State aid being considered for Sharp

Sharp’s warning that it may not survive under the burden of its $12bn of debts has raised the question of possible state intervention.

Sharp employs over 63,000 about half of them in Japan. It is expecting a $5.6bn loss for the current financial year.

An official of the opposition Liberal Democratic Party says that Sharp must come up with a plan to show how it can become competitive again before any injection of state funding can be considered.

Sharp has taken a beating from the high exchange rate of the Yen, high costs in Japan and foreign competition – principally from Samsung.

The official went on to say that the answer to the Japanese industry’s woes is consolidation – a policy which has been seen to fail many times over.

However, with Panasonic, Renesas, Sony and Sharp all in dire straits – Renesas receiving a $6bn bail-out only last month – something has to be done in Japan.

The obvious thing to do would be to change the management - but this seems to be undo-able in corporate Japan.

Tags: dire straits, opposition, Sony, state intervention

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