Canon CEO Very Dismayed by Brexit, Could Halt Japan Recovery
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As a result of the vote almost every stock price in the world went down. Business execs got nervous, Cannon's felt he had to say something. I disagree with that.
He focused on the value of the yen, because currency manipulation is a wonderful trick for producing a costly product and then selling it at an acceptable price in foreign markets. The currency landscape of the U.S. dollar in the world's largest market and the Euro (with some time to the British pound) in the second biggest market (or is it the biggest? these ranking like to break up the Eurozone so they can continue to blame the U.S. for being the biggest), and then all of the rest was the norm. If the Euro looses one of it's most productive members, then the prospect for a strong Euro are not good. Japan can't afford to manipulate the yen against the dollar and the Euro. The price for Canon gear in Europe is expected to rise, not good for sales volume.
Note, I believe that Canon is not price gouging when the price goes up in countries where the currency has gone down.
And note, Canon's CEO doesn't give a hoot about immigration levels, Brussels based regulation overreach, xenophobia, ... He cares about Canon's ability to deliver expensive and non-vital products to consumers with different currencies.
He focused on the value of the yen, because currency manipulation is a wonderful trick for producing a costly product and then selling it at an acceptable price in foreign markets. The currency landscape of the U.S. dollar in the world's largest market and the Euro (with some time to the British pound) in the second biggest market (or is it the biggest? these ranking like to break up the Eurozone so they can continue to blame the U.S. for being the biggest), and then all of the rest was the norm. If the Euro looses one of it's most productive members, then the prospect for a strong Euro are not good. Japan can't afford to manipulate the yen against the dollar and the Euro. The price for Canon gear in Europe is expected to rise, not good for sales volume.
Note, I believe that Canon is not price gouging when the price goes up in countries where the currency has gone down.
And note, Canon's CEO doesn't give a hoot about immigration levels, Brussels based regulation overreach, xenophobia, ... He cares about Canon's ability to deliver expensive and non-vital products to consumers with different currencies.
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Stu_bert said:Political bit
The problem for me was that as seems typical of any political campain in recent years, there were far too many lies and bending of truths, the media did a poor job to highlight it, and simplifying it to a yes/no vote is an insult to people's intelligence. Everything from how much we could pump into the NHS, to the economic forecasts, both sides spent 95% of the time just pressing people's buttons by distorting the truth. And the media just joined in as frankly all they seemed to care about is increasing their circulation.
As was mentioned, many people did vote with emotion to make a point about how unhappy they were, as the current democratic system has very few opportunities for feedback. So we can't ask the british public their top 3 things which had to be radically improved for them to stay in the EU, all we can do is go yes/no. Dumb it down, and look what happens.
On the plus side, I hope it gives food for thought to all political institutions on how crude the democratic system can be, and therefore the inability to hear what citizens want. Feedback may be onerous, but if you leave it to referendums and elections, then you risk stability of the your economy and the global economy. Of course it (the global) will recover, but perhaps such swings could be avoided?
As to the actual outcome, I doubt you can truly get a feel for whether the decision was right or wrong without a sensible amount of time ie circa 10 years. It will take 2-3 years for all the agreements to be in place, longer for businesses to adjust, and equally as long for the politicians to fix the issues that were highest in people's minds. And if it is concluded that the decision was incorrect, would we be prepared to admit we were wrong, and for the rest of the EU to accept that?
What an excellent blood post so true
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This vote went the way it did because we the people have been largely ignored for a long time by an elite who "knows better".
We were fed lines like "UK will be at the back of the queue for USA trade deal if we leave".
But we don't have a UK-US trade deal, yet we manage to trade very well thank you, as for TTIP I'm very glad we're out.
The EU has become something quite unlike what we entered into in 1973, then it was a trading bloc and on the whole worked relatively well. It has become a red tape machine that damages UK industry, allows (for instance) Spanish factory fishing ships to fish our waters yet insists we break up what little's left of the once substantial UK fishing fleet. It's rules and regulations dictate in favour of big business, yet the UK has a backbone of small business. For instance after the banking failure and resultant unemployment we had an MP on R4 saying if every one man business could take on just one person that we'd have zero unemployment.. the R4 presenter was totally speechless as he could only think of big business. This is part of the problem, the BBC and the rest of the press has lived inside their little "westminster bubble" for so long they have lost any connection with much of the country, so they simply can't comprehend what's happened.
Additionally it is clear the EU wants to change Europe into a "United States of Europe" with them in charge, telling everyone how to do everything... all very soviet.
There is the huge issue of immigration.. now before I go any further here's some details to give our American cousins an idea of what England's like: Population density: imagine taking all the people in california + Taxas and cramming them into michigan without first removing the population of michigan. Now add 300,000 more people from outside every year whilst at the same time having the smallest housing in europe (just over a third the average size of US homes, even the Japanese have bigger homes) and then not building anything close to the volume of housing needed. Today if you're under 40 and live in your own house with or without a mortgage then you are rare and very very lucky. The rate of immigration also depresses wages, so areas with higher than average levels of immigration can see wages depressed by as much as 30 or 40%, which is generally loved by big business but hated by those on the wrong end of the immigration. The people comming are on the whole decent hard working and so on, but when they decide to come to your town in the 10s of thousands and swamp the local population who has lived there for generations it was always going to end badly. Why all this migration?.. because the EU has failed, unemployment is rocketing 50% unemployment for the young in southern EU states, it's a catastrophy, the UK being non-Euro and generally more favourable to small businesses hasn't been dragged into the mire.
Now none of the above means we don't want to trade with the rest of Europe, just we do not want to be ruled by Europe. In fact what we want is to be free to trade with the whole world rather than focussing on a backward looking Nanny knows best stangnant EU.
Which brings us back to Japan.. We want to trade with you.. we REALLY want to trade with you, we want you to come here on holiday or to do business, we love your cameras and will carry on buying loads of them. So please don't panic.
We were fed lines like "UK will be at the back of the queue for USA trade deal if we leave".
But we don't have a UK-US trade deal, yet we manage to trade very well thank you, as for TTIP I'm very glad we're out.
The EU has become something quite unlike what we entered into in 1973, then it was a trading bloc and on the whole worked relatively well. It has become a red tape machine that damages UK industry, allows (for instance) Spanish factory fishing ships to fish our waters yet insists we break up what little's left of the once substantial UK fishing fleet. It's rules and regulations dictate in favour of big business, yet the UK has a backbone of small business. For instance after the banking failure and resultant unemployment we had an MP on R4 saying if every one man business could take on just one person that we'd have zero unemployment.. the R4 presenter was totally speechless as he could only think of big business. This is part of the problem, the BBC and the rest of the press has lived inside their little "westminster bubble" for so long they have lost any connection with much of the country, so they simply can't comprehend what's happened.
Additionally it is clear the EU wants to change Europe into a "United States of Europe" with them in charge, telling everyone how to do everything... all very soviet.
There is the huge issue of immigration.. now before I go any further here's some details to give our American cousins an idea of what England's like: Population density: imagine taking all the people in california + Taxas and cramming them into michigan without first removing the population of michigan. Now add 300,000 more people from outside every year whilst at the same time having the smallest housing in europe (just over a third the average size of US homes, even the Japanese have bigger homes) and then not building anything close to the volume of housing needed. Today if you're under 40 and live in your own house with or without a mortgage then you are rare and very very lucky. The rate of immigration also depresses wages, so areas with higher than average levels of immigration can see wages depressed by as much as 30 or 40%, which is generally loved by big business but hated by those on the wrong end of the immigration. The people comming are on the whole decent hard working and so on, but when they decide to come to your town in the 10s of thousands and swamp the local population who has lived there for generations it was always going to end badly. Why all this migration?.. because the EU has failed, unemployment is rocketing 50% unemployment for the young in southern EU states, it's a catastrophy, the UK being non-Euro and generally more favourable to small businesses hasn't been dragged into the mire.
Now none of the above means we don't want to trade with the rest of Europe, just we do not want to be ruled by Europe. In fact what we want is to be free to trade with the whole world rather than focussing on a backward looking Nanny knows best stangnant EU.
Which brings us back to Japan.. We want to trade with you.. we REALLY want to trade with you, we want you to come here on holiday or to do business, we love your cameras and will carry on buying loads of them. So please don't panic.
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It appears there is a petition with over 1.4m signatures asking for a second referendum if the first has less than a 75% turnout and a winning majority of less than 60%. Seconds out, round two! Ding-ding!
In other news, here in Scotland the First Minister is going to request Scotland be allowed to stay in the EU. Now if Nicola Sturgeon wanted to show a bit of cunning, she would invite the financial businesses of London to come north. London and Scotland both voted to remain so why not work together? Pots of cash head north out of London and Scotland splits from the rest of the UK. It's a crazy thought but just might work.
As has been previously said, the UK doesn't hate Europe (or any other area), we just wanted to take back a bit of control.
Let's finish on a joke, both Putin and Trump think Brexit is a good thing. Still laughing?
In other news, here in Scotland the First Minister is going to request Scotland be allowed to stay in the EU. Now if Nicola Sturgeon wanted to show a bit of cunning, she would invite the financial businesses of London to come north. London and Scotland both voted to remain so why not work together? Pots of cash head north out of London and Scotland splits from the rest of the UK. It's a crazy thought but just might work.
As has been previously said, the UK doesn't hate Europe (or any other area), we just wanted to take back a bit of control.
Let's finish on a joke, both Putin and Trump think Brexit is a good thing. Still laughing?
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Won't question the political views of the first responder but concentrate on the statement by Canon's CEO.
Lot's of Japanese firms have the same exact concern as him. The same can be said
about non-British firms who are now forced to waste hundreds of man-hours to stay in your market,
under different conditions than before the Brexit. Again, that is terrible for any industry.
Business HATES uncertainty. You can check all the financial markets to confirm this simple idea.
That's is exactly what the Brexit has created and affects everyone else in a global economy.
Lot's of Japanese firms have the same exact concern as him. The same can be said
about non-British firms who are now forced to waste hundreds of man-hours to stay in your market,
under different conditions than before the Brexit. Again, that is terrible for any industry.
Business HATES uncertainty. You can check all the financial markets to confirm this simple idea.
That's is exactly what the Brexit has created and affects everyone else in a global economy.
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EduPortas said:
That is why we had first the BeNeLux and later the EU. The EU was transformed to a pure political vehicle with the
If the EU was still the organization it meant to be, no one would think about leaving it. We did screw up this and now we have look how can make it a better Europe in which GB feels home again.
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I though GB was a strong nation that could influence. If they could not influence the EU to change their ways what say do they have in the wider world.
Maybe they got rid of the shackles, but at what cost to the country. They took the easy way out and IMO didn't really think it through.
Cameras are luxury items, fluctuations don't hurt the general public, they don't depend on it like oil. Canon will lose profit but they should have already planned for currency changes.
Maybe they got rid of the shackles, but at what cost to the country. They took the easy way out and IMO didn't really think it through.
Cameras are luxury items, fluctuations don't hurt the general public, they don't depend on it like oil. Canon will lose profit but they should have already planned for currency changes.
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I am interpreting Fujio Mitarais statement quite differently than most of participants in this topic.
In first part it sounds like he considers strong Yen a good thing, at least for Japan if not for Canon inc.
“In Japan, while we can expect to see a temporary surge in the value of the yen,
Second part part sound different, as if it should begin with BUT - Strong Yen is good BUT Brexit is bad news.
...the U.K.’s decision could also bring a halt to the economic recovery that had been underway,”
I understand his statement as if he thinks that Syria/Iraq crisis + Immigration crisis + Brexit crisis leads to instability which will "bring a halt to the economic recovery that had been underway". I am not sure if he is referring to the recovery from worldwide recession or Japans recovery from earthquake caused stagnation being halted by investors fear of another 2008.
Will Canon go bankrupt if WW3 starts the day they release Canons first affordable 4K camera?
;D
:
: :
In first part it sounds like he considers strong Yen a good thing, at least for Japan if not for Canon inc.
“In Japan, while we can expect to see a temporary surge in the value of the yen,
Second part part sound different, as if it should begin with BUT - Strong Yen is good BUT Brexit is bad news.
...the U.K.’s decision could also bring a halt to the economic recovery that had been underway,”
I understand his statement as if he thinks that Syria/Iraq crisis + Immigration crisis + Brexit crisis leads to instability which will "bring a halt to the economic recovery that had been underway". I am not sure if he is referring to the recovery from worldwide recession or Japans recovery from earthquake caused stagnation being halted by investors fear of another 2008.
Will Canon go bankrupt if WW3 starts the day they release Canons first affordable 4K camera?
;D:
: :
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C-A430 said:I am interpreting Fujio Mitarais statement quite differently than most of participants in this topic.
In first part it sounds like he considers strong Yen a good thing, at least for Japan if not for Canon inc.
“In Japan, while we can expect to see a temporary surge in the value of the yen,
Second part part sound different, as if it should begin with BUT - Strong Yen is good BUT Brexit is bad news.
...the U.K.’s decision could also bring a halt to the economic recovery that had been underway,”
I understand his statement as if he thinks that Syria/Iraq crisis + Immigration crisis + Brexit crisis leads to instability which will "bring a halt to the economic recovery that had been underway". I am not sure if he is referring to the recovery from worldwide recession or Japans recovery from earthquake caused stagnation being halted by investors fear of another 2008.
Will Canon go bankrupt if WW3 starts the day they release Canons first affordable 4K camera?
:
A strong currency value hurts companies that export products for most of their income (Canon). They must raise prices which lowers sales and profits. On the other hand, a strong currency lowers prices of imported goods.
That's why Cameras currently cost less in the USA, and the uncertainty as to what will happen for the cost of imported goods and materials in Europe. Its that uncertainty (Fear and Greed) that is affecting currency values. Oil and Gas prices could rise, a huge concern!
Currency values are a two edged sword, helping some while hurting others. Generally, trade flows more smoothly when currencies are stable.
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unfocused
Photos/Photo Book Reviews: www.thecuriouseye.com
So many thoughts...
I am a bit dismayed by these sentiments:
First, the prediction that the discussion had "zero chance to stay civil" has proven to be incorrect. This is one of the most civil and reasonable threads I've seen in a long time.
I understand that it deals with an uncomfortable topic for some people. But, if we go about avoiding uncomfortable, but critically important, topics, we are all lost.
As I said previously, I think this whole issue serves as a valuable reminder to all of us that we are the exceptions in the world. We can afford to debate ridiculously insignificant things day in and day out as though they are important, while many of are neighbors struggle to pay for basic necessities, much less cameras and lenses that cost thousands.
There appear to be massive, fundamental challenges facing the world's developed economies over the rational and equitable distribution of wealth. In the U.S. that is having a profound impact on politics from both the left and the right. I seen nothing wrong or threatening about discussing these things in rational terms.
And, so far, this thread has been rational and respectful.
Now, back to the discussion:
This is what I think he is saying:
A "temporary surge in the value of the yen" would be good for Japanese consumers because they can consume more imported products at less cost. Don't forget that Japan is highly dependent on imports for many products, including a lot of necessities. I believe they import much of their food, for example.
But I think he also is issuing a cautionary statement, pointing out that just as a strong Yen can temporarily help the economy by spurring consumers to buy, a strong Yen over time will hurt home grown companies, of which Canon is one, thus "the U.K.'s decision could also bring a halt to the economic recovery that had been underway..."
Japanese manufacturers, like Canon, Sony, Nikon, etc., can be hurt by a strong Yen that increases the price of their products abroad and cuts into profits. Companies like Canon must make difficult decisions in the face of falling currencies abroad. In effect, the real price of a 1DX just dropped by about 10% in England and Europe as the Pound and Euro drop in value. It's not any cheaper to consumers, but the amount of real value returned to Canon is now less than it was a few days ago.
I think he is worried about the cumulative effect and what that will mean for the world economy.
Of course, as others have pointed out, volatility is the enemy of business. Investors don't want to risk putting money into a volatile market and retreat to safer investments. That in turn reduces the cash available for businesses to invest in the the equipment, research and development they need for new and improved products. With less cash available, Canon will find it harder to bring that new 6D II to market that people are demanding on this forum.
Thus, his fears that the fragile (many would say anemic) economic recovery of the past six to eight years could be derailed as companies lose access to capital they need.
Just some thoughts.
I am a bit dismayed by these sentiments:
slclick said:
davidmurray said:It's a political thread and the whole thing should be deleted, and the OP warned for posting something that infringes the usage terms for this forum.
Don Haines said:
setterguy said:
First, the prediction that the discussion had "zero chance to stay civil" has proven to be incorrect. This is one of the most civil and reasonable threads I've seen in a long time.
I understand that it deals with an uncomfortable topic for some people. But, if we go about avoiding uncomfortable, but critically important, topics, we are all lost.
As I said previously, I think this whole issue serves as a valuable reminder to all of us that we are the exceptions in the world. We can afford to debate ridiculously insignificant things day in and day out as though they are important, while many of are neighbors struggle to pay for basic necessities, much less cameras and lenses that cost thousands.
There appear to be massive, fundamental challenges facing the world's developed economies over the rational and equitable distribution of wealth. In the U.S. that is having a profound impact on politics from both the left and the right. I seen nothing wrong or threatening about discussing these things in rational terms.
And, so far, this thread has been rational and respectful.
Now, back to the discussion:
C-A430 said:
This is what I think he is saying:
A "temporary surge in the value of the yen" would be good for Japanese consumers because they can consume more imported products at less cost. Don't forget that Japan is highly dependent on imports for many products, including a lot of necessities. I believe they import much of their food, for example.
But I think he also is issuing a cautionary statement, pointing out that just as a strong Yen can temporarily help the economy by spurring consumers to buy, a strong Yen over time will hurt home grown companies, of which Canon is one, thus "the U.K.'s decision could also bring a halt to the economic recovery that had been underway..."
Japanese manufacturers, like Canon, Sony, Nikon, etc., can be hurt by a strong Yen that increases the price of their products abroad and cuts into profits. Companies like Canon must make difficult decisions in the face of falling currencies abroad. In effect, the real price of a 1DX just dropped by about 10% in England and Europe as the Pound and Euro drop in value. It's not any cheaper to consumers, but the amount of real value returned to Canon is now less than it was a few days ago.
I think he is worried about the cumulative effect and what that will mean for the world economy.
Of course, as others have pointed out, volatility is the enemy of business. Investors don't want to risk putting money into a volatile market and retreat to safer investments. That in turn reduces the cash available for businesses to invest in the the equipment, research and development they need for new and improved products. With less cash available, Canon will find it harder to bring that new 6D II to market that people are demanding on this forum.
Thus, his fears that the fragile (many would say anemic) economic recovery of the past six to eight years could be derailed as companies lose access to capital they need.
Just some thoughts.
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scrup said:
I remember Richard Branson being quite brutal about companies moaning about currency variations. His point was that businesses should work to be neutral to currancy movements by endeavoring to buy and sell roughly equal amounts of goods and services in each currancy. No one is capable of achieving exact parity, but his point was that there are plenty of companies that rely on a particular currency disparity to survive and if that vanishes then they are doomed.
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rfdesigner said:
So canon is now officially doomed. I think that's the first time we've heard that around here... ;P
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L
Loswr
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unfocused said:
Well, no cheaper for 'local' consumers. But for those in nearby countries, who's currencies are getting relatively stronger, products are getting cheaper. Colleagues of mine in Switzerland already routinely cross the border to shop in Germany and France...in fact, they complain about traffic and crowds on weekends – I expect that will get worse. When the Canadian dollar is much weaker than the US dollar, it's cheaper to buy Canon gear from Canadian sellers (and CPW's street price deals ship from north of the border).
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unfocused
Photos/Photo Book Reviews: www.thecuriouseye.com
IglooEater said:
No one is suggesting that. However, it's much easier for Branson to preach that sort of thing given how diverse his holdings are and the fact that he's more of a reseller of goods and services than a manufacturer. Might be a bit tougher for a specialty manufacturer like Canon or Nikon to follow that advice, since it isn't as though they can just secure their components from the local hardware store.
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C-A430 said:
Let me offer another possibility that might concern him, but which he cannot publicly admit to.
In the world of 'globalization', a CEO is expected to move his production where he can get the cheapest labor, and thus maximize profit. Canon has minimized doing this on all but their cheapest gear (China) and maintained their 'Made in Japan' cache because it allowed them to ensure the highest possible quality. He can say with all honesty that keeping production in Japan is better for the company because quality has value in its own right (lots of other companies have forgotten this, to they ultimate undoing).
The fact that the Japanese and Chinese don't really like each other isn't spoken of, because it need not be - there is a better reason (read: excuse) available.
If either the Pound or Euro (or both) take a nosedive and stay down, not only will it be more difficult to sell in those countries due to the unfavorable exchange rate, it will become likely that there will be a push to move some production there due to the (now) lower costs, and the marketing advantage local production provides.
Yet I suspect he probably isn't going to want to do this, but the quality excuse doesn't fly. Both the UK and Europe have highly skilled optics and micro-technical industries. If they became cost competitive, it would make good business sense to make things there. So how does he handle that?
Worst of all, they (the UK and Europe) will also become competitors (again). Imagine a resurgent Rolleiflex...
That's probably what really has him worried. Japan hasn't had a competitor in the camera arena in decades. That may change here soon.
Exciting times.
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