MAKING THE SUN RISE AGAIN ON JAPAN
"Japan's real crisis" (Cover Story, May 18) explains that the problems are caused by hidden debt and that the prescription from the U.S. of lowering taxes could make the debt problem worse. On the balance sheet, however, Japan compares favorably with the U.S. Although Japan has high debt, it also has the largest rate of personal savings in the world. The U.S., with relatively small debt, has virtually no private savings.
If Japan can find a way to use its private savings to liquidate its public debt, then it could again enjoy the high growth rates of the four prior decades.
San Jose, Calif.
Foreigners with a superficial understanding of the country routinely place blame on either Japan's politicians or bureaucrats. For what it's worth, Japan is a democracy. Its policies are the result of elected politicians. Three cheers for Robert Neff who pointed out that the Japanese people are also to blame.
You suggest that Japan's closed markets and its unwillingness to change are leading to ruin. Yet Japanese products continue to drive U.S. competitors to the brink. Fuji Photo Film Co.'s predatory practices have forced Eastman Kodak Co. to take drastic measures in the face of a flood of low-priced photographic products that have unlimited access to our market. The Japanese auto manufacturers now have a large share of the U.S. retail car market, and they are threatening to take even more.
It seems that Japan Inc. is doing well as it continues to export its problems, encouraged by the weak yen. From my perspective, the Japanese are winning the trade war, and America's selfish demand for low prices today and "to hell with tomorrow" is terrifying.
Rochester Hills, Mich.Return to top
REPORTS OF CANCER'S IMMINENT DEATH WERE AN EXAGGERATION
"Of Mice, Men, and Cancer Cures" (News: Analysis & Commentary, May 18) points to the gap between hype and uncertainty in modern drug development. For a therapeutic protein that works in the animal-disease model, there is less than a 10% chance of it getting to market. It also takes at least six to eight years to complete the human testing required for regulatory filing before it can be approved. And the candidate could drop out during any of the three phases of clinical trials for reasons ranging from lack of efficacy to high toxicity.
The hype of this miracle cure has generated speculation in the biotech company that owns its development rights and has created false hope for patients desperate for a cure. The failure will not only affect the stock price but will also undermine confidence in the biotech industry. While the media are eager to publish stories that attract attention, it also is their responsibility to caution the reader. A clarification of the risks and realistic expectations might aid the commercialization process of future biotech products by building consumer and investor confidence.
TokyoReturn to top
TRW IS DOING JUST FINE, THANKS
In "Air bags are deflating TRW" (The Corporation, May 18), you stated that our share of the air-bag market peaked in 1996. Not so. TRW's share grew in 1997. Also, you reported that one of our competitors "picked off" some of our market share. Not so. TRW took market share from it. Air bags represent about 17% of TRW's revenues, not 30%. And the slight decline in air-bag margins reduced net earnings by $9 million, not $19 million.
More important is the omission of any reference to the record revenues and earnings and our long-term goal to double the size of the company in seven years. We're on track to do that, and we don't worry excessively about quarter-to-quarter comparisons.
Most recently, we acquired BDM International Inc. for close to $1 billion, as you mentioned. But that's all you said about one of the most significant acquisitions in the company's history. Overall, our company is doing just fine.
Joseph T. Gorman
Editor's note: A TRW official told BUSINESS WEEK that air-bag problems reduced net earnings by $18.6 million in the first quarter. The article should have stated that air bags and related restraints, not air bags alone, represent about 30% of total revenues.Return to top