October 30, 2007,09:13 +0900(JST) Safety & Environment (From the October Message to Employees)

Hello, this is Masayoshi Matsumoto.

As we stand at the start of the second half of the fiscal year, I made a renewed call for cooperation with the corporate-wide campaign on “safety” and “quality,” themes that have been our priority issues from before.

Although staff members who have access to the corporate network already have read and considered the message carefully, I wish to re-state some key points in my blog as well.

Let’s start with safety. Our aim is to create a corporate culture where “Safety comes first.” I request you all to promote safety activities with a strong determination to achieve an absolute zero-accident record this year.

Regrettably when I look at the number of accidents involving injury that occurred during the first half of this fiscal year, I notice that improvements are not great. In fact, the number of accidents exceeded that of the previous year. We are in a state of emergency. After August, we tried to put a stop to this situation by conducting an accident prevention campaign, distributing leaflets and badges personally to employees and strengthening face-to-face communication in order to prevent injury-causing accidents. However, the same kinds of accidents as before were repeated. It seems that various rules on safety are not operating properly.

It is four years since the emergency reinforcement actions on safety were initiated. With regard to safety measures, we should never just go through the motions in a routine manner: I request managers and supervisors to conduct activities that will continue to strike a chord with the sensibilities of staff who work on the frontline.

I believe that footwork and dialog are the most important things. Managers and supervisors should aim to walk the shop floor three times a day. To this end, I urge you to undertake any necessary input of resources and transfer of authority.

By talking to your people, please identify dangerous jobs and equipment that falls short of safety standards. Take action without any delay. Should an accident occur, repeat the “why-why analysis.” Adopt full and thorough measures to prevent recurrence by investigating not only the problems but also the reasons why workers acted in an unsafe way.

The slogan for this year’s National Industrial Health Week in Japan roughly translates as “With a relaxed mind and body, let’s all create a healthy workplace.” I strongly urge each and every one of you to reaffirm the need for good health management and make an effort to make “safe and sound workplace” as is written in the Sumitomo Electric Group Charter of Corporate Behavior.

Moving onto quality, as a 2-year activity from the last fiscal year, we have been engaged in the QR-1 Campaign Phase II. This second half of the current fiscal year is the final six months of the program.

A review of our quality performance for the first half of this fiscal year reveals that our ideal target of zero-dissatisfaction (nil customer complaint) is still a very long way out of our reach. I believe that complaints should never be received from customers in the first place, but the reality is far from the ideal.

We have a lot of problems originating from the product design stage. You must review problems that occurred in the past and you must re-check in the manufacturing stage that error-correction work is being implemented according to rule.

The numbers of customer complaints and total losses are decreasing but I want to ask all sections yet again to look carefully at all processes from the design stage to the manufacturing stage at the outset of the second half of this fiscal year, re-examining what the priority issues are and ensuring that there are no omissions in our shared issues. Line workers and staff should unite forces in earnest pursuit of activities dedicated to the “absolute zero” of zero-dissatisfaction and zero-defect.

My final request for the following six months is for everyone to be tenacious in his or her effort to achieve our goals under the strong leadership of the division manager.

Group-wide activities relating to safety and quality are priority tasks incorporated in the Sumitomo Business Spirit and the Sumitomo Electric Group Corporate Principles. The Group must share totally the same understanding regarding the importance of safety and quality: let us together build our foundation as a “Glorious Excellent Company” to achieve VISION 2012.

October 26, 2007,09:36 +0900(JST) Excerpt from the Year 2000 House Organ (2)

This is the sequel to Excerpt from the Year 2000 House Organ (1).

I would be adding some comments after the excerpt.

Excerpt from the Sumitomo Electric House Organ:

As an absolute prerequisite of a company’s survival, Dr. Kotaro Honda says that Sumitomo’s “traditional spirit is of a national character and of service.” “National” in more modern words would be “social” perhaps. Thinking of the corporate environment of today, this may sound anachronistic and too utopian.

Nonetheless, in the context of the fact that the major assumptions in corporate aims are rapidly changing these days, such a robust leadership spirit that has stood the test of time should be infused with the excellent spirit of different cultures and adopted as a basis for new inspiration. We should not confuse steadiness with indolence: the great responsibility given to us, the working generations, is to be imbued with a sense of mission to create a corporate infrastructure that is solid and prepared for growth.

The congratulatory message concludes, “…if (a person of good character) put priority on industrial morality… superiors and subordinates will unite in mind and heart to faithfully execute their duties with utmost sincerity, which means that good products can be manufactured at a cheap cost. (…) It is my keen desire that you embody Sumitomo’s traditional spirit, pay heed to industrial morality, unite and cooperate in your utmost endeavor for the company.”

Having read the message so far, what are your impressions? Obviously, it is quite an old document so some of the expressions are antiquated, but Dr. Honda’s dignified attitude and the unwavering spirit against the tides of change have undoubtedly touched you all powerfully, and deep inside your heart, you must have felt an empathy with him.

Even the old-fashioned expression “industrial morality” which is an expression no longer in current usage, seems for us Sumitomo employees to be an easy expression to absorb, if we consider it in the light of the business spirit enshrined in the Sumitomo Business Spirit alongside the two business principles. I refer to “attaching importance to technology,” “respect for human resources,” “long-range planning” and “profit for self and others, private and public interests, are one and the same.”

The crisis that Dr. Honda was apprehensive about, the situation where we “lack the concept of industrial morality” unfortunately pervaded Japan during the economic bubble in the 1980s and in the recent boom of short-term speculative investment that can be called “money gamble,” which have scarred the country.

How distasteful the upstart IT tycoon was, busy making money saying “You can do anything if you have money.”

There is an expression that explains the principles of Japanese haiku poem, “fueki-ryuko” (eternity and fluidity), meaning that creativity derives from the synthesis of tradition and innovation. I want you to remember clearly that for the Sumitomo Electric Group, conducting business in the spirit of Dr. Honda’s message and the Sumitomo Corporate Business Spirit means “eternity.”

October 23, 2007,11:02 +0900(JST) Glorious Excellent Company Award Ceremony

Award CeremonyThe Sumitomo Electric Group’s affiliated companies total as many as 270 in consolidated subsidiaries alone in Japan and overseas. There are more than 130,000 employees. I may be blowing my own trumpet but I am proud that each company produces and provides distinctive, unique products and services as well as contributes to society at large, including the creation of employment.

“Glorious Excellent Company” is the ideal vision I have for the Group. I have told you time and time again that I will not relent in my effort in realizing my vision. To this end, unity and cooperation of all Group companies are necessary.

A little while ago, we decided to inaugurate an award system from this year. We called it the Glorious Excellent Company Award. The Award is intended to nurture a sense of unity and cohesion. It will be given to companies among our Group that are recognized to have achieved excellent results after a fair assessment of target attainments including management indicators such as profit and ROA, together with safety record and compliance.

The First Award was given to 18 companies with excellent results. Their top management attended the ceremony. More than half the winners of the award, 11 in number, were from overseas. It was driven home to me that the global operations of the Group is truly underway.

I am pleased from the bottom of my heart that all the Sumitomo Electric Group company workers throughout the world share the same management philosophy and vision and are doing their utmost to achieve further growth of the Group. The Award Ceremony honored Group members who were chosen to represent our workers. Therefore, I hope to see competition of a very high standard taking place among all companies so as to win this award.

I must finish by telling you one regret I had about the Award Ceremony.

The presidents of Sumitomo Electric Group companies from different countries came to the ceremony. Sadly, all were men, and furthermore, although we have posted here the photo of Mr. Wyatt, the COO of ExceLight Communications USA, receiving the award, he was the only non-Japanese. All the others were Japanese presidents. The Sumitomo Electric Group is active in pursuing various measures to facilitate global management. I think it is important to push forward the recruitment of local human resources and to create a business environment in which a diversity of people can come forward to receive these awards.

October 19, 2007,08:48 +0900(JST) Excerpt from the Year 2000 House Organ (1)

Hello, everyone.

I can think of plenty of things I wish to convey to you through this blog, especially to members of our Group companies but due to constraints of time, I cannot often put pen to paper. I get quite frustrated about this but I’d like to add a new entry at least once a week.

I found a Sumitomo Electric house organ of July 2000 in my desk. I’d like to share this with you today. This is a message I wrote when I was the Managing Director.


When I visited Tokin Corporation, which is a member of the Sumitomo Group, I was shown a sepia-colored four-page document that is obviously steeped in history. On it was written a congratulatory message in the hand of Dr. Kotaro Honda, the inventor of KS steel*1. This was a valuable document, with inscriptions between the lines that bespeak the agony of composition. I was greatly moved by the universality and immutability I discovered in this writing, which retains relevance to this day. This message was delivered at the completion ceremony in 1938 of Tohoku Metal Industries Co., Ltd, the forebear of Tokin.

At the request of the Japanese Government, Tohoku Metal Industries was set up to manufacture and sell materials and equipment for telecommunication under public-private-academic partnership. Full technical cooperation was provided by Dr. Honda’s Institute for Materials Research*2, deeply associated with the Sumitomo family, and the Research Institute of Electrical Communication*3.

The socioeconomic environment cannot be said to be similar today, sixty odd years after the time when the nation was beset with a sense of crisis of survival. Yet, because we are at the very juncture where there is pressing need for huge structural reform, isn’t it important that we listen to the words of our forebears and ask ourselves what our basic spirit ideally should be? I borrowed some key words from Dr. Honda’s message in framing my thoughts into words.

First, analyzing the situation faced by Japanese companies now, the following is my view, at the risk of being accused of going too far in my interpretation.

In the affluent economic superpower Japan, where spiritual depravity and lack of any sense of threat prevailed, an “industrial morality” has come to be missing. There is no “understanding of what important relationship one’s industry of employment has with society and (no) determination to produce quality products at a reasonable price by working faithfully in the awareness of the importance of one’s responsibility.” Such a state of affairs has led to a society about to be thrown into chaos, a society that has created “people who only give weight to the skills of employees and do not pay heed to their character” and a crisis of “poor industrial morality.”

Globalization is confronting us with an unprecedented scale of challenges that ripple out from the cross-cultural cross-system situations and frameworks. I think every one in an organization has to accurately understand the position he or she is placed in and implement a clear self-orientation of the awareness that he or she is the “nucleus” that determines the fate of the company.

*1 Strong magnetic steel named after the initials of Kichizaemon Sumitomo, the benefactor to the Tohoku Imperial University’s Second Division of the Provisional Institute of Physical and Chemical Research (now Institute for Materials Research) founded in 1916.

*2 and *3 Research institutes both belonging to the Tohoku Imperial University (now Tohoku University).

October 2, 2007,09:38 +0900(JST) View from the President’s Office (2)

Nakanoshima Central Tower Building (right) and Asahi Shimbun’s Osaka Office Building (far left)I described to you the landscape along the Tosabori River last time. Across the river, I can see the Osaka Branch of the Bank of Japan, the Nakanoshima Central Tower Building of Sumitomo Life Insurance Company, the Festival Hall and the Asahi Shimbun Newspaper’s Osaka Office building , and in the distance, the Kansai Electric Power Company’s headquarters building. From old and historic buildings to ultra-modern skyscrapers, the cityscape here is unique and very much what one thinks of as a typical landscape of Osaka.

Nevertheless, I come to feel a tinge of sadness as I glance out, because even though splendid new buildings get built in urban redevelopment, they are only buildings housing offices for rent. There are hardly any new corporate headquarters buildings. In other words, I see under my nose the fact that the headquarters of corporations are over-concentrated in Tokyo.

News reporters often ask me, why doesn’t Sumitomo Electric relocate its head office to Tokyo, and is there any benefit from having your head office in Osaka?

I reply to them with a wry smile and say that unfortunately, there are no benefits. However, there are no disadvantages either.

Look at the U.S. It’s a big country, but the headquarters of large corporations are not all in one place. They are scattered all over different states. 3M, whose top executive I am friendly with, has its head office in the suburbs of St. Paul, Minnesota. It is indisputably a blue-chip company by global standards.

There are 459 affiliates of the Sumitomo Electric Group in Japan and globally. Of these, 256 conduct business overseas. Both in turnover and profit, the proportion that overseas business generates is increasing year on year. This trend may accelerate but is not to abate. We must develop along with the tide of globalization.

In view of the advances of information and communications technology (ICT), it doesn’t matter where in Japan the business headquarters are located (there is no problem with it being overseas either). That being the case, I believe that the correct path for us to take is to stay in Osaka and repay it for having nurtured Sumitomo over these past four hundred odd years.

When I think like that, I become very disgruntled with the view out of my window. As is often pointed out, Osaka has very few greenery or parks, and even though rivers are improving, they are still polluted. In a corner of good scenery, you often find illegally-dumped waste…

There are initiatives in Osaka today to create a new and beautiful city. Citizen-participatory tree-planting projects are in place to plant cherry trees to create a tunnel of blossoms over a walkway in spring and also to plant one million rose bushes.

To give greater impetus to such movements, I think we need to create something like London’s Hyde Park or New York’s Central Park in Osaka. When I recall the various charming cities I have visited, they have many parks which offer citizens a place for leisure and relaxation. We need to make the existing parks in Osaka safer and more attractive and at the same time, create several new and large parks, if possible. It is my belief that the regeneration of this historic city will begin from here.

SUMITOMO ELECTRIC President CEO Masayoshi Matsumoto

Born in 1944 in Hyogo Prefecture, Masayoshi Matsumoto joined Sumitomo Electric in 1967. After serving as General Manager of Chubu District Office, Managing Director and Senior Managing Director, he assumed office of President and CEO in June 2004.

His leisure activities include jogging, reading and art appreciation. Also a seasoned athlete, he played baseball in junior high school and practiced judo in senior high school. In university, he threw the javelin competitively and participated in all-Japan inter-university competitions.

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