VZCZCXRO1330
OO RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHKO #0346/01 0441003
ZNR UUUUU ZZH
O 131003Z FEB 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0778
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION PRIORITY
RUEHFK/AMCONSUL FUKUOKA PRIORITY 2423
RUEHNAG/AMCONSUL NAGOYA PRIORITY 0252
RUEHNH/AMCONSUL NAHA PRIORITY 4767
RUEHOK/AMCONSUL OSAKA KOBE PRIORITY 6210
RUEHKSO/AMCONSUL SAPPORO PRIORITY 2974
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 3477
RUEAUSA/DEPT OF HHS WASHINGTON DC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 02 TOKYO 000346 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR G/AIAG, EEB, AND EAP/J 
HHS FOR OGHA 
 
E.O. 12958: N/A 
TAGS: ETRD EINV KFLU TBIO KSTH JA
SUBJECT: PANASONIC CONFIRMS PLANS TO REPATRIATE STAFF 
FAMILIES, BUT SEES NO IMMINENT PANDEMIC THREAT 
 
REF: PATTERSON-WOLF EMAILS 
 
TOKYO 00000346  001.2 OF 002 
 
 
Sensitive But Unclassified.  Contains Proprietary Information. 
 
¶1.  (SBU) Summary:  Panasonic says pandemic preparedness and 
risk management are behind its decision to repatriate 
dependents of employees working in many emerging countries. 
However, the company concedes there is no imminent pandemic 
threat.  With no particular guidance from the GOJ or other 
authorities to repatriate citizens, some speculate 
Panasonic's decision is driven by business concerns. 
Panasonic faces significant pressure to restructure and cut 
costs in the midst of a major electronics industry downturn 
and the ongoing acquisition of rival Sanyo.  End Summary. 
 
¶2.  (SBU)  In conversations with Emboffs, representatives 
from electronics giant Panasonic's Osaka headquarters 
confirmed recent media reports the company plans to 
repatriate dependents of Japanese employees working in 
several emerging countries as part of the company's pandemic 
action plan.  While they have made no official announcement 
Panasonic reps outlined the company's plans in an interview 
to local media published February 9. 
 
¶3.  (SBU)  Panasonic officials we spoke with conceded they 
have no specific information on any immediate pandemic 
threat, and that this decision was not made in reaction to 
such a threat.  They maintained, however, the company wants 
to manage its risk profile and sees the repatriation of 
families as lowering risk and consistent with the company's 
internal pandemic action plan.  Contrary to one press report, 
company officials said the decision was made independently 
without consultation with industry groups or the GOJ.  Post 
also contacted the Ministry of Economy, Trade, and Industry 
(METI) and the Japan Electronics IT Industry Association 
(JEITA) and they have no information about pandemic or other 
health threats and have not made any public statements on the 
subject.  Foreign Ministry consular officials had no comment 
on Panasonic's actions, but said the GOJ has not encouraged 
any evacuation or repatriation of Japanese citizens overseas. 
 Ministry of Health, Labor, and Welfare (MHLW) officials said 
neither Panasonic nor other companies have approached them 
for pandemic preparedness guidance. 
 
¶4.  (SBU)  Panasonic reps downplayed media speculation the 
company's decision is a cover for cost-cutting measures.  One 
rep asserted sending family members home to live separately 
is more expensive for the company than if they reside 
overseas with a Panasonic employee.  A contact who has 
studied pandemic preparedness efforts by Japanese industry 
said several smaller Japanese companies have brought home 
overseas dependents for what were reportedly pandemic 
planning reasons.  He noted a recent push by Japanese 
industry to incorporate better risk management practices may 
be affecting decisions regarding overseas operations, but 
acknowledged it is difficult to separate risk management from 
more general business decisions.  He added Panasonic's size 
and influence could prompt other large firms to consider 
similar actions. 
 
¶5. (SBU)  In separate conversations, industry analysts have 
told us Japan's electronics industry is burdened by 
over-capacity and badly needs to consolidate.  Panasonic's 
December 2008 announcement it would acquire Sanyo Electric 
represented a step in this direction.  Japan's Nikkei 
newspaper noted Panasonic's restructuring charges were the 
largest in the industry and it reported Panasonic will close 
20 percent of its factories in order to cut costs roughly 1 
billion dollars per year. 
 
¶6. (U) The Panasonic Group announced its JFY 3rd quarter 
financial results February 4 against a backdrop of an 
industry in turmoil.  Panasonic's consolidated sales were 
down 20 percent and the company reported net losses of 
roughly 650 million dollars for the quarter.  Panasonic is 
now projecting a loss for the fiscal year in excess of 4 
billion dollars.  The Group also reported restructuring 
expenses of 3.8 billion dollars due to integration or closure 
 
TOKYO 00000346  002.2 OF 002 
 
 
of operating sites, losses on fixed assets, and expenses from 
employment structural reforms. 
ZUMWALT