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TV Show Mirrors a Japanese Battery Maker’s Bind TV Show Mirrors a Japanese Battery Maker’s Bind
(about 4 hours later)
TOKYO — For many viewers in Japan, the plot of the television series “Made in Japan” was all too real: a struggling manufacturer, Takumi Electronics, turns to advanced lithium-ion batteries to reverse its ailing fortunes.TOKYO — For many viewers in Japan, the plot of the television series “Made in Japan” was all too real: a struggling manufacturer, Takumi Electronics, turns to advanced lithium-ion batteries to reverse its ailing fortunes.
With the real-life manufacturer of Boeing’s Japan-made batteries under intense scrutiny, the three-part series, which was carried by the national broadcaster NHK and showed its finale on Saturday, came at an angst-ridden time, and underscored the hopes that Japan had pinned on technologies like lithium-ion batteries. With the real-life manufacturer of Boeing’s Japan-made batteries under intense scrutiny, the three-part series, which was carried by the public broadcaster NHK and showed its finale on Saturday, came at an angst-ridden time, and underscored the hopes that Japan had pinned on technologies like lithium-ion batteries.
As portrayed in the series, Takumi Electronics might as well be Japan Inc. itself. Takumi’s lead in televisions and mobile phones has been eclipsed by more nimble upstarts in South Korea and China, echoing the fate of Japanese technology giants like Sony and Panasonic. The only hope the company has now lies in its advanced battery technology.As portrayed in the series, Takumi Electronics might as well be Japan Inc. itself. Takumi’s lead in televisions and mobile phones has been eclipsed by more nimble upstarts in South Korea and China, echoing the fate of Japanese technology giants like Sony and Panasonic. The only hope the company has now lies in its advanced battery technology.
“These lithium-ion batteries took us years to develop, and our technological advantage won’t waver so easily,” the Takumi Electronics president says defiantly to reporters after yet another disastrous earnings presentation. “We are betting on big growth in electric cars, and we are about to clinch some big deals.”“These lithium-ion batteries took us years to develop, and our technological advantage won’t waver so easily,” the Takumi Electronics president says defiantly to reporters after yet another disastrous earnings presentation. “We are betting on big growth in electric cars, and we are about to clinch some big deals.”
GS Yuasa, the real-life maker of Boeing’s lithium-ion batteries, made a similar bet, one that has not yet paid off.GS Yuasa, the real-life maker of Boeing’s lithium-ion batteries, made a similar bet, one that has not yet paid off.
Fire and smoke in batteries aboard Boeing’s next-generation Dreamliner have led to the grounding of all 50 of the planes while authorities around the world try to figure out the cause. On Thursday, the head of the United States National Transportation Safety Board, Deborah Hersman, said the fire seemed to have originated in one of the batteries, and faulted aviation officials for not anticipating the risks.Fire and smoke in batteries aboard Boeing’s next-generation Dreamliner have led to the grounding of all 50 of the planes while authorities around the world try to figure out the cause. On Thursday, the head of the United States National Transportation Safety Board, Deborah Hersman, said the fire seemed to have originated in one of the batteries, and faulted aviation officials for not anticipating the risks.
On Saturday and again on Monday, Boeing crews took a 787 on test flights to monitor the performance of the lithium-ion batteries. Both flights, Boeing said, were uneventful.On Saturday and again on Monday, Boeing crews took a 787 on test flights to monitor the performance of the lithium-ion batteries. Both flights, Boeing said, were uneventful.
The recent troubles are hardly what GS Yuasa could have envisioned when it started making the batteries. In 2009, it started supplying the batteries for Mitsubishi Motors’ i-Miev electric vehicles, billed as the first mass-produced, fully electric car. Everything seemed to go well at the beginning. GS Yuasa executives said in interviews three years ago that the company was struggling to keep up with inquiries pouring in from automakers.The recent troubles are hardly what GS Yuasa could have envisioned when it started making the batteries. In 2009, it started supplying the batteries for Mitsubishi Motors’ i-Miev electric vehicles, billed as the first mass-produced, fully electric car. Everything seemed to go well at the beginning. GS Yuasa executives said in interviews three years ago that the company was struggling to keep up with inquiries pouring in from automakers.
But demand for the electric vehicles has not taken off. Last month, Mitsubishi Motors sold just 137 i-Mievs, and GS Yuasa’s factories have been running at less than capacity.But demand for the electric vehicles has not taken off. Last month, Mitsubishi Motors sold just 137 i-Mievs, and GS Yuasa’s factories have been running at less than capacity.
That has marred plans at the company, which had hoped its lithium-ion technology would soon replace its older lead-acid batteries as its core business. GS Yuasa has still not turned a profit on its lithium-ion batteries, losing 3.26 billion yen, about $35 million, on the business last year despite directing the bulk of its capital investment to the technology, according to its annual report.That has marred plans at the company, which had hoped its lithium-ion technology would soon replace its older lead-acid batteries as its core business. GS Yuasa has still not turned a profit on its lithium-ion batteries, losing 3.26 billion yen, about $35 million, on the business last year despite directing the bulk of its capital investment to the technology, according to its annual report.
Enter Boeing and its next-generation 787 jet, which relies more than ever on electric systems and the batteries that power them. GS Yuasa won a contract in 2005 to supply Boeing with lithium-ion batteries through the French aviation electronics company Thales, and GS Yuasa has promoted aviation as a growth area that could make up for the disappointing electric vehicle market.Enter Boeing and its next-generation 787 jet, which relies more than ever on electric systems and the batteries that power them. GS Yuasa won a contract in 2005 to supply Boeing with lithium-ion batteries through the French aviation electronics company Thales, and GS Yuasa has promoted aviation as a growth area that could make up for the disappointing electric vehicle market.
GS Yuasa’s president, Makoto Yoda, had high ambitions, telling Kyodo News in late 2011 that he wanted to double sales of lithium-ion batteries to clients other than automakers within five years. By “building on our track record in supplying Boeing,” he said, the company aimed to open up new uses for the battery technology, including small jets and helicopters.GS Yuasa’s president, Makoto Yoda, had high ambitions, telling Kyodo News in late 2011 that he wanted to double sales of lithium-ion batteries to clients other than automakers within five years. By “building on our track record in supplying Boeing,” he said, the company aimed to open up new uses for the battery technology, including small jets and helicopters.
Advanced batteries are also crucial to wider Japanese industry at a time when the country remains stunned by how swiftly its once-dominant makers of semiconductors and flat-panel televisions have been overtaken by South Korean rivals. The culprit is commoditization, which made Japan’s prized technology indistinguishable from everyone else’s.Advanced batteries are also crucial to wider Japanese industry at a time when the country remains stunned by how swiftly its once-dominant makers of semiconductors and flat-panel televisions have been overtaken by South Korean rivals. The culprit is commoditization, which made Japan’s prized technology indistinguishable from everyone else’s.
There is already fear that Japan’s prized lithium-ion battery technology could go the same way.There is already fear that Japan’s prized lithium-ion battery technology could go the same way.
Though Japan was long the world’s dominant supplier of lithium-ion technology, led by Sony’s first commercial lithium-ion batteries in 1991, rivals have largely usurped Japan’s lead. The catch-up has been especially swift in smaller lithium-ion batteries, which have become increasingly common.Though Japan was long the world’s dominant supplier of lithium-ion technology, led by Sony’s first commercial lithium-ion batteries in 1991, rivals have largely usurped Japan’s lead. The catch-up has been especially swift in smaller lithium-ion batteries, which have become increasingly common.
In 2011, Japan’s global share had tumbled to about 35 percent, from more than 90 percent a decade earlier, according to Techno Systems Research, a market research company based in Tokyo. Over the same period, South Korean manufacturers overtook Japan with an almost 40 percent global share.In 2011, Japan’s global share had tumbled to about 35 percent, from more than 90 percent a decade earlier, according to Techno Systems Research, a market research company based in Tokyo. Over the same period, South Korean manufacturers overtook Japan with an almost 40 percent global share.
Still, Japan is determined to maintain its lead on larger lithium-ion batteries for cars and planes, which manufacturers here stress are more difficult to design and manufacture, and require the intense attention to quality and safety on which Japanese engineers pride themselves.Still, Japan is determined to maintain its lead on larger lithium-ion batteries for cars and planes, which manufacturers here stress are more difficult to design and manufacture, and require the intense attention to quality and safety on which Japanese engineers pride themselves.
“Japan still has strength in larger lithium-ion batteries; that was supposed to be Japan’s strength,” said Kiyoshi Kanamura, a professor in applied chemistry at Tokyo Metropolitan University, who previously codeveloped lithium-ion batteries with GS Yuasa. “That’s why the Boeing battery fires are so shocking.”“Japan still has strength in larger lithium-ion batteries; that was supposed to be Japan’s strength,” said Kiyoshi Kanamura, a professor in applied chemistry at Tokyo Metropolitan University, who previously codeveloped lithium-ion batteries with GS Yuasa. “That’s why the Boeing battery fires are so shocking.”
The spotlight cast on GS Yuasa’s batteries has been harsh. One GS Yuasa-made battery burst into flames onboard a parked 787 at Boston’s Logan Airport last month, and another spewed smoke on a different 787 jet in Japan just 10 days later, forcing an emergency landing.The spotlight cast on GS Yuasa’s batteries has been harsh. One GS Yuasa-made battery burst into flames onboard a parked 787 at Boston’s Logan Airport last month, and another spewed smoke on a different 787 jet in Japan just 10 days later, forcing an emergency landing.
Late last month, Japanese officials said that on-site inspections at the factory that made the Boeing batteries, at GS Yuasa’s headquarters in Kyoto, had uncovered no clues as to what may have gone wrong.Late last month, Japanese officials said that on-site inspections at the factory that made the Boeing batteries, at GS Yuasa’s headquarters in Kyoto, had uncovered no clues as to what may have gone wrong.
“Helping to build the 787 was supposed to demonstrate how Japan still leads the world in advanced, reliable technology,” said Ichiro Takano, chief executive at TechnoAssociates, a consulting company based in Tokyo with expertise in batteries and renewable energy. “But that will backfire if we don’t get to the bottom of this quickly.” GS Yuasa has long enjoyed a close relationship with the government. Genzo Shimadzu, the founder of the company that eventually became GS Yuasa, developed Japan’s first lead batteries in 1895 on behalf of Kyoto Imperial University.“Helping to build the 787 was supposed to demonstrate how Japan still leads the world in advanced, reliable technology,” said Ichiro Takano, chief executive at TechnoAssociates, a consulting company based in Tokyo with expertise in batteries and renewable energy. “But that will backfire if we don’t get to the bottom of this quickly.” GS Yuasa has long enjoyed a close relationship with the government. Genzo Shimadzu, the founder of the company that eventually became GS Yuasa, developed Japan’s first lead batteries in 1895 on behalf of Kyoto Imperial University.
Those batteries, called GS batteries after their inventor, were used on battleships in the Russo-Japanese War, helping to power transmitters that allowed the ships to stay in contact. The Japanese handily defeated the Russians at sea in 1905.Those batteries, called GS batteries after their inventor, were used on battleships in the Russo-Japanese War, helping to power transmitters that allowed the ships to stay in contact. The Japanese handily defeated the Russians at sea in 1905.
GS Yuasa has received almost 17 billion yen (around $183 million) in Japanese government subsidies over the last three years. Through a program begun in 2009, Japan’s Ministry of Economy, Trade and Industry has made 140 billion yen, or $1.5 billion, in direct subsidies to green technology companies, most of that to lithium-ion makers deemed to be capable of competing overseas.GS Yuasa has received almost 17 billion yen (around $183 million) in Japanese government subsidies over the last three years. Through a program begun in 2009, Japan’s Ministry of Economy, Trade and Industry has made 140 billion yen, or $1.5 billion, in direct subsidies to green technology companies, most of that to lithium-ion makers deemed to be capable of competing overseas.
For now, GS Yuasa has stressed that it does not expect any immediate impact on its sales or reputation from the 787 grounding. According to company executives, its sales of the lithium-ion batteries to Boeing have still only come to several hundred million yen, though sales are set to grow under GS Yuasa’s multiyear contract with Thales and Boeing.For now, GS Yuasa has stressed that it does not expect any immediate impact on its sales or reputation from the 787 grounding. According to company executives, its sales of the lithium-ion batteries to Boeing have still only come to several hundred million yen, though sales are set to grow under GS Yuasa’s multiyear contract with Thales and Boeing.
Last week, the company said that net profit for the nine months through December dropped slightly to 5.52 billion yen from 5.73 billion yen a year earlier. But it kept its full-year forecasts unchanged, at 8 billion yen net profit on 288 billion yen in sales.Last week, the company said that net profit for the nine months through December dropped slightly to 5.52 billion yen from 5.73 billion yen a year earlier. But it kept its full-year forecasts unchanged, at 8 billion yen net profit on 288 billion yen in sales.
“At this point, we have not sensed any damage to our reputation,” Toshiyuki Nakagawa, a GS Yuasa director, told reporters in Kyoto.“At this point, we have not sensed any damage to our reputation,” Toshiyuki Nakagawa, a GS Yuasa director, told reporters in Kyoto.
A reputational blow is what Takumi Electronics, the fictional manufacturer in the drama series, also hopes to avoid as it teeters on losing its lithium-ion battery deal to a Chinese rival, a big embarrassment for any Japanese company.A reputational blow is what Takumi Electronics, the fictional manufacturer in the drama series, also hopes to avoid as it teeters on losing its lithium-ion battery deal to a Chinese rival, a big embarrassment for any Japanese company.
In the end, the Chinese manufacturer loses its deal after a top engineer — one it recruited from Takumi — reveals that the batteries, as they stand, pose a fire risk. And in a last-minute deal, the two companies decide to team up to develop safer batteries, combining Japanese technological expertise with Chinese manufacturing prowess.In the end, the Chinese manufacturer loses its deal after a top engineer — one it recruited from Takumi — reveals that the batteries, as they stand, pose a fire risk. And in a last-minute deal, the two companies decide to team up to develop safer batteries, combining Japanese technological expertise with Chinese manufacturing prowess.
“Once revered around the world, Made in Japan products are now being forced to fight grueling battles,” the narrator says in the final scene, set to booming orchestra music. “But we cannot falter. We must fight on.”“Once revered around the world, Made in Japan products are now being forced to fight grueling battles,” the narrator says in the final scene, set to booming orchestra music. “But we cannot falter. We must fight on.”