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Hatoyama to mull public assistance for JAL [Kyodo News International, Tokyo](Kyodo News International (Tokyo, Japan) Via Acquire Media NewsEdge) Sep. 25--PITTSBURGH -- Japanese Prime Minister Yukio Hatoyama said Thursday in Pennsylvania that the government may need to consider rescuing Japan Airlines Corp. using public money, while the transport ministry launched Friday in Tokyo a task force of corporate turnaround experts to help rehabilitate the struggling airline. JAL had asked the government for emergency loans backed by taxpayers' money under a rescue program recently launched to help improve the balance sheets of big firms struggling after the Japanese economy got mired in the global recession. "Public support may become necessary," Hatoyama told reporters in Pittsburgh where he was attending the Group of 20 summit of major advanced and emerging economies. Hatoyama said he wants to finalize the envisioned rescue scheme "as soon as possible" after talking with Land, Infrastructure, Transport and Tourism Minister Seiji Maehara. JAL, which has been urged to redraw by late November a business improvement plan it had been seeking to compile by the end of September, must come up with a "more solid" restructuring scheme, Hatoyama said. Under the guidance of the new task force, JAL will draw up an outline of the new plan by around late October and finalize it around the end of November, the transport ministry said. JAL had originally planned to submit to the ministry a restructuring plan by the end of this month. The latest government move gave the company two more months to redraw the plan after Maehara expressed doubts about the feasibility of its original proposals. The five-member task force is led by Shinjiro Takagi, who served as chairman of the decision-making panel of the now-defunct Industrial Revitalization Corp. of Japan, the body which assisted heavily indebted but otherwise viable firms from 2003 to 2007, the government said. Assisting Takagi in the new entity is Kazuhiko Toyama, who was the IRCJ's chief operating officer. The task force will take charge of due diligence on JAL's assets and will scrutinize its business improvement plan to offer advice for the future direction of the airline. In response to the launch of the task force, JAL put off submitting a revised corporate pension program to its internal pension fund committee, originally scheduled Friday. The airline originally planned to drastically cut pension costs -- more than 50 percent at the most -- as one of the key restructuring steps. For any such plan to push through, approval from more than two-thirds of the beneficiaries is needed, but given the strong opposition from many of them, the airline had been revising the program. JAL said it wants to explain the revised plan to the transport ministry's task force first. The company now expects to notify both its incumbent and retired employees about the pension program in October or later. On Thursday in Tokyo, JAL President Haruka Nishimatsu met with Maehara, asking the government to use the rescue program that was applied to Elpida Memory Inc. earlier this year. The struggling chipmaker signed in August to receive some 30 billion yen in investment from the state-backed Development Bank of Japan. If the investment fails, the government will cover 50 to 80 percent of the losses incurred by the DBJ with taxpayers' money. Although Nishimatsu did not disclose the amount sought, Japan's top airline said it plans to seek government-backed loans to survive the global economic downturn and remain competitive in the industry. Earlier this month, JAL submitted a draft plan to an expert panel set up under the previous administration. In the draft, JAL said it would cut the jobs of about 6,800 employees, or around 14 percent of its group workforce, and scrap a total of 50 domestic and international routes over three years through March 2012. But Maehara has said such efforts are insufficient to revitalize JAL. To see more of Kyodo News International, go to http://www.kyodonews.com Copyright (c) 2009, Kyodo News International, Tokyo Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |