for 24 hours. Within the wide
- plant interior were two or three persons leisurely checking the machines. They
work orcly during the day.
"Workers in Western countries operate on a three-shift system for 24 hours. Japan
is the only country bound by the Labor Standards Law. Employees work only during
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ttie day. It seems factories operating 24 hours in Japan are just about limited to
iron and steel plants. With such a situation, Japan could never catch up with the
Western nations. For this reason, the manless plant was first realized in Japan.
The robots say zothing and work silently even in the dead of night."
= The most up-to-date Fuji plant, which was completed in late 1980, is even more
advanced and at night there are only two individuals to monitor the central command
room. (Note: Only the assembling operation of the final. processing section has
~ not yet been robotized.) .
The number of workers at this company totals 3bout 860. This is about one-fifth
- the number of workers normally employed by a company of similar size.
An official of the All-Japan Federation of Electric Machine Workers Union, with
which the labor union of this company is affiliated, said the following without
hiding his bewilderment: "In Europe the penetration of robots in factories has
already become the most important issue among the labor pr~blems. But in vanguard
Japan, the situation is different. The use of robots does not mean an i~ediate
follow-up of worker dismissals; usually the workers are reeducated to become
programmers. Hitherto, progra~ners were regarded as white collar workers, but
conditions have changed, and it may be that programmers may be classified as blue
- collar workers or that a new classification may be developed."
- In passing, the company operates on a 5-day woricweek. There is no overtime work.
~ And the pay standards are slightly above average.
_ COPYRIGHT: by Shinchosha 1981
Defense~Related Stocks
Tokyo KEIZAI TENBO in Japanese 1 Feb 81 pp 84, 85
[Text] Will Defense-Related Stocks Ever Become Leading Stocks?
Japan's national defense budget has been increased substantially, the Reagan
_ administration with its hawkish image has come aboard in the midst of Che height-
ening of international tensions, and so without doubt it is the opportune time for
defense-related stocks to rise, but there has hardly been any indication of move-
ment. In order to find out what has happened, a study of the circumstances
surroundinK defense-related stocks was made.
Substantial Increase in National Defense Budget
The grand opening of this year began on a wave of prosperity with a sharp gain
exceeding 30 yen, at~c~ Kabuto-cho officials stated: "This action is a forecast of
the f.uture," and the usual big optimistic forecast was released.
, "1'he leaders will be the high-energy stocks represented by electronics."
"~Iigh-level technology, which will be more sophisticated than genetlc en~ineering
_ and others, will lead the 1981 market."
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Such were the i�emar.ks made boisterously to support the analysis, but the defense- _
= related stocks, which were due to become the certain topics of discussion about -
this time based on past performance, are lacking just one more push in their _
det~elopment. That is to say, circumstances surrounding defense-related stocks
would certainly place them in a suitable, transitional position.
Actually, at this point, events that could stimulate defense-related stocks have
- all at once become plentiful. For instance, the national defense budget totalling
- 2.4-trillion-plus yen has a percentage increase, compared with the pr~vious fiscal
year, of 7.61 percent, which exceeds that of the welfare budget which recently
increased in importance with recognition of the aging society; and even with the
GNP, although way short of the 1 percent desired by those connected with it, it -
has reached a relatively high 0.906 percent.
But before the ~udget was compiled, the demand relayed by American officials was -
a percentage increase over the 9.7 percent o~ the previous fiscal year, whereas -
the Defense Agency demand, in considerat~on of domestic affairs, was 9.1 percent.
~
- Thus when comparing these figures, one cannot easily brush aside the feeling that ~
the percentage increase of 7.6 percent is indeed low, bu~ because the country is
involved critica'ly in financial reconstrur_tion, the outcry that the "decision
_ was appropriate" l~as been overwhelming.
On the other hand, naval ships and aircraft were recognized as "frontal armaments"
by a wide margin, and as a result the load in the next fiscal year will be substan- -
tially"increased, and after the following fiscal year (FY82), according to Defense -
Agency officials, the shape of things will be: "Even while remaining silent, it -
. has been agreed that a sharp increase of about 10 percent will be vir~uaiiy ~
_ promised."
. _
Although Conditions Are Adequate...
As for developments abroad, on 20 Ju.,uary in America, President Reagan and his
administration with its strong hawtc~sh image replaced President Carter and his -
- administration F~ith its dovish imaRe. As we all remember, this change was welcomed
and right after that the U.S. st~~k market, especially munitions-related stocks, .
- showed an all-round market advance.
- The East-West confrontation which hinges on U.S.-Soviet relations has increased
- in tension with the passage of time and the prediction is that the policies here-
after will magnify their hawkish images even more. And as expected, the predic-
tion is that there will be stronger voices seeking the strengthening of the defense
- powers of allied countries such as the Western nations and Japan. -
- Richard Alle.~, wh~ is expected to be named national security adviser (probably ~
fi.nalized during pi.~~lication of this issue), at a press conference with Japanese
- correspondents in early January stated: "The tasks whieh must be performed by the
- United States and Japan, which are th~ world's leading and second leading super-
- ~conomic powers, are many, bu~ in any case the solutions must be reached with the
~ focus on the most important issue, which is the maintenance of peace."
So saying, he tacitly called for 3apan to further strengthen it~ defense powers.
- As mentioned previously, the increase in Japan`s defense strength, and following _
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= this the environment surrounding the defense industries, has turned so favorable -
that no period in the past can be compared. Within limitations, it can be said
that condita.ons for the rapid progress of defense-related stocks are more than =
amply ripe.
Of course, the sharp-witted people in the securities business would not let thls
golden opportunity pass by, and several times last year they deliberately attem~~ted
to push defense-related stocks into the limelight. But the truth is that these _
attemPts were not fruitful. '
This is what happened last year: During the first part of the year, such events =
as the U.S. hostages in Iran and th~ Soviet niilitary invasion of Afghanistan
intensified international tensions, and in midyear this was further intensified
with the outbreak of the Iran-Iraq war; so subsequently great fanfare was raised -
on occasion for defense-related stocks, but in all cases they fizzled out and these - _
- stocks never became leaders. -
- S
Also during last year, resources stock~s related to the energy crisis, high-technology -
stocks represented by sharply increasing electronics, and small speculative stocks -
which were boosted by hawk Ronald Reagan's election all did not lack topicality -
- on each occasion, and perhaps there were times when "attention could noC be paid"
to defense-related stocks, but it can probably be said that they were not attrac-
tive, at least not as much as publiciz~d by the entire securities ~aorld.
Incidentally, the defense-related stocks, during last year and even up to the -
present, have not risen as much in price as they have been widely publicized.
- And For this reason there has been a lot ~f talk recently that "defense-related
stocks at Kabuto-cho will never make it as leading stocks." -
~dil1 This Truly Be the Perennial Theme?
One of the reasons given as to why defense-related stocks at Kabutu-cho cannot be _
leading stocks is that the defense industry, which is the principal in this case, -
moves on "mood" so far ahead while not realizing profits along the way. Actually, "
favorable reports of prosperity that would bring forth a roar from the masses have _
been circulated from time to time, but tYien reports of profits going up on this _
- account have never been heard.
Indeed, the acquisitions from up-to-date technologies have their own merits, but -
this does not mean that "mood" did not prevai:l over performance. If this is true,
then the fact that the popularity of defense-related stocks should end simply as =
a result of mood is to be expected.
I3ut in addition, the more fundamental issue is believed by some to be the consti-
" tutional provision banning rearmament. Regardless of all the fanfare about defense
industries or defense-related stocks, this constitutional provision has been the
shackle that has blocked taking that one forward step.
"You cannot expect only Kabuto-cho to be beating the drums and clamor defense! -
- defense!" So, admir.ably, did a securities company official confess ttie state of _
affairs. On the other hand, having a peaceful constitution that bans rearmament
is also to be expected. _
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With Uanner cri.es t~ere and there, it is likely that defense-related stocks will be -
the topic of discussion in the stock market from time to time hereafter, but they
cannot be expected to become leaders of the whole market; it will probably end at
_ least within the bounds of "prayers being answered," that would augment an
- insufficiency of theme. Within that limit, shouldn't the perennial theme be desCribed
as the admir.able expression of Kabuto-cho's image of the issue on defense?
_ High Technology Stocks -
Tokyo 1:~IZAI TE:1B0 in Japanese 1 Jan 81 pp 99-105
[Text) As if to symbolize "violent fluctuations in the 1980's," the 1980 stock
market was really rocked by a succession of wide fluctuations. The upsurge of -
_ speculative stocks as represented by Miyaji Iron Works Co Ltd, the deluge of forei~n
investments, the purchase of defense-related stocks consistent w~th the mood of =
worldwide military expansion based on the Soviet invasion of Afghanistan, the
- outbreak of the Iran-Iraq war and other events affected the market, and as a
result issues that were not expected in the beginning to move, fluctuated heavily.
- Partly because the resistibility to inflation and the vitality of Japanese business
enterprises after the second oil shock were favorably appraised internationally,
Japan's stock markpt has shown a smooth development, and the Nikkei Dow-Jones has
shown a continuous upward trend, from 6,560 yen at the beginning of the year to -
brealcing the high mark of 7,000 yen.
_ What is in store for the new year, I981? For the majority, a bullish prospect is
- dominant because of the lively stock investments in a background of financial
relaxation. What ~roup of stocks will bE: active? From among the various theories -
propaunded, the most reliable one now i~ high technology stocks, which are causing -
a boom even on Wall Street. In Japan the tempo of R&D has been hastened in the
various fields of industry such as electronic computers, software, communications ~
machinery and equipment, energy development related, genetic engineering and '
electronics, and already signs o� a?-,ow are surfacing. In all likelihood, high -
- technology stocks will asstune the ~o).e of leading stocks in the stock market for
the new year. -
--Toray Industries Inc 4
High for year 270 yen 4 November
= Low for year 205 yen 11 March
Target price 300 yen
nete nnined To Develop Promising Manufactured Products
_ '1'he largest u:.~iuf.aceurer of synthetic fiber. Determined to develop promising
mantifactured producrG based on the potential of established high technologies.
Among its already developed products are polyester films with shares of audio-use
67 percent, VTR-use 85 percent, top-grade carbon fibers with a 50 percent share of
the world's market, among othEts. Also progra~ned is the develo~ment of inter- -
- feron, with prospects of mass production in 2 or 3 years.
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'~i` Forecast nf Increased Revenues and Decreased Profits
rt
,~t~l
,w~3 '
The intermediate report in September of this period (6 months) showed sales of
_,,;-~,F:.~ 267.558 billion yen (an increase of 17.8 percent over that of a year before), a
recurring income of 14.22 billion yen (a decrease of 13.6 p~rcent from that of g
year before) and ~,rofits after taxes of 6.509 billion yen (a decrease of 11.7
percent from that of a;~ear before). Reduced profits are anticipated because of
_ the continued sluggishne~s of the textile market during tne latter geriod (6 months).
The prospects for the current period are sales of 540 billion yen (an increase of -
= 12 percent over that of a year before) and recurring income of 23 billion yen (a -
decrease of 28 percent from that of a year before).
Movement of Stock Price
Began an upward trend since hitting the bottom at a lo~ of 205 yen last March
and closed at a high of 270 yen in November. Since then, there has been a slight
- buy-at-low tendency and the prevailing price has havered in the high price range -
= of 260 yen. However, a high price situation is forecast because of many stimulating ~
- news items such as a new semiconductor element, interferon, etc. Interest of
foreigners is aroused on its reputation as a high technology stock. Foz~ the time
being, buy at a temporary decline with 300 yen as target.
--The Green Cross Corp
High for year 2,260 yen 26 November
Low for year 1,650 yen 26 June ,
Target price 2,500 yen
_ Total Effort on Development of Z~ao Outstanding New Drugs _
A company that grew rapidly mainly with manufacturing blood agents. In recent
year.s priorities have been placed on the R&D of artificial blood and interferon.
- ~pproval for manufacture of artificial blood (fozol DA) has already been obtained -
_ and the construction of facilities is expected during the latter half of 1981.
- On the other hand, the commercialization of interferon is advancing at a rapid
pace and recent];~ a test plant was cunstructed and put in operation.
Trend Toward Increased Earnings =
The intermediate report completed last June showed sales of 28.163 billion yen
(an increase of 37 percent over that of a year ago), recurring :income of 5,286
billion yen (an increase of 21 percent over that of a year ago) and a profit after
taxes of 2.158 billion yen (an increase of 17 percent over that of a year ago). -
The latter period is expected to undergo a smooth transition; for the current period,
the prospects are sales of 58 billion yen (an increase of 27 percent over that of
a year ago) and a recurring income of 10.4 billion yen (an increase of 17 percent -
~ over that of a year ago).
Movement ot Stock Price
- Prices took on a rising trend from a low of 1,650 yen in June to reach a high of
_ 2,260 yen in November. The prevailing price has dropped 100 yen, to the 2,160
yen range. However, with artificial blood and interferon, company performance as
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~ well as stock price, to f~llow through with the two outstanding new~ items, an
increase of one more step can be expected. With rights to 10 percent free shares
at the end of this period (December 1980, the target price is 2,500 yen.
Mass Production Is Problem With Interferon
Eagerly awaited as the "miracle anticancer agent" is interferon. An intense
~ competition ~or its development is being waged throughout the world today. Inter-
- feron is an artificial micro-organism which is made from genetic manipulation and
- it is a promising product in the field of genetic engineering that ranks alongside -
insulin (reportedly a highly effective agent for curing diabetes) and others. ~
As to the state of development in Japan, the Green Cross Corp and Toray Industries ~
Inc have been involved on a commission by the Research Deve'opment Cornoration of
_ Japan, and various research activities have been conducted including clinical
demonstr3tions at the Nat;onal Cancer Research Institute, (Zaihara Seitoku?)
Research Institute, etc.
The effectiveness of i~~terferon has been recognized even at the above-mentioned
- medical society. bu~ the problem is that technology for i.ts mass production has not _
yet been establi~hed. It is worthy of note that i~i late November last year it was
announced that a Japanese researcher at the U.S. National Health Research Institute
J had developed a method to mass produce artificial micro-organisms; and so the _
advent of the era of mass supply and demand, it appears, is not far away.
Reportedly a minimum of 250 million to S00 million units of interferon is needed -
to treat a cancer patient and the Green Cross Corp and Toray Industries Inc, which _
are Japan's principai companies engaged in its R&D, have the ob~ective of producing
4 billion units per month by 1984.
_ --Ajinomoto Co Ltd -
High for year 794 yen 1 December -
� Low For year 510 yen 18 March
Target price 800 yen
Leader in the Field of Amino Acids
In genetic engineering, the company is engaged in applied research in its forte,
. amino acids. Already by utilizing its technique, it has begun to make th.e world's
rirst new type colon bacilli with which to produce pure amina acids. In amir~o _
. acid research, the company expects to follow up and sell new products within 2 or
= 3 years. Thc~se are amino acid sweetener matter, anticancer agent (renchinan)
and t}ie lik~ wtiich are eventually expected to be larg~-scale co~nercial products.
- Contlnuously Risin~; Pace
'The intermediate rePort in S::t~~ember showed sales of 174.445 billion yen (an -
- increase of 7.4 percent over that of a year ago), recurring income of 11.083 _
billion yen (an increase of 11.3 percer_t over that of a year ago) and a profit -
, a:fter taxes oF 4.841 billion yen (an increase of 18.4 percent over that of a year -
= ago). The latter period is expected to undergo a smooth transition; for the
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current period, sales are expected to be 380 Uillion yen (an increase of 7 percent
- over that of a year ago) and a recurring income of 23 billion yen (an increase of
5 percent over that of a year ago) . _
Trend of Stock Price -
The price took an upward trend from a low of 510 yen in March to reach a hig~ of
794 yen in December. After that there was a slight buy-at-low-price trend, and the
prevailing price will be in the high range of 760 yen. For the timc being, the
' 700 yen level may continue, but with a good number of excellenC new items such as -
- amino acid sweetened matter, development of an anticancer agent, genetic engineering,
etc, when the occasion presents itself, it-~ po~ularity will rise. Watch for a -
lower price (to buy) with a target price of 800 yen. -
--Kyowa Halcko Kogyo Co Ltd -
High for y~ar 538 yen 1 December
Low for year 358 yen 11 March
_ Target price 600 yen -
Pioneer of Fermentation Chernistry .
With fermentation technology as the basis, engaged in diver�aification and production -
~ of spirits and alcoholic liquor, glutamic acid soda and me~ticinal products; attained
world ranking status in technology utilizing micro-organisms. Its latest develop-
ment which has drawn attention is the technology utilizing bioZogical functions.
Th~:~ is an opoch-making technology to make medicinal products sueh as interferon,
and foodsCuffs through genetic manipulation or mass culture of enzymes, and future
expectations are great.
Incre;ased Profits at a Narrow Range ~
The intermediate report which ended last June showed sales of 13,285 billion yen _
( an increase of 28.6 percent over that of a year ago), a recurring income of -
- 4.702 billion yen (an increase of 4.8 percent over that of a year ago) and a profit
after taxes of 1.843 billior. yen (an fncrease of 14.3 percent over that of a year
ago) . The latter half is expected to have a smooth transition, and for the current
period the prospect is for sales of 25 billion yen (an increase of 18 percent over
_ that of. a year ago) ar~d a recurring income of 8.9 billion yen (an increase of
4 percent over that of a year ago) .
Trend of Stock Price
- It took an upward trend fr~m a bottom of 358 yen in March last year to a high price
- of 53$ yen in December. Af ter that, there was a slight buy-at-low-price trend and
the prevaili.ng F~ice has been in the high price range hovering around 510 yen.
But with news value items such as genetic engineering, development of new medicines,
etc, which are in keeping with the times, a one step higher development is antici- -
~ pated. The stringency in supply and demand caused by foreign purchases and
institutional purchases is a plus factor. For the time being, the target price
- is 600 yen.
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~
Biotechnology Possesses Tremendous Attraction
Recently the iuarket has been flooded with such expressions as biomass (biological
. energy) and biote~hnology (biological engineering). The field ~f control of vital -
~ pfienomena by man belongs to genetic engineering, but it is said that the future of `
this field is extremely close to that of inedical science, agriculture and industry.
- According to the survey conducted by the American survey organ, "Chemical Marketing
Reporter," the sales of products based on the new technologies springing from ~
~ biomass and biotechnology will probably reach about 6 trillion yen on a world scale
by 1985. -
Japan has constructively ~egun these technolooies with the chemical industry taking
- the lead. Beginning with the establishment of a"biotechnology discussion group"
_ made up of t:op officials from the Big Five companies--Mitsubishi Chemical Industry
Co Ltd, ~umitomo Chemical Co Ltd, Mitsui Toatsu Chemicals Inc, Asahi Chenical Co
I.td, and Kyowa Hakko Kogyo Co Ltd--results are about to be realized at the research
- institutes of such companies as Kikkoman Shoyu Co Ltd and Ajinomoto Co Inc of the
~ foodstuff industry. '
_ Even MITI's Agen~~ for Industrial Science and Technology has its eye on establishing
a"System to ~~velop Industrial Base Technologies for the Next Generation" and it =
has clearly announced its objective of an investment of 31 billion yen for a
10-year plan beginning with FY81. With government and private industry working
together, the program has finally gotten underway. _
~ --Pioneer Electronic Corporatian _
High for year 2,500 yen 17 September
Low for year 1.,680 yen 10 March '
Tar~et price 3,000 yen =
~ n Pion~er in ~':~:;eo Disks [ v'D;
~ At I~r.esent the world's largest mar~ifacturer of VD. Also leading in software -
production, which is the key to its VD growth. Being sold already in 17 U.S.
cities; company expects to expand througheut the United States in 1981 with an
annual sale of 100,000 units totalling 8 billion yen. Although RCA system and VHD -
system products of other companies are e~ected to appear on the market, the
company at that time intends to sell its already papular brands.
- Continuously Rising, Pace
Dur.ing L-he p.~vio~~s pcriod which ended in September, sales totalled 224.633 billion
- yen (an increas~ of :'3.8 percent over that of the previous period ending in
= SepCember 1979), a recurring income of 28.816 billion yen (an increase of 27.3 _
percent over that oF tiie previous period ending in September 1979) and a profit -
after taxes oF 15.081 bil.lion yen (an increase of 24.2 percent over that of the =
prev.i~us period which ended in Septemher 1979). A continuous rise is expected
duri.ng this period with sales forecast a* 265 bil~ion yen (an increase of 18
~ percent over that of the previous period which ended in September 1980) and
recurrin~ income of 31 billion yen (an increase of 7 percent over that of the
previous peri.od which ended in September 1S80). ~
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Trend ~f Etock Price
From a low of 1,680 yen as bottom in March, it took on a rising trend to peak at ~
a high of 2,500 yen in September. After this, there was a slight buy-at-low
trend, but the prevailing price has remained in the high price range of around -
2,43C yen. The public offering to increase capitalization is taking place during
this period (payment by 24 December) and so a perceptible price movement cannot
= be expected; however, after this is over, a gradual increase in price will occur
with interest in the 25 percent free shares (expected during the latter part of
this period).
--Victor Company of Japan Ltd
_ High for year 2,870 yen 21 November
Low for year 1,860 yen 8 October
Target price 3,500 yen
A Leader in VD
~ It is tops in VTR s~les and has continued its fast growth with this item as its
mainstay. Its VTR sales jumped from 8.3 billion yen in FY76 to 170 billion yen
in this fiscal year, and the sales percentage will leap from 6 percent to a little
more than 50 percent. On the other hand, regarding VTR, the company's VHD system _
= is outstanding, and besides forming a joint corporation in the United States with
_ Matsushita Electrical Industrial Co Ltd, General Electric and other companies,
- it expects to sell its products during the latter half of 1981.
- Very Favorable Business Performance
~ The September intermediate report of this period showed sales of 166.093 billion
yen (an increase of 48.2 percent over that of the previous year), a recurring income
of 14.526 billion yen (an increase of 98.3 percent over that of the previous year) _
~ and a profit after taxes of 6.188 billion yen (an increase of 2.1 tiems that of
- the previous year). The performance of the latter half is expected to exceed that
of the first half, and the current period is expected to have sales o~f 355 billion -
- yen (an increase of 40 percent over that of the previcus period) and a recurring
income of 31 billion yen (an incredse of 60 percent over that of the previous
= per. i.odl ,
Movement of Stock Pra.ce
- ~ftei- t}ie stock dividend of shares sliding down in October, from a low of 1,860
J yen the price rose to a high of 2,870 yen during the latter part of November. The
- prevailing price, with a drop of 150 yen, is around 2,720 yen. However, with
- favorable performances, there will be increased dividends during this period and
with an anticipated 10 percent free shares in late September of 1981, a renewal of
- high prices is expected. With VD being readied as the growth product to succeed
VTR, for the time being the target price is 3,500 yen.
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Biggest Leader Possibly During the 1980's I
Dubbed "records wir.h visual output," video disks will finally be in production
this year. Alread:~ advance publicity has been committed and some of the makers
have already launched a sales campaign in the United States, but in Japan the
_ prevailing sentiment among those in the industry is for self-restraint until
uniformity of specifications is first established; none have reached the stage
of production as yet. ~
For the present, the three prevailing systems are the optical system (developed
- by the Phillip Co of Holland), CED system (needle type with grooves, developed by
- RCA Co of the United States) and the VHD system (grooveless, develop~d by Victor
Company of Japan, Ltd}, but the overwhelming majority of private businesses in ~
_ ~ Japan prefer the VHD system. Production of the optical system of Pioneer Electronic
Corp and the CED system of Sanyo Electric Co Ltd and Hitachi Ltd has already -
commenced, but they are not uniform with the VHD system, which is overwhelmingly � _
greater in terms of quantity, and so the strong possibility exists of the VHD
system being essentially referred to eventually as the "Japan specification."
VD requires not only the substance but also the manufacture of the software (the
, records) and pre~aration is essential. But a genuine coimmercial battle is expected
to be waged during 1981.
--Hieachi Ltd
_ High for year 353 yen 15 October
Low for year 231 yen 29 March -
Target price 400.yen
= Huge Sums Invested for Research ~
- A giant business cor.poration of worl~' s*_ature the likes of which are very few
even in .Tapan. Above all, it er.ce'_s in technology development strength and employs
about 7,000 technical experts under the motto of establishing independent techno-
- logies. It invests a sum reachinQ 100 billion yen annually for R&D. Backed by
- this gigantic R&D program, it is engaged in active deveZopment in the fields of -
_ electronics and ener~y, and among other things, it is peerless in semiconductor ~
applied technology.
Business Performance Is Excellent
The inter~nediate report in September of this period showed sales of 977.654 billion
_ yen (an increase of 17.4 percent over that of the previous year}, a recurring
income of 5' ~538 billion yen (an increase of 12.2 percent over that of the previous -
year) and a profic after taxes of 29.825 billion yen (an increase of 16.8 percent
over that of the previous year). Indications are that the performance of the
second half will surpass that of the first half. The forecast for the current _
period is an increase of 10 ~E.~~ent over that of the previous period in increased
revenues and an increase of 12 percent over that of the previous period in recurring
income.
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Trend of Stock Price
From a low of 231 yen in March, the price took an upward swing and in mid-October
with foreign purchases it reached a high of 353 yen. After that, adjustments
followed with enforcement of the new foreign exchange law and the current pric~
is around 310 yen. A high growth is expected to continue hereafter with emphasi5
on the highly profitable electronics field. With its excellent reputation abroad
as an international company, the renewal of high price described previously can
be er.pected. For the time being, the target price is 400 yen.
--Sharp Corporation
High for year 715 yen 30 October
Low f~r year S11 yen 27 March
= Target price 800 yen
- To Engage in Future Technologies
One of the giants in home electrical goods manufacturing. It has expanded its
_ operations in recent years to place emphasis on such industrial equipment as
- semiconductors and information terminals. It has an established reputation in
semiconductor applied technology and has been producing home electrical products
and unique office appliances. Besides these products, it is engaged in future
technologies such as sensors, optical co~nunication, display apparatus, semi-
conductors and lasers.
~ Favorable Business Performance
' The intermediate report in September of this period showed sales of 2~?6.528 billion
yen (an increase of 26 percent over that of the previous year), a recurring income
- of 14.279 billion yen (an increase of 18.9 percent over tY~at of the previous year)
and a profit after taxes of 8.02 billion yen (an increase of 28.2 percent over
that of the previous year). A smooth transition is anticipated for the second
- half, and for the current period sales of 495 billion yen (an increase of 25 percent
over that of. the previous period) and a recurring income of 30 b~llion yen (an ~
_ increase of 27 percent over that of the previous period) are expected.
Trend of Stock Price
- The price rose from a low of 511 yen in March to a high of 715 yen in late Octob er.
Ttie prevailing pric~ dropped less than SO yen to the 660 yen range. But the
company perfo rmance is sti11 good, and being a high technology stock, the price is
expected to rise again to the previous high. For the time being, the target price
is 800 yen, but buying by foreigners is expected to continue and so a long-range
- expectation of reaching 1,000 yen is not a mere dream.
Unlineited Growth Pc~tential Inherent in IC
Reportedly the semiconductor industry has a continuous growth potential of 20
percent per annum. Sin~e 1979, an imbalance in supply and demand has continued
- worldwide and the various manufacturers in Japan have continued to be in full
_ production.
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Generally, semiconductors are classified as discrete semiconductors, IC and LSI,
or as translstors and diodes. Recently discrete semiconductors have lagged, but
- on the other hand, the demand for IC and LSI has increased sharply and they are
about to attain a high growth average of 35 percent per annum. This is att~~ibutable
to an expansion of markets, with all sorts of products from home electrical
appliances to information equipment and automobile components centered around
_ watches, cameras, radio equipment, co~unications equipment and electonic computers.
It is confirmatory that this trend will continue hereafter because of their inherent
- unlimited growth potential.
- In a worldwide sense, because the United States is the birthplace of semiconductors,
it is slightly ahead of Japan insofar as such factors as basic technology and
manufacturing facilities are concerned, but from the standpoint of mass production
technology and quality, Japanese products are superior, and ~riginator America
has strongly felt the threat of Jananese inroadsa Japanese manufacturers who
feel that Japanese exports are only causing half-hearted excitement are competing
for a ctiangeover to engage in production abroad. This is the year for achievement
of this "international strategy."
- --Fuji.etsu Ltd
_ Higli for year 327 yen 1 December
Low for year 278 yen March
_ Target price 400 yen
All-Out Uecision on Robot Manufacturing
The company plans to diversify from sp~cial steel materials to bearings, tools,
machinery and industrial furnaces. A standout above all are the industrial robots.
- They are the forerunners of labor savi.ng, and interest in the demand for their use
by the industrial world has been increasing every day. To meet this expectation,
the "Uniman 6,~00 Series," which up ,.o now has had wide usages from handling to
welding, has been ir~proved. Tlie co~rpany has gone all out to produce robots with
new functions.
Favorable Business Performance
The previous period ended in November and figures are still being tabulated;
- however, besides tools, there were other items which produced profits, and increased
production was f.ully realized. Forecast are sales of 91 billion yen (an increase
of 26 percent over that of the previous period in 1979), recurring income of
4.6 b:illion yen (an increase of 56 percent over that of the previous period in
1979) and a pr.ofit after taxes of 2.2 billion yen (an increase of 75 percent over
that of the ~,revi^us period in 1979). A continuous increase for the present period
is predicted with s