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Oki Electric Industry Co., Ltd. Annual Report 2001
4
INTERVIEW WITH
THE CHIEF EXECUTIVE OFFICER
Oki Electric Industry Co., Ltd. Annual Report 2001
4
FY
2000 to 2002
FY
2003 to 2005
FY
2006
Phoenix 21
Achieve
stable
profits
Phoenix 21
Sky-High
Become
a premier
network
solutions
provider
Q. Please tell us about the Phoenix 21 plan.
A. In fiscal 1999, the Oki Electric Group recorded losses
totaling ¥47.4 billion. The primary goal of Phoenix 21 was
to reorganize management after this crisis. The main cause
of these losses was a slump in the semiconductor business,
so structural reform of this business was the most important
issue for us. We decided to concentrate resources on logic
and system LSIs rather than DRAM used in PCs. We also
launched projects to cut fixed costs throughout the Group
and endeavored to raise efficiency of personnel and reduce
amortization costs. Our goal was to achieve profitability by
March 2000 and resume dividend payments for fiscal 2001.
We achieved both of these goals in the two-year period.
Another goal of Phoenix 21 is to concentrate resources in
priority business areas and merge unprofitable businesses.
We attempted to strengthen these priority enterprises by
purchasing Toshiba Corporation’s ATM business and form-
ing ties with Cisco Systems KK (Cisco Japan), IBM Japan
Ltd. and Microsoft Japan Co., Ltd. Attempts to withdraw
from unprofitable businesses led us to transfer our
broadcasting equipment business and sell subsidiaries. I believe
the Phoenix 21 measures were smoothly implemented.
Fiscal 2002 is the final year of the Phoenix 21 plan. We
will proceed with preparations for the next management
plan, Phoenix 21 Sky-High, as well as undertake to resolve
remaining issues.
Q. Oki Electric aims to achieve Phoenix 21
Sky-High goals by fiscal 2006. Why was this
particular year chosen?
A. Fluctuations in the telecommunications market are
particularly sharp, making predictions so difficult that plans
tend to cover only three fiscal years. We feel, however, the
extreme nature of the changes and difficulty of forecasting
make long-term and broad goals even more essential. Fiscal
2006 was chosen because we felt specific measures could
be formulated in each fiscal year’s plans, and evaluations of
the results used to adjust the following fiscal year’s plan
while progressing toward Phoenix 21 Sky-High goals.