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I. Restructuring of
domestic operations
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As for the effects of the cyclical downturn in the
IT and semiconductor-related businesses which have affected
our precision machinery and parts operations, we firmly
believe demand will recover, making it possible to continue
production in Japan. However, this industry grows amid
turbulent changes, with demand fluctuating violently,
sometimes dropping by more than 50%, then bouncing back
to twice or three times its former level. This is very
different from the bearing industry, where demand is stable.
Only the companies that can prepare
a flexible cost management structure to cope with these
volatile changes in demand will survive in this industry.
Therefore, we plan to spin-off our precision machinery
and parts operations and establish a totally new business
organization.
In detail, we will cease production
at the Akagi Plant by transferring production to the Maebashi
Plant and reorganize the production facilities in the
Maebashi district, increase the ratio of contract workers,
and expand the production capacity of NSK Kyushu Co.,
Ltd. where labor costs are cheaper. Furthermore, we need
to prepare a factory operating system that can cope with
the volatile demand changes and are prepared to renew
our salary and employment systems in order to do so.
We will also try to reduce our reliance on the semiconductor
and machine tool sectors, and expand sales to industries
that receive relatively little effect of economic fluctuations,
such as the automotive production equipment, packaging
equipment, and medical equipment sectors. |
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Aim