Nippon Steel Corporation

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The Nippon Steel Corporation (Japanese 新日本製鐵), formed in 1970, is one of the world's major steel producing companies. Nippon was created by the merger of two giants, Yawata Iron & Steel and Fuji Iron & Steel, into a juggernaut. Beginning in early 1981 the company cut production and saw a sharp decline in profit that fiscal year. Forced to close furnaces, the company exhibited a typical Japanese corporate aversion to layoffs, opting instead to offer standard early retirement enticements but also less conventional schemes such as a mushroom cultivation venture that used the surplus heat created by steel furnaces to temperature control a fecund fungi complex^{[1] (http://wikipedia.cas.ilstu.edu/index.php/Nippon_Steel_Corporation#endnote_shroomz)}. Attributing the drop to higher material costs, the company entered into another troubled year. In 1983, the company reported the end of the fiscal year (March 31) would reveal Nippon was in an even more beleaguered situation. A fall in demand brought about a 39% tumble in profits from an already weak previous year. During this time the entire Japanese steel industry struggled in a period of turmoil as other nations such as South Korea with only a fraction of labor costs won over business. The company announced a loss in 1986, prompting a determined effort to diversify away from the moribund "smokestack" industrial sector and to provide new work for thousands of employees that would be transferred from closing furnaces. The company expanded or further established itself in semiconductors, electronics, a theme park, software, and even human resources products. The company bucked seven struggling but profitable years when it returned to loss in 1993. Again, thousands of employees would be transferred to new operations. Due to cost-cutting the company returned to health in 1995. However, Nippon reported earnings in 1999 suffered from an overwhelming charge needed to cover pension costs, a problem not uncommon for shrinking industrial giants. 2002 and 2003 would be back-to-back loss years, but robust Chinese demand for steel returned the company to profitability.