TT-694 -- GS Yuasa Battery Cause of 787 Fire? Ebiz news from Japan.

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, Jan 20, 2013, Issue No. 694


- What's New -- GS Yuasa Battery Cause of 787 Fire?
- News -- US fund predicts financial meltdown in 2015
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Bars and Rickshaws in Tokyo
- Japan Business Q&A -- Godo Kaisha vs. Kabushiki Kaisha
- News Credits

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Boeing Corporation's future hinges on the success of its 787 "Dreamliner" and after 50 deliveries the company still has 798 back orders on its books, a record for a newly introduced wide-bodied commercial jet -- all thanks to the massive 20% fuel savings the aircraft offers operators. So it is a major blow that at least 5 safety-related incidents, including several fires, have prompted ANA, JAL, and authorities in the USA, India, and elsewhere to ground all Dreamliner aircraft until a thorough safety review has taken place.

Among the various incidents, the most shocking have been the incineration of the auxiliary power unit on an empty JAL aircraft at Boston's Logan airport, then just 8 days later a forced landing of an ANA jet with another major electrical problem. Both incidents were highly publicized, and the media have been quick to focus on the batteries and the fact that in the JAL incident it was seeping liquid as well as having been incinerated to ashes. "It's the batteries!", "What were they thinking putting Lithium-ion batteries in aircraft?" have been some of the more melodramatic comments covering the subject.

The fall out for the battery maker, Kyoto-based GS Yuasa, has been significant, with its stock dropping as much as 10% after the media reports appeared. We imagine that until an investigation is done and findings made public, the stock will take even more of a hammering. But as we relate below, maybe the stock market is overreacting. In fact this could be a buying opportunity for level-headed investors.

The reason Boeing is using a Lithium-ion power plant in the 787 is simple, it's the only presently available technology that packs sufficient energy density to make the Dreamliner and its low-weight, substantially-electric concept work. The company promised the 20% fuel savings to its loyal customer base by a certain production date (although they missed their original targets) and wouldn't have been able to retain its customers without the technology. So it was fundamentally a business decision to use Lithium-ion.

[Continued below...]

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For inquiries, contact

[...Article continues]

We believe that before everyone draws conclusions that Lithium-ion technology is too dangerous for aircraft, that we step back a little and ask if we are seeing the whole picture. Media exposure of Dell laptops exploding and burning, and test EVs doing the same thing, have created the idea that Lithium-ion technology is dangerous. OK, yes it is, but so is aviation fuel. In order to make these volatile compounds safe to use commercially, we have companies with squadrons of scientists and engineers creating delivery systems that allow practical application of them.

For Lithium-ion batteries for example, intelligence can be built in which detects short circuits, preventing high current draw and subsequent overheating of the battery pack. Semiconductors monitoring each cell in the battery can shut down the damaged cell before things get dangerous. We think it is naive to believe that GS Yuasa, one of the world's leading battery producers, and certainly with years of experience in handling Lithium-ion products, is unaware of the dangers of the chemistry and hasn't built in safeguards to make them reasonably safe.

Instead, we believe the investigators will be looking not just at the batteries but also for an external cause that may have caused them to ignite. As one investigator at the Japan Transport Ministry said, "The state of the battery indicates voltage exceeding the design limit was applied". That kind of comment immediately makes us think that they suspect the cause is voltage spikes caused by arcing or flash over from damaged or improperly connected electrical cabling or connectors.

Actually, this is not a new problem. Back in the 1990's it was found that Dupont's Kapton-insulated aircraft cabling, known for its light weight, high insulative characteristics, and durability, was in fact sensitive to moisture and could break down and cause carbon tracking and arcing, and consequently high voltage surges. There were a number of aviation incidents suspected of being related to Kapton breakdowns, including the crash of SwissAir Flight 111 off the coast of Canada in 1998. All 229 people on that flight perished.

In fact, fears about Kapton got so bad that in 1986 the US navy started removing the material from selected flight critical applications in its aircraft and in 1997, the US Coast Guard completely stripped Kapton-covered cabling from all its helicopters. Now, we're not saying that Kapton is the cause of the Dreamliner's problems, because Boeing apparently ceased using Kapton in the 1990's, but the fact that even the most basic infrastructure in a plane can cause catastrophic effects means that no one should jump to conclusions too quickly.

Another possibility is that Boeing's 787's wiring may be "weirding out" in a way that didn't show up in the test models (although in 2010 the development program WAS disrupted by an electrical problem that caused smoke to fill the cabin). Maybe the wiring configuration is causing inductive loads under certain situations or maybe there is a manufacturing fault causing high-resistance connections. Either condition could cause voltage spikes high enough to knock out the battery and its protective circuits. Since these types of faults can be very subtle they could take investigators weeks or even months to track down. Indeed, even Kapton was never fingered definitively and continued to be used on aircraft until just a few years ago.

A subtle problem will certainly be bad news for the airlines. Apparently JAL, for example, is losing JPY100m a day by having its 787 fleet grounded.

Lastly and perhaps not surprisingly, GS Yuasa has nothing on its websites yet about the problem and isn't demonstrating in a visible way that it is managing the Public Relations (PR) fall-out. Why Japanese companies are so slow to acknowledge crises like this and respond to them is beyond us. They're an international player and should be adopting international best practice in PR and damage control. But, just as Toyota did, GS Yuasa appears to be in "hunker down" mode while the world's media are pointing fingers. This looks suspicious and is damaging to their brand. Instead, if they had their wits about them they should conduct a campaign that shows active public concern and action. Then, once they have been vindicated they could enjoy a strong recovery and kudos for their handling of a difficult situation.

...The information janitors/


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+++ NEWS

- Child abduction bill gets sidelined
- US fund predicts financial meltdown in 2015
- Line passes 100m users
- Apparel company hits earnings high
- Another blow-out government budget

=> Child abduction bill gets sidelined

In a rather depressing development, the LDP's Justice Minister has said that pending legislation on the Japanese signing of the Hague Convention on the Civil Aspects of International Child Abduction is going to be pushed off for at least another year. Sadakazu Tanigaki said that the Diet had a full roster of more pressing issues to deal with and in any case the bill submitted in 2009 by the DPJ needs to be reviewed. ***Ed: He could have added that the LDP has already been "reviewing" the issue since 1980, when the treaty was first signed by most other advanced nations. We think the reality is that they don't want to change the law in the first place.** (Source: TT commentary from, Jan 19, 2013)

=> US fund predicts financial meltdown in 2015

Hayman Advisors famed head, Kyle Bass of Texas, is at it again, interviewing on TV and at conferences predicting that Japan will have a government debt crisis within the next two years. Bass, who successfully bet against the home mortgages securitization industry in the USA in 2007, then again bet against Greek debt in 2010, is now predicting that Japan has gone past the point of no return, with "current debt levels over 25 times the 2011 tax revenues". ***Ed: Bass reckons that Softbank buying Sprint in the USA is an example of Softbank looking to take its assets out of Japan before the debt crisis hits. He says that Dentsu's and other major corporate acquisitions abroad are also all part of a similar hedging strategy by those corporations.** (Source: TT commentary from, Jan 18, 2013)

=> Line passes 100m users

Japan's hit messaging app, Line, by Naver Corp., has announced that it now has 100m users globally, just 19 months after its launch. According to TechCrunch, the company said in July 2012 that it was making revenues of about JPY350m per month from character sales (what they call "stickers") and ad revenues from coupons offered to users, and that this number is "much higher now". Naver has also said that they are taking the app to the US market, where they hope to compete with Facebook Messenger. ***Ed: Like any social app, Line will need registered users to become successful. The interface is a lot more fun for kids and teens than Facebook is, so from that point of view, they may do quite well.** (Source: TT commentary from, Jan 18, 2013)

=> Apparel company hits earnings high

Of all the non-software, legal businesses you can do in Japan, apparel is certainly one of the most profitable, as proven by Fast Retailing's Uniqlo brand. Another brand that is doing extremely well is United Arrows of Akasaka, which has reported that it has earned JPY12bn on sales for 9 months of JPY85bn. Both earnings and sales were up 10% and were the third year in a row of record results. ***Ed: What is remarkable about United Arrows is that their merchandise is anything but cheap -- thus bucking the "shopping as low-cost entertainment" trend started by Uniqlo, Forever21, and others. Apparently, the firm is expert in reading momentary weather and fashion trends, and changing the window displays accordingly. Thus back in October last year, which was relatively warm, while other stores showed winter goods, United Arrows still had a strong selection of temperature-appropriate apparel on display.** (Source: TT commentary from, Jan 19, 2013)

=> Another blow-out government budget

PM Abe is determined to have Japan spend its way to fiscal health, and the government is lining up a main budget (forget about the special budgets that take us over the JPY100trn mark) of a record JPY93trn for FY2013 -- the seventh straight year of general account spending increases. In terms of where the money comes from, the tax revenue through to March 2013 is expected to be around JPY44trn or so, while bonds issued will account for most of the rest. ***Ed: Yup, tax accounts for less than half the juice the nation needs, and interest on previous bonds issuances eats up half that amount. Goodness knows why Abe thinks inducing inflation won't cause the interest rates to rise as well...** (Source: TT commentary from, Jan 19, 2013)

NOTE: Broken links
Some online news sources remove their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.


--------- Shojin Ryori: the real thing, in Tokyo ----------

Shojin Ryori is a unique Japanese temple vegetarian cuisine colloquially called “monks’ food”. The Dewa Sanzan variant is known for using vegetables found in the nearby Shonai Plain and wild mushrooms and vegetables picked on the slopes of the sacred Mount Gassan. The meals are served to pilgrims at the temple lodgings in Toge Village, which lies at the foot of Mount Haguro, one of the other three sacred mountains of Dewa (Dewa Sanzan).

Now, Dewa Sanzan's “yamabushi” (mountain priests) have decided to travel from Yamagata to Tokyo to introduce their cuisine to the foreign community here, with a limited-seating sampling of dishes, teas, local sake, and some local entertainment -- all absolutely free (first registered, first in). One day only.

Schedule: Saturday, February 9th, 13:30-15:30
Venue: Neuro Cafe (, Jingumae
Fee: Free (incl. sampling meals, herbal tea,local sake)
Location: 2F, Jingu-mae 2-13-2, Shibuya-ku, Tokyo
Nearest Stn: JR Chuo/Sobu Line Sendagaya (9min walk)/Metro Ginza Line Gaien-mae (7min walk)

For more information:
To register: Email


=> BiOS, a leading bilingual Tokyo IT company, is actively marketing the following positions for customers setting up or expanding in Japan, as well as other employers of bilinguals.


BiOS is urgently looking for a MAC Coordinator for our client, a global IT hardware and services provider who is servicing a global bank in Tokyo. The successful candidate will be responsible for coordinating with end-user businesses in the planning/logistics of user/workstation moves, coordinating with domestic vendors for service MAC requests, as well as working alongside desktop engineers to provide a complete MAC solution. In addition, you will create, manage, and share tracking sheets and help manage various MAC projects.

Due to the demanding work environment, this position is suitable for someone with 2 to 3 years of experience working in an IT department (multinational strongly preferred), and the ability to work with tracking sheets in an organized fashion. In addition, given the constant communication with foreigners and Japanese alike, conversational-level English and native-level Japanese are required.

Remuneration is negotiable depending on your experience and skill level.


- Network Engineer, global data center services provider, remuneration negotiable
- Service Delivery Manager (Data Center), large data center services provider, remuneration negotiable
- Staffing Consultant, IT services provider, remuneration negotiable
- Server Engineer, major Japanese online company, remuneration negotiable
- Software Asset Management Officer, global bank, remuneration negotiable

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Every 2 weeks BiOS sends out a regular communication to its job seeking candidates, called BiOS Job Mail. Every edition carries a list of BiOS's current and most up-to-date vacancies, with each entry featuring a short job description and a direct link to the main entry on the BiOS home page. Regardless of whether you are unemployed and searching, thinking about a career change, or just curious to know if there is something out there that might suit you better, the BiOS Job Mail newsletter is an easy and convenient way for you to stay informed. If you would like to register for the BiOS Job Mail, or to find out more, please email

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----------------- ICA Event February 21 ------------------

Speaker: Gen Utsumi, Head of Sales & Business Development APAC for smartTrade Technologies.

Title: "The Reality of Electronic FX Trading" Details: Complete event details at

Date: Thursday, February 21, 2013
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No sign ups at the door!!!!!!!
RSVP: RSVP by 5pm on Friday, February 15th
Venue is The Foreign Correspondents' Club of Japan

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Entrepreneur's Handbook Seminar 9th of February, 2013

If you have been considering setting up your own company, find out what it takes to make it successful. Terrie Lloyd, founder of over 17 start-up companies in Japan, will be giving an English-language seminar and Q&A on starting up a company in Japan.

This is an ideal opportunity to find out what is involved, and to ask specific questions that are not normally answered in business books. All materials are in English and are Japan-focused.

For more details:

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The Japan - U.S. Innovation Award Program , which is produced by the Japan Society of Northern California in cooperation with Stanford's US-Asia Technology Management Center, is opening up a new award category this year: the "Untold Story in Innovation" Award.

This will go to the author of a previously unpublished story of intrapreneurial innovation inside a company (probably a large company) that has relevance to Japan - U.S. business. This award is aimed at professional or part-time journalists and other researchers/writers.

The award is for an English language piece of journalism. There will be one winning author, who will receive a $3,000 cash prize. We will also recognize two Award Alternates, who will each receive a $1,000 cash prize. Although the cash prizes will only go to the winning
authors, the innovators and companies featured in their stories will also be named as recipients of the honor.

The first step is to send in a "pitch" proposal to the Subcommittee for this Untold Story award, namely:

Richard Dasher
Dana Lewis
Andrew Neuman
with cc to John Thomas

Deadline for the pitch is January 31, 2013. PLEASE REFER TO the attached document for details on what to include in the pitch, etc. If you have further questions, please contact Prof. Richard Dasher or Ms. Dana Lewis .

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There are gaijin share houses, and those that you share with others on a casual basis, but none has the facilities and amenities of this new-to-market offering in Oizumigakuen. Large 4-bedroom house with large yard, share kitchen-living-dining rooms, and with your own large bedroom. Available for short and long-term tenants. Just JPY50,000/month. Includes share of internet connection.

Only 20 minutes by train from Shibuya/Ikebukuro.

Contact the owner at



In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to

=> In our Bonsoy article last week, we pointed out the follies of exporting foods that are formulated for one national diet type and expecting it to work where there is a completely different diet type. In Bonsoy's case, high salt tolerance in Japan versus low tolerance in Australia. A reader reminds us of a similar situation several years ago.

*** Reader says:

If I remember correctly, Hong Kong banned some Japanese baby milk products citing the fact that they had levels of iodine below that of WHO standards.



=> A stroll through Sangenjaya, Tokyo
Daily life on a shotengai (local shopping street)

I threaded my way through the narrow streets crisscrossing the other side of Sangenjaya station one evening. Here, a diversity of cheap eating-places dot the streets, surrounding you with izakayas (bars) of many sizes. Young ladies and men stand outside their drinking establishments, calling out "irashaimase!" (Welcome!), handing you pamphlets whilst detailing their specials of the night: 120 yen beers, free flow of house wines, ridiculously cheap set menus - the list goes on. In the same lively street you can also find small boutiques and thrift stores selling household accessories: towels, crockery, stationary, clothes and other small random gadgets, all for very affordable prices.

=> Jidaiya Japanese Culture Experts, Tokyo
The heart of a rickshaw man opens up Asakusa to you

Jidaiya's stated mission is to offer Japanese culture in visible forms to everyone. To meet this objective, they present you with various opportunities to experience this country and its way of life. From rickshaw tours of Asakusa to photo sessions in traditional clothing to hands-on arts and crafts, there is something special for everyone.

If a rickshaw ride through Asakusa suits you, there are various courses and tours available. As the longest-serving rickshaw company in Tokyo's historic Asakusa area, Jidaiya has built up many years worth of street-level expertise in their trade. Who better to teach you the ins and outs of daily life in "real" Tokyo than the men and women who regularly pass through the city's every street and alleyway? First-timers to the area can use this as a good way to orient themselves, as they can get a good overview without getting lost. Repeat visitors can use a rickshaw tour to gain an insider's perspective on this part of Tokyo that most people merely skim the surface of.


+++ JAPAN BUSINESS Q&A -- Godo Kaisha vs. Kabushiki Kaisha

=> Q. My friend and I have been thinking about starting our own consulting firm. What is the difference between a Godo Kaisha and a Kabushiki Kaisha? Which would be a better choice for our purposes?

A: The answer to your question will depend a bit on your priorities. The company form called Kabushiki Kaisha (KK) tends to have a bit more value in terms of recognizabilty in comparison to a Godo Kaisha (GK), but it also costs more to establish and requires at least one shareholder meeting a year - which may not fit your needs. For this reason (convenience and costs) the GK form is increasing in number.

More specifically, the main differences between the two company forms are as follows:

1. Stakeholder responsibility
The KK is a company form that allows shareholders to have limited responsibility by separating ownership from the directors, executive officers, and management that run a company. On the other hand, GK is also a company form that allows stakeholders to have a limited responsibility but the stakeholders also serve as the managing members running the company.

2. Corporate management
In the case of the KK, directors and executive officers run a company under the Japanese Companies Act. They are subject to the restrictions and business procedures that are required under this law and therefore decision-making may at times seem slow. Management will serve under fixed-term contracts, and the KK will need to make their financial statements public, adding an additional layer of cost. Profit and authority is
proportional to the amount of investment.

To continue reading...



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