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Toshiba frequently sold the family bottom, why the electronics giant fell from the altar?

The once glorious era

  Toshiba recently officially announced that its air conditioning subsidiary Toshiba Carrier, for 55% of the issued shares, will be sold to joint venture partner and U.S. air conditioning company Carrier Air Conditioning (Carrier) for approximately 100 billion yen. Toshiba said it will remove Toshiba Carrier from the consolidated financial statements, but will continue to hold a 5% stake and continue to develop and sell Toshiba-branded air conditioning equipment. It is expected to be included in non-operating income in fiscal 2022 (ending March 2023), and Toshiba said “the exact value is being evaluated in detail.

Toshiba’s subsidiary Toshiba Carrier sold to its joint venture partner, U.S. air conditioning company Carrier

  This is not the first time Toshiba has sold its projects, a century-old business giant, the business is falling apart and needs to sell itself to renew its life, to this point, there are many reasons. Back in history, Toshiba’s first company was an industrial manufacturing house founded by Hisashige Tanaka in Tokyo in 1875. 1882, Tanaka’s successor, Daikichi Tanaka, named it Tanaka Manufacturing, and later in 1904, Shibaura Manufacturing Co. At the beginning of the 20th century, Shibaura Manufacturing was mainly engaged in the manufacture of heavy-duty machinery and equipment for domestic use, and grew to become a well-known industrial plant.
  The second company, originally known as Hakusensha, was founded in Tokyo in 1890 by Ichisuke Fujioka and Shoichi Miyoshi as the first company in Japan to make table lamps with white-hot electric bulbs. In 1899, the company changed its name to Tokyo Electric.
  In 1939, Tokyo Electric merged with Shibaura Works to form Tokyo Shibaura Electric Co. The new name is the initials of the two companies, and the English name is a combination of the Japanese phonetic alphabet: To for the Japanese pronunciation of East and Shiba for Shiba.
  Toshiba expanded rapidly by acquiring other companies, and from 1940 to 1950 Toshiba purchased many heavy machinery manufacturers and industrial-related companies. After 1970, however, Toshiba began to form subsidiaries to separate the acquired companies from its core industries. These subsidiaries included Toshiba EMI (1960), Toshiba Electronics (1974), Toshiba Chemical (1974), Toshiba Lighting Technology (1989), Toshiba America Information Systems (1989), and Toshiba Handling Equipment (1999).
  Toshiba was the first Japanese manufacturer of many products, such as radar, automotive light bulbs, transistorized TVs and microwave ovens, color video phones, Japanese word processors, notebook computers (also the first in the world in 1986), DVDs, and HD DVDs, which underscore the technological sophistication of the king of semiconductors.

Toshiba’s flash memory factory in Yokkaichi, central Japan
The turning point of the “Toshiba Incident” in Batumi

  Toshiba’s decline began in the 1980s. At that time, machine tools were the symbol of a country’s manufacturing level, and advanced CNC machining equipment was an important strategic material for any country! For a long time, the United States as the leader of the developed countries of Western industry, has been the CNC machine tools to China, the former Soviet Union and other rising industrial camp to implement a shameless embargo.
  However, the manufacturing industry has occurred a “beaver for a prince” event. Japan Toshiba Machinery Company on the back of the “Paris Coordinating Committee” to the former Soviet Union exported high-precision processing of marine propeller CNC machine tools – four TDP-70 and TDP-110 boring and milling machine, which is a two-axis linkage of CNC machine tools, mainly for the production of hydroelectric equipment. This equipment is not listed in the export control list prepared by “Batumi”, which seems to be a legal procedure.
  The official name of Batumi was the “Coordinating Committee for Export Control”, established secretly in 1949 at the initiative of the United States, with the developed countries of the Western camp as members, to restrict the export of strategic goods and high technology from member countries to socialist countries. It is often referred to as the “Paris Coordinating Committee” because of its headquarters in Paris.
  However, according to the information available to intelligence officers, the Soviet Union did not in fact acquire these two types of equipment, but rather four large nine-axis, five-linkage CNC propeller milling machines. It could complete the mathematical modeling and high-precision machining of complex surfaces through a set of complex and complete algorithms and precise control systems, which were ideal for machining the high-performance propellers needed for nuclear submarines. This was a highly sophisticated technology in those days when control theory and technology were not so mature, not to mention in the Soviet Union, but also in the Western world.
  The deal, which violated the Cold War-era CoCom agreement, set back the U.S. and Japanese relations over the matter, culminating in the indictment and arrest of two senior Toshiba managers and the imposition of fines and sanctions by both countries.
Nuclear Power Crisis and Financial Fraud

  Time came in 2008, after the global financial crisis, Toshiba suffered a huge impact and the board of directors made a decision to appoint 59-year-old Norio Sasaki as president and CEO, who previously served as senior executive vice president and nuclear energy expert. He has 37 years of experience in Toshiba’s power generation business and was the person responsible for leading the completion of the acquisition of Westinghouse Electric in the United States.
  Zetuo Sasaki did an excellent job in nuclear power, and his performance started to rise. The 2011 Fukushima earthquake in Japan, the accident is the Tokyo Electric Power Company Fukushima Daiichi nuclear power plant, the nuclear power plant equipment is mostly Toshiba products, Japanese nuclear power, including Toshiba in the whole world’s nuclear power image is in ruins. Under pressure, many countries cancelled their previously agreed orders with Toshiba and terminated the construction of nuclear power plants. Toshiba was dragged into the abyss, not only unable to recover its previous costs, but also facing a series of years of losses. Before that, no one could have predicted that the nuclear power plant, which was once favored, would become Toshiba’s nightmare.
  In 2015, Toshiba was exposed to financial fraud, after restoring the financial report, the real situation will be shown to the public, the data is disastrous. According to statistics, the total shortfall of the fraud from 2008 to 2014 was as high as 224.8 billion yen. To quell the impact of the incident, three presidents and eight directors resigned en masse before and after. But despite this, Toshiba was still fined 7.4 billion yen by the government, the stock price is all the way down, shrinking by about 40%.
Frequent sale of the family’s bottom, where is the future?

  In order to survive, Toshiba began to sell business. 2010 onwards, Toshiba in China sales of color TV has basically entrusted TCL OEM; the end of 2013, Toshiba in Dalian color TV plant shut down; 2016, the United States acquired Toshiba white TV business main Toshiba Life Electric Co. 80.1% stake; 2018, Hisense acquired Toshiba’s Toshiba Image Solutions (TVS) In 2018, Hisense acquired Toshiba’s 40-year global brand license for Toshiba TV; in 2018, Toshiba sold its TV and computer business, and by 2020, Toshiba, which had built the first laptop computer, completely withdrew from the market.

Once the street Toshiba laptop advertising

Toshiba in Sam’s shopping mall is now under the production and labeling of Hisense or TCL

  After continuously downsizing its consumer electronics and semiconductor businesses, Toshiba announced that it would focus its funds on developing businesses such as storage chips and energy. In addition to natural disasters, Toshiba’s defeat is related to the old-fashioned concept of certain Japanese companies, slow response to the end market of consumer electronics products, resulting in slow product iteration and development, lagging far behind Chinese and Korean consumer electronics companies and losing market dominance. But for the typical Japanese electronics giant Toshiba, the thin dead camel is bigger than the horse, its advantage is the high level of manufacturing technology, in recent years in generators, elevators, energy, storage and other areas of high technology, high profitability frequently, and did not reduce business in China. Compressing the lower-margin end-consumer business and focusing on the more adept and higher-margin corporate business has been an important transformation direction for Toshiba in recent years.

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