Japan battles to persuade its big brands to join military buildout

1 / 3
Visitors look around a model of MBDA's Meteor, Beyond Visual Range Air-to-Air Missile, at the DSEI Japan defense show at Makuhari Messe in Chiba, east of Tokyo, on March 15, 2023. (REUTERS)
2 / 3
Mitsubishi Heavy Industries' Unmanned surface vehicle is displayed at the DSEI Japan defense show at Makuhari Messe in Chiba, east of Tokyo, on March 15, 2023. (REUTERS)
3 / 3
General view shows Daikin Industries' Yodogawa plant in Osaka, Japan, on February 20, 2023. (REUTERS)
Short Url
Updated 16 March 2023
Follow

Japan battles to persuade its big brands to join military buildout

  • In a country with an ingrained public sentiment against militarism, Japan's government is having a hard time convincing its best-known brands to invest in weapons of war

As Tokyo spins up its defense industry for the country’s largest military expansion since World War II, it has run into a challenge: some of Japan’s best-known brands are reluctant to invest in the military side of their businesses.
Japan, which renounced war in 1947, last year unveiled a five-year $315 billion military expansion to deter Beijing from using force in the East China Sea amid growing concern that Russia’s attack on Ukraine — which it calls a “special operation” — could embolden China to invade Taiwan.
But a key part of Tokyo’s strategy hinges on persuading commercial firms such as Toshiba Corp, Mitsubishi Electric Corp. and Daikin Industries Ltd, which for decades have quietly armed its Self Defense Forces (SDF), to ramp up production.
In a country with an ingrained public sentiment against militarism, that is proving a hard sell for some of its suppliers, according to Reuters interviews with six government and company officials.
In private meetings with the defense ministry over the last year, some firms have raised concerns such as low profit margins, the financial risk of building manufacturing plants that could be left idle after Japan completes its military expansion, and potential damage to their public image from arms sales, an official directly involved in the talks told Reuters.
The official declined to be identified or attribute the complaints to specific companies, citing the confidential nature of the talks.
The government is preparing legislation that includes raising profit margins on military gear from a few percent to as much as 15 percent, and the provision of state-owned factories that companies can use to expand production risk-free. Some are concerned that might not be enough.
“Until now, the ministry has taken the defense companies for granted,” said Masahisa Sato, an influential ruling party lawmaker and former deputy defense minister.
Sato said it was increasingly difficult for Japanese executives to justify defense sales out of “patriotic duty” to shareholders focused on more profitable civilian ventures.
Prime Minister Fumio Kishida’s military buildup plan identifies defense manufacturing as a key pillar of national security.
Japan, however, does not have a national defense champion such as Lockheed Martin Corp. in the United States or Britain’s BAE Systems PLC, and many of the firms supplying the SDF are associated with more mundane products.
At Japan’s biggest defense company, Mitsubishi Heavy Industries, which is developing Japan’s next jet fighter and new longer-range missiles to help deter China, military contracts account for only a tenth of its $29 billion in revenue last year. Most of its business is civilian aircraft components, power plant equipment and factory machines.
Aircon manufacturer Daikin has a munitions sideline; Toshiba, which makes electronic goods such as printers, also produces military-grade batteries; and Mitsubishi Electric makes radars and missiles alongside fridges and vacuum cleaners.
Since early last year, defense officials have been meeting with these firms and other top suppliers, such as car-and-helicopter maker Subaru Corp, to urge them to expand their lower-profile military units.
Reuters contacted 15 leading Japanese defense manufacturers, whose CEOs the defense ministry invited to talks with then- defense minister Nobuo Kishi in April, and in January with his successor, Yasukazu Hamada.
Three of them, Mitsubishi Heavy, Mitsubishi Electric and IHI Corp, which makes jet engines, bridges and heavy machinery, confirmed they had also taken part in other lower-level discussions.
Five firms did not reply, and the rest declined to say whether they had joined in other discussions. The companies who responded declined to give details of the meetings or any concerns they raised during the talks.

Sweeteners
Many companies are reluctant to talk about their defense units, fearing it might put off customers at home, where anti-military sentiment lingers, or overseas, particularly in China, where resentment over Japan’s wartime past could be politicized.
Reuters asked 10 of Japan’s military suppliers, including Toshiba, Mitsubishi Electric, Daikin and Subaru, for interviews with their defense unit managers. Only Mitsubishi Electric agreed.
Masahiko Arai, the head of Mitsubishi Electric’s defense systems division, said he welcomed government proposals and hoped that contributing to Japan’s “safety and security” would be beneficial for the firm.
His biggest concern, he said, was what would happen after Japan’s five-year military buildup ends, adding that other companies “are troubled by reputation risk.” His unit accounted for about 4 percent of the $34 billion in sales the company recorded last business year.
An official at another major Japanese defense supplier, who requested anonymity because of the sensitivity of the issue, said being directly involved with regional tensions might be bad for business.
“Reputation risk worries us a lot,” the official said. “There have been occasions when our Chinese customers have expressed their discomfort when the topic of defense has come up.”
Despite diplomatic tensions, China is Japan’s top trade partner and a major manufacturing base for many Japanese companies.
When Japan ended a decades-long ban on military exports in 2014, it did not spur industry growth because of corporate timidity and overly cautious bureaucrats, analysts say. Mitsubishi Electric is the only company to have sold defense equipment overseas, with a deal in 2020 to supply radars to the Philippines.
Meanwhile, chemical company Daicel announced it would close its pilot-ejection system unit in 2020, and Sumitomo Heavy Industries said it told the defense ministry in 2021 it would stop making machine guns. Daicel cited low profitability, while Sumitomo Heavy said it was difficult to maintain production and train engineers.

’Special equipment’
An opinion poll published by the government this month suggests there is growing public support for a bigger military as regional tensions with China and North Korea escalate.
In the survey of 1,602 people, 41.5 percent said they wanted to expand the SDF, up from 29.1 percent in the last poll five years ago.
Even so, Japanese companies often refer to their military products as “special equipment,” the government official said. Daikin, which generates 90 percent of its revenue from air conditioning, is among them. It does not list the artillery and mortar shells it makes at its Yodogawa plant in Osaka, western Japan, on its website.
“We aren’t keeping our defense business secret; we disclose information about it in a regular way,” a Daikin spokesperson said. “It’s not about reputation risk.”
On a street outside the barbed-wire topped wall that surrounds the Daikin factory, Reiko Okumoto, 66, said she had lived in the working-class neighborhood surrounding it for more than 40 years without knowing it produces shells.
“It would be good if (Daikin) could step away from military work,” she said. “But given how the world is, I know that’s unrealistic.” 


Italy PM Meloni visits Tunisia for migration talks

Updated 5 sec ago
Follow

Italy PM Meloni visits Tunisia for migration talks

  • Tunisia is a major transit point for thousands of sub-Saharan migrants hoping to reach Europe every year

TUNIS: Italian Prime Minister Giorgia Meloni met with officials in Tunis Wednesday to discuss what she called a "new approach" to irregular migration and economic cooperation with Tunisia.
The hard-right leader's visit, the fourth in less than a year to the north African country, came as her government pledged to curb irregular migrant arrivals in Italy.
Meloni met with President Kais Saied, who said after the meeting Tunisia must not become "a country of transit or settlement" for migrants from other African countries, according to a statement from his office.
In a video address released after her discussions with Saied, Meloni also said "Tunisia cannot be a country of arrival for migrants" from the rest of Africa.
She vowed to "involve international organisations to work on repatriations" of migrants while insisting on more European investment in African nations.
Ahead of the visit, an Italian official had told AFP that "cooperation on migration remains a central aspect of the relationship between Italy and Tunisia".
"It remains essential that Tunisian authorities continue their action to combat human trafficking and contain illegal departures," the official added.
Meloni's latest visit to Tunisia came as part of her so-called Mattei Plan, a programme aiming to posit Italy as a key bridge between Africa and Europe.
She said the fight against irregular migration required development for African countries and investments.
"Italy will continue to try to advance this new approach which it is promoting at a European level," she said.
But critics say the plan would funnel energy north while exchanging investment in the south for deals aimed at curbing migration.
Three agreements were signed Wednesday: a 50-million-euro ($53-million) aid for energy projects, credit for small- and medium-sized businesses, and a university cooperation agreement.
Meloni also said Italy would encourage regular migration by granting 12,000 residence permits to Tunisians trained in specific fields.
Tunisia is a major transit point for thousands of sub-Saharan migrants hoping to reach Europe every year, with Italy as a frontline for their arrivals.
Almost 70,000 migrants were intercepted trying to cross the Mediterranean from Tunisia to Italy last year, according to Tunisian authorities.
Meloni visited Tunisia three times over the summer of 2023, twice with the European Commission chief Ursula von der Leyen.
The visits resulted in the European Union's signing of an agreement in July to provide financial aid to debt-ridden Tunisia in return for its commitment to curb migrant departures.
The agreement provided 105 million euros to curb irregular migration -- which the EU has started paying -- added to 150 million euros in budgetary support.
European Parliament lawmakers criticised the agreement, citing a deterioration of human rights and freedoms in the north African country.
They also criticised Saied's increasing authoritarian rule after his sweeping power grab in 2021.
Last month, the EU signed a similar deal with Egypt worth 7.4 billion euros on energy and migration.


Google employees arrested after protesting against $1bn contract with Israel

Updated 38 min 45 sec ago
Follow

Google employees arrested after protesting against $1bn contract with Israel

  • 'Google workers do not want their labor to power Israel’s genocide of Palestinians in Gaza,' No Tech For Apartheid group said

LONDON: Several Google employees were arrested on Tuesday for taking part in a 10-hour sit-in at the company’s offices in New York and California.

The protest, organized by members of the No Tech For Apartheid movement, was meant as a challenge to the tech giant’s involvement with the Israeli government. It centered on a $1 billion cloud computing contract between Google, Amazon and the Israeli government and military, known as Project Nimbus.

The project involves creating a secure Google cloud setup in Israel to facilitate data analysis, AI training and other computing services, Time magazine reported.

According to leaked documents reported by American news organization Intercept in 2022, the project includes advanced features like AI-enabled facial detection and automated image categorization.

During the sit-in, a livestreamed video captured a security worker telling protesters at Google’s California office that they were on administrative leave and cautioned them about trespassing.

Social media videos showed police removing nine protesters from the premises. Similar actions were recorded at the company’s New York office.

A statement from the No Tech For Apartheid group said: “Google workers do not want their labor to power Israel’s genocide of Palestinians in Gaza. The time is now to rise up against Project Nimbus, in support of Palestinian liberation and join calls to end the Israeli occupation.”

Last month, a Google employee from the group interrupted a talk by the company’s Israel chief, accusing the company of “powering genocide.” He was later fired.

A Google spokesman told the Telegraph: “These protests were part of a longstanding campaign by a group of organizations and people who largely don’t work at Google. A small number of employee protesters entered and disrupted a couple of our locations.

“Physically impeding other employees’ work and preventing them from accessing our facilities is a clear violation of our policies and we will investigate and take action.

“These employees were put on administrative leave and their access to our systems was cut. After refusing multiple requests to leave the premises, law enforcement was engaged to remove them to ensure office safety.”


Man guilty of attacks near UK mosques given hospital order

Updated 51 min 36 sec ago
Follow

Man guilty of attacks near UK mosques given hospital order

  • Abbkr has paranoid schizophrenia and believed he was controlled by people possessed by evil spirits

LONDON: A man convicted of attempted murder after deliberately setting fire to two elderly men shortly after they left mosques in the UK was on Wednesday handed an indefinite hospital order.
Mohammed Abbkr, from Edgbaston in Birmingham, central England, deliberately set fire to Hashi Odowa, 82, and Mohammed Rayaz, 70, in February and March last year.
Abbkr, originally from Sudan, was convicted of two counts of attempted murder last year at Birmingham Crown Court in central England.
Judge Melbourne Inman told Abbkr, who has paranoid schizophrenia and believed he was controlled by people possessed by evil spirits: “You threw petrol over your victims and then set them alight — the attacks were horrific.”
“The two victims in this case were, on any rational view, chosen at random,” the judge told Abbkr, who watched the proceedings by video-link from Ashworth high security hospital in northwest England.
“You, however, genuinely believed each of them was one of those trying to take control of you.
“I am wholly satisfied that you committed both of these offenses at a time when you were suffering a severe mental illness.”
Abbkr sprayed petrol on the two men outside or near mosques they had attended and then set them alight. The attacks took place in west London on February 27 and Birmingham on March 20.
Odowa, who was attacked in London, was treated for severe burns to his face and arms. The Birmingham attack left Rayaz hospitalized with severe injuries.


70 killed as Afghanistan hit by heavy rains

Updated 17 April 2024
Follow

70 killed as Afghanistan hit by heavy rains

  • Rains between Saturday and Wednesday triggered flash floods in most Afghanistan provinces
  • Fifty-six people injured, over 2,600 houses have been damaged or destroyed, says Afghan official 

KABUL: Around 70 people have been killed by heavy rains lashing Afghanistan over the past five days, the government’s disaster management department said Wednesday.
Afghanistan was parched by an unusually dry winter which desiccated the earth, exacerbating flash-flooding caused by spring downpours in most provinces.
Disaster management spokesman Janan Sayeq said “approximately 70 people lost their lives” as a result of rains between Saturday and Wednesday.
Fifty-six others have been injured, he said, while more than 2,600 houses have been damaged or destroyed and 95,000 acres of farmland wiped away.
Giving a smaller death toll last week, Sayeq said most fatalities at that point had been caused by roof collapses resulting from the deluges. 
Neighbouring Pakistan has also been hammered by spring downpours, with 65 people killed in storm-related incidents as rain falls at nearly twice the historical average rate.
The United Nations last year warned that “Afghanistan is experiencing major swings in extreme weather conditions.”
After four decades of war the country ranks among the nations least prepared to face extreme weather events, which scientists say are becoming more frequent and severe due to climate change.
At least 25 people were killed in a landslide after massive snowfall in eastern Afghanistan in February, while around 60 were killed in a three-week spate of precipitation ending in March.


President Widodo urges Apple CEO to open manufacturing facility in Indonesia

Updated 17 April 2024
Follow

President Widodo urges Apple CEO to open manufacturing facility in Indonesia

  • Country has ‘endless’ investment ability, Tim Cook says on visit to Jakarta
  • Tech giant announces opening of new Apple Developer Academy in Bali

JAKARTA: Indonesian President Joko Widodo on Wednesday met the head of tech giant Apple and urged him to open a manufacturing facility in the country.

CEO Tim Cook was in Jakarta following a trip to Hanoi, where the company announced plans to increase spending on suppliers in Vietnam, its most important manufacturing hub outside China.

Before the meeting between Widodo and Cook, Apple announced plans to boost its investment in Indonesia and said it would open a new Apple Developer Academy — facilities designed to nurture local talent in the tech sector — in Bali, its fourth in the country.

“The meeting with Tim Cook focused on exploring strategic plans, including the opportunity of Apple expanding to Indonesia and further integration into the global supply chain,” Widodo said in a statement.

“I invited Apple to establish an innovation hub with potential universities in Indonesia for human resources development. I also urged Apple to develop a manufacturing facility in the country.”

Apple currently does not have a manufacturing facility in Indonesia but opened its first developer academy there in 2018.

The new facility takes the company’s total investment in Indonesia to 1.6 trillion rupiah ($98.4 million), according to Industry Minister Agus Gumiwang Kartasasmita.

“After this, the Ministry of Industry will conduct a business-matching program. We already have a list of the components (that Apple needs) and mobile components that are already produced in Indonesia, so perhaps there can be a partnership,” he said.

Apple has based much of its key manufacturing of iPads, Airpods and Apple Watches in Vietnam, and more recently India, as it explores ways to diversify its supply chains away from China.

Home to more than 270 million people, Indonesia has a young, tech-savvy population with more than 100 million people aged under 30.

According to figures from Statista, as of January, Apple had an 11.5 percent share of Indonesia’s mobile phone market, behind Oppo (18 percent) and Samsung (17 percent).

“We talked about the president’s desire to see manufacturing in the country and it’s something that we will look at,” Cook told reporters after meeting Widodo.

“I thought we had a great conversation and I really appreciated the time with him. It was a dialogue about how much potential there is in the country and our commitment to the country.”

Cook later met president-elect, Defense Minister Prabowo Subianto, who will take over from Widodo in October.

“I think the investment ability in Indonesia is endless, I think that there’s a lot of great places to invest and we’re investing,” Cook said. “We believe in the country.”