Tokyo Stock Exchange Head Blasts Olympus

Joedif said:

As each day goes by I get the impression that the BOD is just going to dig in their heels and try to spin doctor this situation in hopes that it will just go away, except the noose just keeps getting tighter and tighter.
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Totally agree. There is no escaping this. Olympus's days are numbered. There is so much criminality here that it is simply staggering. That coupled with the massive debt of the company means survival is unlikely.

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http://fujifilmimages.aminus3.com/

When will people stop clinging to the old stereotypical notion that Japanese firms put loyalty to employees above all else? These are just a few examples of layoffs from a 5 minute Google search.

Panasonic will layoff 17,000 workers globally (updated)
http://www.engadget.com/2011/04/28/panasonic-to-layoff-40-000-workers/

Hitachi Layoffs Job Cut: fires 7000 employees

http://www.finance-trading-times.com/2009/01/hitachi-layoffs-job-cut-fires-7000.html

Japan’s Latest Woes Include Layoffs at NEC
http://www.nytimes.com/2009/01/31/business/worldbusiness/31honda.html

Sony plans to close two television factories and shed 2,000 jobs in its home country of Japan
http://news.cnet.com/8301-1001_3-10147282-92.html

MichaelKJ said:

When will people stop clinging to the old stereotypical notion that Japanese firms put loyalty to employees above all else? These are just a few examples of layoffs from a 5 minute Google search.

Panasonic will layoff 17,000 workers globally (updated)
http://www.engadget.com/2011/04/28/panasonic-to-layoff-40-000-workers/

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...or about 4% of a 380,000 global workforce over the next two years...

MichaelKJ said:

Hitachi Layoffs Job Cut: fires 7000 employees

http://www.finance-trading-times.com/2009/01/hitachi-layoffs-job-cut-fires-7000.html

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Out of a workforce that is probably nearly as large..

MichaelKJ said:

Japan’s Latest Woes Include Layoffs at NEC
http://www.nytimes.com/2009/01/31/business/worldbusiness/31honda.html

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About 14% of its 150,000 global workforce, about half of whom will be permanent workers. And, as a long time employment counsellor, I actually had a client who went through a past Hitachi, saskatoon, Canada lay-off, part of which were long notice and attempts to transfer, counseling and excellent references, a very generous severance package. And three years later, they looked far and wide to find and rehire him. That is a first-hand, personal experience.

MichaelKJ said:

Sony plans to close two television factories and shed 2,000 jobs in its home country of Japan
http://news.cnet.com/8301-1001_3-10147282-92.html

Click to expand...

Don't know how other Japanese corporations do, but a Japanese co-worker and several other Japanese acquaintances I have had over the years have all told me that such "old" values as two sided employer-employee loyalty are still much more important in Japan than they are in Canada, and even more so the US.

Japan did have a huge and disastrous earthquake, and this, as well as the global recession is cited as a major factor in all these layoffs.

And let's compare this to the US:

"In September, employers took 1,495 mass layoff actions involving 153,229 workers."

http://www.bls.gov/mls/

However it is true that Olympus stated some months ago that its operations were little affected by the earthquakes. The idiot BOD seems to have created one of its own!
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erichK
saskatoon, canada

Photography is a small voice, at best, but sometimes one photograph, or a group of them, can lure our sense of awareness.

• W. Eugene Smith, Dec 30, 1918 to Oct 15, 1978.

http://erichk.zenfolio.com/

http://www.fototime.com/inv/7F3D846BCD301F3

underwater photos:
http://www.scubaboard.com/gallery/showgallery.php/cat/500/ppuser/5567

Maybe not CEO, but on the BOD at least

A voice to keep Olympus honest... he's proven a willingness to dig for the dirt.. could be useful in restoring stockholder & creditor trust.

But perhaps not in full control, where he would be able to lop off whole divisions for short term gain.
--
Art P
"I am a creature of contrast,
of light and shadow.
I live where the two play together,
I thrive on the conflict"

I agree that Japan remains different from the West in many of its business practices. However, times have changed and the old stereotypes are slowly giving way to the norms of the global marketplace.

so now Japan's Prime Minister weighs in ...

http://www.ft.com/intl/cms/s/0/f77522ac-02ca-11e1-899a-00144feabdc0.html?ftcamp=rss#axzz1cIJILd1e

that ought to make for an interesting conversation at Oly's next BOD meeting.

--
Jeff

http://www.flickr.com/photos/jck_photos/sets/

This week will be very interesting!

...that the 92 year old, 33,000 employee manufacturing organization Olympus will be able to continue producing and selling products. Certainly, the whole company has been burdened with a huge and an even bigger body blow to its reputation.

It will be difficult, and will require vision and innovation.. Even the competition has had to admit - usually through emulation - that Olympus is a leader in developing new concepts and technologies, from an effective dustbuster through LV to EVIL cameras.

Does anyone here remember how the German Chancellor said, during the beginnings of the 2008 recession, that Germany would pull through because of the real productive strength of its economy? I am hoping that the same will prove true of Olympus.

Of course they will have to make major changes to their governance, starting with the firing of some, probably most directors. However this does not mean that they should reinstall Woodford. The style of management he apparentlypracticed in England and Europe would likely finish the battered corporation off!
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erichK
saskatoon, canada

Photography is a small voice, at best, but sometimes one photograph, or a group of them, can lure our sense of awareness.

• W. Eugene Smith, Dec 30, 1918 to Oct 15, 1978.

http://erichk.zenfolio.com/

http://www.fototime.com/inv/7F3D846BCD301F3

underwater photos:
http://www.scubaboard.com/gallery/showgallery.php/cat/500/ppuser/5567

I don't know if this has been posted

http://dealbook.nytimes.com/2011/10/23/2-japanese-bankers-at-heart-of-olympus-fee-inquiry/

Does make it look like the greed of a couple of skilled financial manipulators and the incredible stupidity of the Olympus BOD may be at the root of this. Of course the huge amount of money dos suggest that that river may go further after Sagawa and partner drank deeply from it. To settle gambling debts? To some numbered accounts?

--
erichK
saskatoon, canada

Photography is a small voice, at best, but sometimes one photograph, or a group of them, can lure our sense of awareness.

• W. Eugene Smith, Dec 30, 1918 to Oct 15, 1978.

http://erichk.zenfolio.com/

http://www.fototime.com/inv/7F3D846BCD301F3

underwater photos:
http://www.scubaboard.com/gallery/showgallery.php/cat/500/ppuser/5567

The comments by Mr Noda, made in an interview with the Financial Times, highlight growing concern among Japanese policymakers and business leaders that the scandal will be seen as symptomatic of wider problems of governance and regulation. “What worries me is that it will be a problem if people take the events at this one Japanese company and generalise from that to say Japan is a country that [does not follow] the rules of capitalism,” Mr Noda said. “Japanese society is not that kind of society.

http://www.ft.com/intl/cms/s/0/f77522ac-02ca-11e1-899a-00144feabdc0.html#axzz1cK6E1KsG

To be criticized publicly by the Prime Minister has to be devastating for Olympus.

he can say what he likes,

but perhaps it would have been better if Japan's own institutions would have acted back when this first went public (press) which was way before Woodford got himself into it.

and no that isnt an excuse

if people have been involved in corruption they should screw them to the wall, for they are the ones that have caused all this.

But i get the feeling they wont

--
Riley

any similarity to persons living or dead is coincidental and unintended

I think getting rid of the BOD, and reinstalling Woodford would result in a case of ( from the frying pan into the fire). The only way out of this is full transparency! Just thinking if they wait long enough, it will just blow over...isn't going to happen!

What Olympus does behind closed doors has never been, or never will be, any of my business...

MichaelKJ said:

The comments by Mr Noda, made in an interview with the Financial Times, highlight growing concern among Japanese policymakers and business leaders that the scandal will be seen as symptomatic of wider problems of governance and regulation. “What worries me is that it will be a problem if people take the events at this one Japanese company and generalise from that to say Japan is a country that [does not follow] the rules of capitalism,” Mr Noda said. “Japanese society is not that kind of society.

http://www.ft.com/intl/cms/s/0/f77522ac-02ca-11e1-899a-00144feabdc0.html#axzz1cK6E1KsG

To be criticized publicly by the Prime Minister has to be devastating for Olympus.

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They just have to wait for the next Prime Minister.

Japan goes through them quite quickly. (Certainly far faster than Olympus goes through directors, with the exception of some possibly extortionate ones...)

As for:
"Japanese society is not that kind of society."
Well, yes. Yes it is. At least in business terms.

(Assuming that he means "western rules of capitalism", when those rules are applied -- which they seldom are, even if they exist on paper and in law, and then only in inverse proportion to the size of the corporation that is the applyee, unless a larger corporation is seeking to have the "rules" applied and has had the foresight to buy a sufficient number of politicians... Actually, "Japanese capitalism" doesn't look too bad. )

(I'm feeling a little admonished from comments in another thread. If you're not interested in Oly's business mess, please read no further.)

If you want a head scratcher, look at Oly's stock performance the last few days -- http://www.google.com/finance?cid=669682 . See anything unusual?

The intraday volatility all but disappeared overnight. The last few trading days began with market makers working hard to establish an opening price, as was especially obvious on Friday. Also, there have been reports of Japanese regulators wanting to slow down short selling on margin. Either those efforts have worked remarkably well, or someone with deep pockets is working hard to stabilize Oly stock.

At current prices, Oly's dividend gives investors a 2.5% return on investment, which is decent and about the right risk premium compared to interest rates in Japan. Putting these pieces together, maybe the Oly's market correction is over for now, or at least until the next bit of major news.

We'll see over the next few days. A week ago I thought Oly was in for a huge fall. But this is starting to make sense in light of the larger Japanese economy. Ironically, I wonder if the global attention Oly has received lead to more investment rather than chase it away.

Oly still has a governance crisis on its hands, to be sure.

--
Jeff

http://www.flickr.com/photos/jck_photos/sets/

erichK said:

I don't know if this has been posted

http://dealbook.nytimes.com/2011/10/23/2-japanese-bankers-at-heart-of-olympus-fee-inquiry/

Does make it look like the greed of a couple of skilled financial manipulators and the incredible stupidity of the Olympus BOD may be at the root of this. Of course the huge amount of money dos suggest that that river may go further after Sagawa and partner drank deeply from it. To settle gambling debts? To some numbered accounts?

Click to expand...

Likely the same questions the FBI and SEC started asking last week.

erichK said:

--
erichK
saskatoon, canada

Photography is a small voice, at best, but sometimes one photograph, or a group of them, can lure our sense of awareness.

• W. Eugene Smith, Dec 30, 1918 to Oct 15, 1978.

http://erichk.zenfolio.com/

http://www.fototime.com/inv/7F3D846BCD301F3

underwater photos:
http://www.scubaboard.com/gallery/showgallery.php/cat/500/ppuser/5567

Click to expand...

--
Jeff

http://www.flickr.com/photos/jck_photos/sets/
http://jeffkantor.zenfolio.com/

Jeff said:

(I'm feeling a little admonished from comments in another thread. If you're not interested in Oly's business mess, please read no further.)

Click to expand...

Jeff... I saw that thread too... you have absolutely no reason to need to apologize nor do you need a disclaimer above your posts. Your posts on this subject have been quite level-headed and filled with facts and concise explanations about our world's stock markets.

Keep on posting!

Patrick : )

The comments section is also interesting:

Data Miner commented:

My take is this. Olympus racked up several hundred million dollars of loss in security investment. Instead of reporting that loss honestly and embarrassing themselves, it inflated the purchase price of the British company by that amount and reported the inflated portion as advisory fees. Basically, Olympus booked inflated assets and erased loss. The inflated portion was reported as advisory fees but may not be actually paid. The two advisers were helping Olympus in its effort for window dressing and were paid hadsopmely, though, much less.

PPP commented:

Having worked for Olympus in several different countries, I am not surprised at all. The Gyrus acquisition was terrible, both in conception and implementation. The medical device business is keeping the company alive because of some very good products, and despite of Olympus management. The once dominant microscope division is getting overtaken by the big german optics companies due to years of complacency in product R&D, and the problems of the camera division are well documented in the article. Every Olympus office I worked in was in thrall of and in fear of Japanese HQ, and management culture clashes were the norm. Very glad to be out of there, and another interested observer of the rapid decline of a once mighty company!

Jeff said:

erichK said:

I don't know if this has been posted

http://dealbook.nytimes.com/2011/10/23/2-japanese-bankers-at-heart-of-olympus-fee-inquiry/

Does make it look like the greed of a couple of skilled financial manipulators and the incredible stupidity of the Olympus BOD may be at the root of this. Of course the huge amount of money dos suggest that that river may go further after Sagawa and partner drank deeply from it. To settle gambling debts? To some numbered accounts?

Click to expand...

Likely the same questions the FBI and SEC started asking last week.

Click to expand...

I hope its wider than that

there is the problem that they paid way too much for Gyrus. Makes you think there's a double ended connection. That not only were the negotiating fees quite overboard, but the quality of negotiation considering the worth assets they bought was also out of kilter.

The point is why would that happen, somehow yet more money was squandered off via the sale too; later to be written off.

the question again is 'who had something to gain'

--
Riley

any similarity to persons living or dead is coincidental and unintended

A 2.5% return is not that great at all given the amount of risk and volatility in the company.