Future of Japanese Electronics Brand TOSHIBA Looking Increasingly “In Doubt”


In the year 1875 at Japan, seven years into the Meiji period of early industrialization and during the administration of US President Ulysses S. Grant, an engineer educated during the preceding Edo Period named Hisashige Tanaka established a company that made equipment for telegraph communication, the Tanaka Seisakusho (T. Engineering Works). It became partly owned by General Electric, then was acquired by Mitsui Bank and renamed Shibaura Seisakusho. In 1939 it merged with light bulb manufacturer Tokyo Denki (T. Electric) to form Tokyo Shibaura Electric Company; the name was eventually shortened to a rather familiar brand today and in recent decades: Toshiba. This electronics company was one of the Japanese companies that took the US and the world by storm since the late 20th Century, producing color TVs and laptop computers.

Now according to USA Today, those halcyon days are coming to a close for the now 142-year grand old man of Japanese firms. On a financial report they filed Tuesday April 11, the upper echelons of Toshiba have begun expressing “substantial doubt” regarding their ability to continue operating as a “going [business] concern”.

Their financial woes could be traced to their hard-fought 2006 acquisition of the US nuclear power firm Westinghouse Electric LLC, a potential moneymaker that turned into a millstone around the company’s neck following the 2011 Tohoku earthquake and tsunami, which soured Japanese demand for nuclear power after the Fukushima Daiichi plant disaster. Westinghouse has since filed for bankruptcy last March 29 after cost overruns and delays piled up with the power plants they were developing stateside.

As a result Toshiba has been struck with a painful $4.8 billion loss in the first nine months of Japan’s fiscal year, with dire predictions of the damages ballooning into $9.2 billion by the end of it. Their credit rating has suffered, a construction license contract with the Japanese government is in danger of being called off, and the firm is on the verge of having its stock removed from the list in the Tokyo Stock Exchange.

During the 1980s Toshiba and the rest of Japan’s “Big Six” – Sony, NEC, Mitsubishi, Fujitsu and Sharp – dominated electronics markets with their competitively-priced high-quality “knock-off” appliances and gadgets. With the passing of years however some of these companies were overwhelmed by emerging competition from the US, South Korea and China that went for innovation rather than copying. This is illustrated by how a lot of people got their start with consumer electronics by owning Toshiba TVs and the T1100 (the “first mass-market laptop in the world”). Now these same people have moved on to Apple iPhones and Samsung TVs.

The end for Toshiba is especially poignant, as unlike other electronics manufacturers that measure years of manufacture between months and years, this company has been active for a century and a half. Should it fold, there won’t be any other like it ever again.

Photo courtesy of fortune.com

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