Era of mass closures: The Japanese businesses without successors

Keeping old tradition alive while keeping current CEO without thinking something need to change, technically is just waiting to be extinct, some businesses just destined not to pass next decade.

Compounding the problem is a feeling among some older Japanese that selling a family business to outsiders is shameful. Some liquidate their firms rather than seeking buyers.

….

Then they are in denial and are shortsighted.

Conversely, I know an 80 year old that has severe knee arthritis that has just opened a new business.

I know Japanese that have dropped dead at their desks here-it’s the way

Maybe this is not such a bad thing. Is Showa Era's end nigh?

Absolutely nobody saw this coming. Lol

Sadly, this situation is the perfect example of "mukashi kara, ima made, itsu made mo" philosophy. Times change. For those who do not change with it, there is no future.

I know Japanese that have dropped dead at their desks here-it’s the way

That happens anywhere, not just in Japan. I used to work for a major chemical company and an executive passed away at his desk while everyone was working. Not the worst way to go but not nice really.

Is Showa Era's end nigh?

The Showa Era will never die! Never!

The glut of affordable small businesses can be a boon for young people looking to break into a sector. Among them is 28-year-old chef Rikuo Morimoto.

When the pandemic prevented him from studying in Italy, he used his savings to buy a four-decade-old diner in Tokyo and start a restaurant at a fraction of the normal cost.

Sorry but this is a poor example of sustainability in the manufacturing sector. It would have made more of an impact if this guy bought the business of the man talked about at the beginning of the article.

There will ALWAYS be people willing to risk their money in the restaurant and food service industry, but they are not going to boost the economy or help sustain the economy.

These older manufacturers should be looking "outside the box" ! They really need to hook up with technical high school's and colleges, offering apprenticeships and opportunity to younger people who are looking for a career in fields other than "office work".

The problem is how they train and educate, if they do it the "old fashioned" way of grinding work all the time, for little money or personal satisfaction, forget it, you are doomed to die. But if you appeal to a work/life balance, and decent living wages, and security, you will survive!

The fossil era has been fading for a long time, unfortunately the fossils running Japan. Inc. have not been able to adapt to the changes. Where are the start-ups that are not reliant on burning fossil fuels, and where are the start-ups that want to participate in a circular economy.

Maybe the young Japanese are waking up to what they really want to do with their lives?

"We just cannot find any workers".

"Nobody wants to work any more".

....hourly wage 1000 yen....ten hour days....

Waves of closures will mean the loss of specialized craftsmanship, unique services and original restaurant recipes that make up Japan's social and cultural fabric, he said.

Pay a decent wage for starters. Then make sure you train apprentices properly. Hand over the business to your padawan if there are no successors or buyers.

Maybe the young Japanese are waking up to what they really want to do with their lives?

Create new business..

These workshops have played an important role in the industry. Major shipyards are surrounded by these small workshops each producing several parts. Sad to see the decline.

I have one friend in his 80s and still running his business with 20 employees who were employed and paid through the entire Covide period while many others lost their jobs.

Young people turn there noses up at farming, agriculture, coach building, skilled plastering, the essential hand skills.

They mostly want to be the next thing in the big city.

It is simple to blame depopulation, however, the digital social media world beckons.

The house builders, the skilled metal workers, the lathe turner, the CNC operators, possibly will one day age into extinction.

Yes the wages are less than encouraging, what has happened to investment in people?

I had my car, Mini upholstery restored, the expert machinist will never see 70 again.

Young people turn there noses up at farming, agriculture, coach building, skilled plastering, the essential hand skills.

When society develops to the point that back breaking labor is no longer the only option in life of course people are going to choose the path of easiest resistance.

However, your statement does not take into account the kids who go to agricultural HS and that are working on farms and ranches today.

Sure there aren't enough, and Japanese agriculture is and always has been unprofitable without government subsidies and the system is as much to blame as anything.

Even down here in Okinawa, people grew sugarcane on their open plots of land, seasonal back breaking work for maybe a couple grand in cash, depending upon the size of the plot of land, but today, it's cheaper and more profitable to asphalt it over and make it a parking lot.

This was always going to be a be problem for Japan. Allow manufacturing businesses to set up in residential areas. When it come to selling off the business the owner in most case has to sell his home along with the business. If is practice was disallowed 50 years ago and made all manufacturing businesses set up in Industrial zones this would not be a problem.

Most of the above comments are right.

Time certainly doesn't stand still - yes it's not Showa - and embracing new technologies, cultural shifts, demographics is essential for growth.

The monolithic ldp has known of these forces and the consequences for decades, but has done little but pay lip service so as not to "upset the constituents". Now reality bites.

Also the chronic worker shortage is at the base of all these woes.

My friend runs a busy successful small truck/coach building company transforming stock trucks to oreder-made products like refrigerated vans, specialized delivery vans etc.

The chip shortage impacted his business, which gave him time to try to recruit new young workers. Zero luck. A few started and quit. He said they don't want to learn welding, electrical installations, machining etc as it's hard, dirty work in all seasons.

He now works 6 days a week 12 hours a day and has only 2 employees, 1 young guy and an old master in his 70s. He used to employ around 7-8 full time. I said "why don't you source OS workers like from Vietnam or Philippines etc"

He didn't give a definitive answer. I didn't pursue the question.

Tough days ahead.

quote: where are the start-ups that want to participate in a circular economy.

They started up decades ago and are now facing closure, as described above.

Many of these small craft-based/skilled-manual industries are fundamental to a 'circular economy'. They build things that can be fixed and repaired, and can fix and repair them, serving local customers. Lose these specialist skills dotted around in every neighbourhood and you lose any chance of having a 'circular economy'.

He said they don't want to learn welding, electrical installations, machining etc as it's hard, dirty work in all seasons.

The last part. Even on days like this (scorching at 8-9am i walk past a bunch of mini factories on the way to work and the guys working away look like they are about to drop dead from exhaustion already. When you add the fact that many of them are earning minimum wage, why in the world would you do that?

Yet another example in Japan of tradition trumping common sense.

Two examples: 1. A relative manned his own small accounting office until age 86 or so, married, no kids, no one to take over, so he had to close doors after his wife became bedridden. 2. Our family doctor is about 90 and still seeing patients despite being half paralyzed and on a wheelchair after a stroke. His daughter is a doctor and works with him at their clinic. He used to travel, play golf and drive a Porsche.  

Both say they just couldn't let their loyal customers down.  But that makes you wonder why work for 60 plus years and not enjoy the fruits of your labor?  Why hold on? I don't see any of my relative's customers visiting him or helping him or his wife now that both are bedridden.  I just scratch my head.

Of course they want it the easiest way nowadays, but not becoming a machinery business owner or other blue collar jobber. No, the hype includes anything home office, influencer, YouTuber, TikToker and such. That’s a fact and we can complain. But it’s also the way out. Look, you only have to find or engage some of those influencers and YouTubers, so that they bring attractive news and videos about such old and dying businesses. You’ll see, there will be a boom immediately, and of course even if 80% will close soon after though, because the young buyers and investors have no knowledge or abilities, but still a splendid 20% of those old businesses can be saved.

How many of the "loyal" customers that these old businesses are only loyal due to years old ties? How many could find better deals elsewhere if they looked? "I buy from Hashimoto because I always buy from Hashimoto!"

This is sad. However, more often than not, its not a case of "we can't find anyone to do our high productivity, high profitability work". These are mostly jobs with poor conditions and do not appeal to anyone not stuck in a rut of already doing them.

As someone who is 54, I find it tenuous to imply anything "four decades old" has historical or traditional value. 40 years ago is "Blue Monday". Companies are born and die every year, part of Schumpter's "creative destruction" of capitalism. Let young people create the future, not shoehorn them into extending the past.

It is quite unfortunate that many successful businesses will shut down unnecessarily. I’ve got a friend in Shibuya whose father owns a very successful tofu packaging machine business but neither him or his older brother want to take it over.

Many of these are profitable businesses with a bright future that are actively looking for new owners or other ways to survive. The BATONZ website mentioned above has thousands of businesses listed all over Japan with very simple purchasing terms. I already found a few in my area with definite potential.

Japan has to follow Canada's trend of putting money into trades training. Even with all the trades schools and really high wages they are still having a hard time filling vacancies.

It is quite unfortunate that many successful businesses will shut down unnecessarily. I’ve got a friend in Shibuya whose father owns a very successful tofu packaging machine business but neither him or his older brother want to take it over.

If it was truly successful someone would be willing to take it over.

Compounding the problem is a feeling among some older Japanese that selling a family business to outsiders is shameful. Some liquidate their firms rather than seeking buyers.

On their heads be it.

It's happening everywhere, not just in Japan.

For example, a lot of Chinese restaurants are closing in USA as the children of the owners now go to universities and white-collar jobs than cooking in a restaurant.

Change happens. Even big companies that stayed still are closed.

I remember a saying when I started working, "Even if you are on the right track. keep running or you will get run over".

The solution: More tourism, obviously. And casinos.

four-decade-old diner in Tokyo

Diner in Tokyo? Where? I'd like to go.

I try to support local businesses as much as I can. Buy something from the smaller shops even if the prices are a bit higher.

No successors often because employees leave due to low wages. The small business owner keeps most is the profits and squeezes staff until nothing is left. Passing on the company to a well paid employee to continue clearly isn’t in anyone’s mind set. In addition foreigners are unable to step in as most of these small companies don’t have the ability to sponsor visa. It’s a huge problem for an aging county with a closed mind to keep things going in a new age.

I try to support local businesses as much as I can. Buy something from the smaller shops even if the prices are a bit higher.

Why? Why pay more money, for possibly an inferior product, or a product that is equal to something you can get at a cheaper price?

If you have money to waste, that's purely your choice, but the average Japanese consumer can not afford to waste money just to support a small business owner.

Yubaru

   I try to support local businesses as much as I can. Buy something from the smaller shops even if the prices are a bit higher.

> Why? Why pay more money, for possibly an inferior product, or a product that is equal to something you can get at a cheaper price?

> If you have money to waste, that's purely your choice, but the average Japanese consumer can not afford to waste money just to support a small business owner.

Because the local shops are local people and part of the community. Plant shops. Vegetable shops, Bakeries. Hairdressers. Meat shops. Gardeners. It is important to support your local community otherwise it will die out. The big stores are here but I don't know the stockholders. The local community supports my own business.

If I need a trade I search for a local person.

Many Japanese continue to support their local shops and communities.

You are free to do whatever you want.

Because the local shops are local people and part of the community. Plant shops. Vegetable shops, Bakeries. Hairdressers. Meat shops. Gardeners. It is important to support your local community otherwise it will die out. The big stores are here but I don't know the stockholders. The local community supports my own business.

Everyone is committing business suicide! The average Japanese consumer is living in the 21st century, not wishing for the old days of Showa!

Far too many of these businesses made a choice to not be competitive or to join together to work collectively to succeed for the future.

People CAN NOT afford to support locally, because locally costs too much, and they have families to feed and bills to pay.

Your money your choice, but reality is MOST Japanese dont and can not support the local shoten owner, they cost too much and dont offer products they need daily! Great for tourists and nostalgia, but reality is different!

In addition the situation is a lot more serious than this in regards to Japan's future.

https://www3.nhk.or.jp/news/html/20230721/k10014133051000.html

Because the local shops are local people and part of the community. Plant shops. Vegetable shops, Bakeries. Hairdressers. Meat shops. Gardeners. It is important to support your local community otherwise it will die out. The big stores are here but I don't know the stockholders. The local community supports my own business.

You obviously dont have a family with mouths to feed, or you are independently wealthy and can spend your money freely. Must be nice.

Reality is different for the overwhelming majority of Japanese people.

Yubaru

   Because the local shops are local people and part of the community. Plant shops. Vegetable shops, Bakeries. Hairdressers. Meat shops. Gardeners. It is important to support your local community otherwise it will die out. The big stores are here but I don't know the stockholders. The local community supports my own business.

> Everyone is committing business suicide! The average Japanese consumer is living in the 21st century, not wishing for the old days of Showa!

You can speak for an entire nation?

Far too many of these businesses made a choice to not be competitive or to join together to work collectively to succeed for the future.

They are people who have run their shops and businesses for decades. They are part of a community.

People CAN NOT afford to support locally, because locally costs too much, and they have families to feed and bills to pay.

The majority of our community continues to support local businesses.

Your money your choice, but reality is MOST Japanese dont and can not support the local shoten owner, they cost too much and dont offer products they need daily! Great for tourists and nostalgia, but reality is different!

That is your opinion. The shop selling the vegetables, for example, is selling locally grown produce and prices equal to the large food stores and fresher.

I guess you are happy to live in a community without the small family businesses including all the healthcare clinics and you go to the nearest big town or city for your needs.

You obviously dont have a family with mouths to feed, or you are independently wealthy and can spend your money freely. Must be nice.

We are semi-retired and need to be careful with our money.

Reality is different for the overwhelming majority of Japanese people.

You don't speak for them.

Where are the innovators? The Hondas, the Masahiro Haras? The Kumo Kenghos? The Moritas and Ibukas? The Totos? (no joke, he was a great innovator)

Yubaru

I only originally stated I continue to support the local business community before you went into attack dog mode. If you don't want that it is your choice. So provoked by such a small comment.

I try to support local businesses as much as I can. Buy something from the smaller shops even if the prices are a bit higher.

Correction: not Toto, but Okura.

Yabaru

I have been self-employed or running my own business for 50 years and my family for many decades way back. So we support the small guy as well as the megastore.

Who would want to take over a business with no other employees it and enought time to have quiet recorder practice?

The real reason these businesses cannot find buyers is they are no longer profitable. Many are only a hobby to keep the old man out of the house, not a profitable venture

Near me was a nice old carpenter and i don't mean a daiksun i mean a proper craftsman. We were close and i took some local woodworkers to see his place and they all just scoffed at it even though he was willing to teach them all he knew and hand it over for free. I lost all respect for said daiksuns that day. Remove kids games and switch on their brains could be a step in the right direction.

De-industrialization of Japan is in action.