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Nikon may relocate some production from Sendai to Malaysia

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Bloomberg reports that Nikon is currently discussing with Notion Vtec the possibility of relocating some of the production from Sendai to Malaysia.

Back in January of 2010 Nikon made a major investment in Notion Vtec (Nikon acquired 10% of the company).

Notion Vtec produces the following SLR components (from their website):

  • Camera barrel is a component used for changing the focal length of the lens which is part of the zoom
  • Lens mounting ring is where the lens can be mounted on to camera body
  • An assortment of inner cam barrel for the camera lens as well as internal camera parts

Nikon plant in Sendai was closed a week ago after a massive earthquake and tsunami devastated the area. The factory in Sendai produced the high end Nikon DSLR cameras like the D700 and D3s.

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  • http://www.brandonburtner.com/ Brandon B

    Hmm, interesting. Hopefully Japan and the Nikkei rebound quickly!

  • Robertstoffer

    Hope they rebound quickly too.

    Also curious if the equipment will get the same quality from the two places

    • http://www.atlasomega.com Calvin

      I doubt it. Even if the new plant were in Japan, there are bound to be quality control issues when changing locations like that.

    • LOLCATmasterFTW!!!

      Every Ipad and Iphone is made in China, most of the parts of your computer, dish washer, microwave oven, TV, remote control, Playstation, Wii, Xbox360 and so on with millions of products, The same for Malaysia the difference between good and bad is quality control of every process, no high end brand (be it Nikon, Canon, Sony, Olympus, Samsung, Panasonic, Pentax,etc.) will risk their quality control now with how the circumstances are in Japan.

      It is simple logic.

  • Adam

    Well I hope the final assembly (and assembly of important components) of Nikon high end DSLRs will still be made in Japan cause according to my friend, a Suzuki Swift assembled in Japan is of higher quality then a Suzuki Swift assembled in Malaysia.

    Lets us hope that Nikon will be able to resume operation as soon as possible and that Japan will be able to rebound back from this incident.

    Really feel bad for them, wish I could do something else besides donating.

    • Global

      Nikon may have more strict quality control. The pro-gear was manufactured at Sendai and standards will likely be transported with the work.

      Malaysia, China, etc, generally have lower gear to manage with less rigid controls and often materials. Nikon will not likely take short cuts for pro gear, however.

      Furthermore, oversight teams will likely be present as they will not be occupied in Sendai and while all employees will have time to mourn, the next month or two will be very active.

    • Ronan

      Thats not saying much… have you looked at the Swift lol

    • ZoetMB

      With proper management oversight, there is no reason why cameras manufactured anywhere in the world can’t be exactly the same, especially if the machine tools have survived the earthquake and tsunami and are shipped from Sendai to the new factory.

      There’s a big difference between:
      - manufacturing out of the home country, but owning and managing the factory.
      - manufacturing out of the home country, but directly managing a 3rd party factory.
      - contracting with an independent manufacturer, but you do the design and specs
      - contracting with an independent manufacturer, but they do the design to your specs
      - independent manufacturer designs a camera (or whatever), you stick your name on it (OEM).

      There’s no reason why the first three options above can’t result in exactly the same camera as one produced in a Japanese factory. Remember that many processes are automated and parts are produced elsewhere.

      Most Japanese cars produced in the U.S. are indistinguishable from their Japanese counterparts. And sometimes, things can get strangely confused: my Acura (which is the American division of Honda) was produced in Japan, but my Honda (supposedly Japanese company) was produced in the U.S. But as we’ve seen with Toyota, as these companies get too large, they begin to have quality control problems just as American manufacturers have always had.

  • R R

    I wonder where is the new D800 been built? but first things first.. Hope Japan recovers and its people do too.. I can wait for my D800.

    • ja

      its all exciting as to what nikon will do next , due to nature unleashing its force on japan, i fully support japan and the people of japan they may have been knocked down but they will surely stand up .
      as for the new cameras that seem to be coming out this year we may see an early realise of the D4,D400,D800 maybe not in the order.
      I am NIKON

  • FX DX

    Good for Nikon. Companies need to stay in business. If Apple can produce quality iDevices in China, I am sure Nikon can keep its quality in Malaysia.

    Let’s bring out the next generation FX cameras and put Nikon back on track.

    • ja

      here here

  • RiverRoadMan

    So all those Japanese workers who need a job to help rebuild their lives are basically SOL?

    • bimmerlovere39

      By the time Sendai is ready to really get back into the swing of things, the D4 will likely be nigh.

      I have no doubt that Sendai will be operating at capacity for a good while after the D4 drops – to say nothing of a D800 or D400.

    • http://www.russbarnes.co.uk RussB

      It is indeed an interesting observation. I doubt however that Nikon will relocate their operation, it sounds to me like a temporary change, though if you were managing risk in the organisation you would have to say that production in Japan represents a major long term risk, especially if the nuclear issues don’t work out. In fact it may not be possible in that region at all any more. Only time will tell.

      • Global

        The factory will be usable again. A power grid will be established and a water pump provided and things will return to production if the building is sound following repairs. Its indicated that it is likely sound. Therefore, production waits primarily on government services, assuming the staff is emotionally able (and they should rightfully receive lots of time to mourn).

        Many will want to work to help out and be productive. Its human nature. A shift to Malaysia in the meanwhile is a completely rational decision for the short-term.

        • http://www.bythom.com Thom Hogan

          While I hate to bring up the elephant in the room…

          One problem with Sendai at the moment is that it is right at the 50-mile boundary suggested by the US in regards to the Fukushima nuclear plant. That 50-mile boundary is significant, as it basically represents what most experts seem to think is the worst case scenario at Fukushima: loss of control of the stored rods coupled with a full melt-down in reactor 3. Even if Sendai (actually Natori, which is even closer to the boundary) was outside the boundary of that worst case scenario, you’d have to think that as much as a quarter of the employees might live within the boundary and need to move. Beyond that, the 50-mile ring intersects many of the old infrastructure routes (roads, power lines, etc.), so it wouldn’t just be repairing that would have to be done, it would be moving infrastructure.

          A company like Nikon can’t necessarily wait to see just what happens and how fast. The Sendai plant is really two things: machining and assembling. They could easily move the machining anywhere, including offshore, and simply relocate the assembly elsewhere within Japan. The trickiest part of that is the old-school Japanese belief in employment for life. The assembly workers would be retained in this scenario, but the machinists might not be. That would represent a violation of an unwritten compact with employees.

          • Soap

            I don’t fully understand the thrust of your argument re:the 50 mile radius.

            The 50 mile radius is, as I understand it, likely overly broad for the acute issues surrounding a full containment breech and too conservative for the chronic ones. For in the worst case scenario chronic contamination will likely extend for far greater distances than 50 miles, and will spread with the winds, not in some pretty radial pattern. The proximity is not the determining factor (the entire nation of Japan (and beyond) is at risk), but rather the direction the wind is blowing if and when.

            I bring this up not as a challenge, but rather as a request for clarification.

            • http://www.bythom.com Thom Hogan

              The situation is fluid, thus the proposed solution is conservative. As long as the Fukushima plant were producing radioactivity into the air under the worst case scenario, you’d have to have the 50-mile radius because winds aren’t constant. They may blow one way this morning, another this afternoon (that was exactly the case yesterday).

              People are still seeing the problem as “an event.” It’s not. It’s a continuous problem and will remain one until they either cool the plants or bury them, and even in those cases the “event” may continue for some time.

              Radioactivity is a four prong thing: distance, dosage, accumulation, and time of exposure. The 50-mile radius tries to take the worst case of those first three things into account and essentially tries to zero out time of exposure. You can’t keep going INTO such a zone because of the third and fourth things, even if the first two things are minimized.

              The last number I heard at the plant was a general pattern of about 3100 milli Sv/hour as a max (though even the TEBCO folk keep confusing milli and micro, so you can’t always trust their data ;~). While that dissipates with distance, accumulation and time of exposure become important to control. But that level is high enough to cause ARS, which is why they’re having so much trouble doing anything at Reactor #3, which seems to be the culprit in producing it.

            • PHB

              The issue is more than just the nuclear plant itself, there is the devastation of the infrastructure caused by the other two disasters and the problem of staying out of the way of other efforts to fix things.

              One big problem is that Japan is a long thin island and a 50 mile exclusion zone takes quite a bite out of it.

              Does anyone know what the situation is for Canon and Sony?

              The way Japanese industry works, nobody is going to be launching a new model unless the competition are also able to recover.

      • lolly

        “In fact it may not be possible in that region at all any more”

        I’m thinking along the same lines … radioactive contamination. Who wants to buy a brand new Nikon D3s or a D4 from Sendai … please raise your hand.

        I think the workers from the Sendai plant will gladly relocate to Malaysia/Singapore and start anew.

        • http://www.bythom.com Thom Hogan

          I found out another tidbit that has to be causing some rethinking in Japan.

          Japan doesn’t exactly have a national power grid. They have two, and they’re not compatible. Thus, when the 11 reactors went off-line in Northern Japan it essentially took a huge chunk of power generation out of the Tokyo and North area. And they can’t move power from South of Tokyo to the North because the North system is 50 Hz and the Southern system is 60 Hz. They apparently don’t have the heavy duty converters that would need to be between the lines to transfer.

          To me, that’s a cruel infrastructure mistake, and it makes the Fukushima reactor situation doubly cruel. Essentially, something like 4.5 megawatts just disappeared from the Tokyo/North system and it can’t be replaced easily by anything that doesn’t already exist in the North system. With 5 other reactors in that area down, we’re talking about nearly 10 megawatts unavailable. That’s the real reason why they’re doing rotating blackouts and requesting things like advertising billboards to go unlit.

          Thus, all those factories in the area have a quadruple whammy to try to figure out: (1) how fast they can fix equipment and structure; (2) whether they still have the personnel available to be productive; (3) whether they might end up in a contaminated zone due to Fukushima; and (4) whether they can operate on less than 100% power availability. As you might be able to tell, the nuclear situation is impacting #2, #3, and #4, and it’s not going to resolve soon. Both Nikon pro gear plants (bodies and lenses) fall into this category, unfortunately.

          On the positive side, based upon what I’ve heard so far, I’m sure that Nikon is scrambling to come up with alternatives.

          • according to some

            They could put up some wind turbines and solar pannels to fix this problem.

          • PHB

            Yes Thom, given the way Japanese culture works it is rather likely that Nikon is thinking about things other than making cameras and lenses at the moment.

            The short term prospects for improving the power situation are pretty dire. The only way that the situation could be improved in months would be through conservation. It takes time to put up any sort of electricity generation system, even a wind farm.

            Problem is that Japan already has the lowest per capita energy use in the industrial world.

            Wind power is probably their best bet. Though I suspect its not just going to be about replacing the lost capacity. I can’t see the nuclear industry being allowed to continue to operate.

          • Richard

            Thom,

            The simple, if harsh, reality is that the Japanese will not be able to quickly replace the electric generation capacity of the affected plants (which are not expected to ever be usable again). Rationing will be the ‘rule of the day’ for quite some time. As you point out, the Japanese lack an integrated energy grid which will complicate the matter.

            It will take a very long time for the areas impacted by the tsunami to return anything remotely resembling “normal”. I would expect it to be somewhat shorter than New Orleans after Katrina in certain respects and longer in others which probably will be determinant of the overall recovery.

            Once relocation is achieved I suspect that Nikon will be reluctant to reverse the situation even though the machine operations can be done virtually anywhere. If, for example, one looks at Apple’s production. There are normally multiple sources for components and assembly contracts are occasionally changed apparently based on cost. In fairness Apple’s devices do not require the degree of precision of camera gear and it is understandable that Nikon and others tend to have very long term relationships both as a cultural matter and a reluctance to risk problems that inevitably seem to pop up when changing contractors.

            This may well be Nikon’s “crossing of the Rubicon” as to their management style. Sitting idle is not a viable option.

            • http://www.bythom.com Thom Hogan

              There are ways around the power issue. Staggered production schedules, for instance (yes, I know some plants need 24/7 power, and that would have to be dealt with, but you can ASSEMBLE bodies any time of the day, ditto with many of the other plants).

              The disturbing thing is that we’re now over a week into this and the Japanese government is still not moving very fast in addressing immediate needs, like food, shelter, gas, heat, etc. Even the US got off its but eventually with Katrina, but things seem to be moving more slowly in Japan at the highest level, which is not good news. I see nothing anywhere that indicates this is changing, either. THAT will be the big issue, and soon. Without clear government leadership, the businesses are on their own to figure out how to deal with their own problems. The ones that can will bolt from the area, and fast.

              I’d bet the opposite of you: this is going to take longer than Katrina to resolve in most respects. The road, rail, seaport, and power situations all require government leadership, and would require prioritized government efforts. Remember, the SF versus the LA quake and how long it took to rebuild 280 in SF versus the damaged freeways in LA? Well, it’s that problem to several orders of magnitude. Japan is on the SF-speed track, not the LA-speed track, and they need to be on the LA-speed track: clear goal, incentives to finish early.

    • D700guy

      That’s exactly what I thought when I first read this.
      It’s unquestionable as to whether Nikon will keep its pace with products.
      Why would a major corp who just had a phenomenal 4th quarter sit on its hands?
      They wouldn’t, but as far as those who went to work every day at Sendai so that they could support their families…what of them? Their homes, their families, their livelihoods, all gone, and now their jobs. That’s a tragedy.

      • Vandyu

        When corporations merge, many offer employees the opportunity to relocate in order to maintain their employment. Or, some offer compensation packages. So, Nikon has options for caring for its employees, and I would expect them to implement some type of package. Since so many employees have lost not only their jobs, but their homes and neighborhoods, they may opt for major relocation. Whether they would want to move to another country altogether is another issue. When there is nothing to return to, it is often better to start fresh.

  • DanD

    I have no doubt Japan will rebound fast. Much faster than anyone think they’re capable of. Look at WWII, if they can rebound from almost “stone-age” to world’s no.2 in less than 20 years, than this can be considered “mild” obstacle.
    A phoenix will always stays a phoenix, a chicken will always stays chicken.

    • ZoetMB

      There are tremendous differences between now and the end of WWII:
      - much higher population (126 million) as compared with then (71 million)
      - Japanese population is very elderly (23% over 65) and increasing, as the baby boomers age and as Japan has a negative replacement rate.
      - Far more urban areas (67%) in Japan now
      - Japan was largely rebuilt with U.S. aid, which won’t happen now.

      I wish Japan the best and sincerely hope they do demonstrate to the world how to rebuild after a tragedy, but the unfortunate reality is that it will probably take decades (it’s taken ten years for the U.S. to start the frame for the new World Trade Center) and if there’s a full meltdown, there will be areas of Japan that will be uninhabitable. Japan already has 3.5 times the population of California in the same area. It’s almost unfathomable what Japan has to go through: how do you find housing for 100,000 people?

  • Simon

    Malaysians don’t have the same work ethics as Chinese workers so the quality will suffer if operation is moved there.
    A lot of talks is about Japanese wokers getting back to business and produce quality goods again but the real driving force in the country’s economy is Chinese migrant workers almost a million were are lot of core production work and low pay is done. Last I heard many Chinese workers have left or leaving Japan and that present a problem if companies no longer able to hold on to its skilled workforce who will most likely settle into other jobs back home.
    It has also materialise that the Japanese, despite its great wealth, has trouble even organising basic health care and looking after quake survivors many are starving because of poor planning, the government too are weak and dysfunctional even the emperor appears a pathetic relic of a bygone time. It is clear that without migrant workers proping up the country’s infrastructure Japan would not have able to fed itself.

    • http://www.russbarnes.co.uk RussB

      There is a mass of weeping statements in there, many of them entirely unfair and pure speculation in my view.

      • Gerry

        I am more surprised you were able to understand anything from a comment that just seemed to be random jibberish. :)

        • Global

          Youre wrong. The writers statements were quite clear and not very speculative. They are relying on first-hand reports, documented in the American media as well.

          One point of disagreement — I believe the labor force will return when invited back. The reason they are returning home is because its unsafe and unproductive at the moment. A foreign worker can earn money in China right now. But Nikon invests a lot of money in labor and will reacquire their workers.

          • Mike

            Right. Because the American media reports things accurately and without drama or exaggeration. I wrote on dpreview how in 2003 American media thought the plague 2.0 had hit Toronto with the SARS epidemic. Less than 20 people died in a city of 2.5 million. Since then I take what U.S. media reports and dilute the information by half, at least.

          • Soap

            I think the blatant racism was the challenged point, not the observations on migration patterns.

    • Panfruit

      How’s the weather in Taipei?

      • Rob

        This. Obviously he’s Chinese. I recognize the ethnocentrism.

  • gho57

    Come on Japan and Nikon, you guys will surely rebound up and running again. The country of Rising Sun will surely rise.

    As for shifting its product plan, it is not a problem as long the QC are doing their best. We can’t simply compare the assembly of a car to a camera. When you use cheap and lower quality than the originals than what do you expect? Most of the car being assemble here are using different materials than those being assembled in Japan, so?

    But, I do really hope they will assemble it here ( Malaysia ), as we don’t have huge natural disaster like earthquake or hurricane.

    Rite now, hope they decide whats the best for them and for the whole of Japan, we will continue to support them as ussual.

    Cheers

  • longzoom

    I don’t think Nikon will use a lower QC in any other country than home. If they relocate we will wait as long as needed – any other choice? Nobody will run unsafe place, so we could wait extra 16-18 months. Good luck, Nikon and Japan!

  • broxibear

    The Bloomberg article says “Nikon Corp. (7731) (7731 JT): Notion VTEC Bhd., a Malaysian metal processor and tools maker, is discussing with Nikon on the possibility of relocating the Japanese company’s machining works from its Sendai plant to the Southeast Asian country, OSK Research Sdn. said in a report. Nikon sank 2.5 percent to 1,551 yen. ”
    It only talks about machining works not assembly, maybe some parts will be made in Malaysia but assembled elsewhere.

    • http://davidandstella.wordpress.com/ David

      The company is Malaysian, but I think the factory(ies) are in Thailand.

  • http://www.flickr.com/photos/ilovewalkman/ Abhinav

    well they have to find one place to start the production soon or else it will causes lots and lots of losses .

    I hope whatever they decide is good for the company.

  • nuser

    http://www.futurespros.com/news/futures-news/factbox-japan-quake-impact-on-auto-makers,-electronics-firms-1000009053

    * Nikon Corp said four of its production facilities were closed, including two of its precision-equipment plants, but the effect on cameras and lenses is seen as minor, since most output for those devices is in Thailand. Nikon does not have a timetable to re-open the plants.

  • nuser

    official info from nikon:
    http://www.nikon.com/about/news/2011/0314_01.2-1. Damage to equipment and buildings
    Our group companies, including Sendai Nikon Corporation, Natori, Miyagi Pref., Miyagi Nikon Precision Co., Ltd., Zao-machi, Katta-gun, Miyagi Pref., Tochigi Nikon Corporation, Otawara, Tochigi Pref., Tochigi Nikon Precision Co., Ltd., Otawara, Tochigi Pref., and other subsidiaries as well as our Plants suffered damage to some part of the equipment and buildings. We are suspending operations there and continuing to evaluate further details of the damage. We are unable to announce how soon the operation will resume due to the regional interruption of life-lines although endeavor for restoration are under the way by some of our maintenance personnel.

    * For the list of our group companies
    * For the list of our plants

    2-2. Damage to personnel
    Injury is reported to some of our group employees. We are currently continuing to gather safety information of our personnel and its family members. htm

  • Dweeb

    I expected this would provide the push Nikon JP needed to do more off-shore outsourcing. Besides the camera gear is just consumer market stuff, not their valuable industrial equipment divisions.

  • Torben

    My Nikon support is on hold until I know where the D4 will be made, there is no way I’m going to pay $7000+ for a pro camera that are made in Malaysia.

    • Adrian

      If you knew anything about how tightly-run things can be with direct Japanese management, you wouldn’t bandy about broad generalizations like that.

      I’d buy a D4 made in Malaysia any day of the week. Hell, it might be cheaper.

    • Eric Pepin

      yes because the nationality of the person pushing the buttons on the machine really matters? Quality control is quality control, as long as the same people or caliber of people are doing the final tests and inspections and making sure the machines are calibrated properly there will be no difference. My Macbook pro, which costs as much as a D700 was made in China, i have 0 problems with that.

  • http://tumbleweed-092.livejournal.com/ Slow Gin

    Mine 105 VR is from China. Honestly, the quality might be better. Outer barrel is flowing not so smooth as it might be.

  • ianz28

    When I think of quality manufacturing and high end precision I think of 3 countries. Switzerland, Germany, and Japan. The U.S. is quite variable in quality characteristics of precision goods and doesn’t make my list.

    While companies implement and train their employees in other countries to meet quality control there simply is not a way to truly quantify the character of employee driven quality within these 3 countries.

    Of course it makes sense that Nikon will have to relocate manufacturing of Sendai to another facility (hopefully a temporary change). Unfortunately, there will be an impact on quality which IMHO cannot be overcome.

    I have no problem with buying consumer zooms and lower end camera bodies from Thailand, Malaysia, and China. However, I’m not ready to drop top dollar on a BMW M3 (D4) that was built in one of these countries.

    I realize this may sound prejudiced but my personal experiences with these goods drives me to these conclusions (wish it was an M3 getting me there) .

    • broxibear

      Just because they don’t make them at the Sendai doesn’t automatically mean they’ll be made abroad…they have other plants in Japan.
      I seriously doubt Nikon would risk the quality of their flagship cameras by manufacturing them in a plant that wasn’t up to the same standard as the Sendai factory.

      • ja

        i would imagine that all nikon factories have the same HQ and QC standards no matter what country they are based in , why have different levels

    • Rob

      You’ve never owned a modern Volkswagen, have you?

      • JorPet

        I have been for the last 11 years. The engine, made in Germany, is flawless at 170K miles. The body, built in Mexico, has been falling apart piece by piece almost from day one. Now granted, a lot of the things that have broken were spec’d by VW and the Mexican workers are only assembling pieces as good as they were given, but still interesting.

        I too think of Japan as one of the highest quality design/build countries in the world. Part of it is purely their culture that influences that. You don’t see that same culture anywhere else in the world and a lot of what they are able to do is culturally based, so moving a plant anywhere else in the world, without moving the workers will result in different outcomes.

        • Mock Kenwell

          Yeah. And once upon a time, “Made In Japan” used to be a harbinger that the product in your hands was a pile of crap. So let’s not play-down technology and experience as key components of good workmanship. I’m not saying culture doesn’t come into it, because it does, but it’s just one part of the equation. Every country has to start their manufacturing reputation somewhere.

    • R

      Uh…aren’t germans allowed to drink at work?

    • scurvyhesh

      American workers make great products homie. We were making the best airplanes in the world before we started outsourcing part of our production of the 787 to japan and Korea. Is it a fault of these Asian workers? No, the problem is management. Luckily Nikon seems to have a strong management structure and the quality of their product hasn’t suffered greatly when outsourced (pats D90 and 50mm 1.8)

    • Eric Pepin

      you know whats funny, every time I see people clamoring for Leica gear its always “was it made in Canada or Germany” as if the equally paid ,fed, educated people in a different first world country produce a worst product. As long as there is someone competent in charge, quality is quality.

      The 105vr is made in china, how many of you have had that lens break ? the 50 1.8 same thing, also how many have broken ?

  • heartyfisher
    • Dweeb

      But it also says: “but the effect on cameras and lenses is seen as minor, since almost all output for those devices is done in Thailand.” ;-)

      No one’s open until the rolling power outages are stopped.

      • http://www.flickr.com/photos/shigzeo/ shigzeo

        Of course, those are the non-professional cameras (aside from D300) and lenses, which are made in Thailand or China. All the pro bodies (aside from D300) and lenses are made in Japan, in one of the 4 shuttered factories.

  • Discontinued

    I think a lot of what is heard (read actually) in the ongoing quality discussion here is based on myths.

  • Earle

    If Nikon relocates production to Malaysa, I’d expect the same quality as the Sendai produced gear. It’s been my observation over the years (highly anecdotal) that the decision to produce a component offshore has more to do with assembly costs and margins. For example, I shudder to think what a D3100 or kit lens would cost if it was produced in Japan vs. China.

    Nikon is, after all, Nikon and moving offshore is a way to lower production costs (and keep a healthy profit margin) without lowering standards.

  • Bullsnot

    I suspect that moving “machining operations” to Malaysia and firing up the assembly soewhere else (Japan, or elsewhere) of the FF cameras would allow Nikon to retool anything necessary at Sendai for the next gen D800 and D4 more quickly and effectively than doing it while still producing the current models.

    In a nutshell, a delay in producing the remaining required stock of current models is inevitable, but it could actually speed the introduction of the next models.

    I don’t know enough about the camera assembly process to bee TOO confident in speculation, but I assume the assembly process is not one of great complexity. Manufacturing the components and sub-assemblies is another issue entirely, and just how much of that took place at Sendai will determine how quickly and smoothly this move will be able to happen.

    A move to another facility, however temporary (or semi-permanent) is likely a requirement for Nikon as Thom suggested, since nobody knows the long-term implications of the current and future nuclear crisis. Rolling the dice on the outcome of that mess is not something Nikon can afford to do with two or more product launches scheduled for the near future that are of such high importance.

  • Just A Thought

    Now is the time for the Japanese to band together to help each other and rebuild.

    It is “not” the time to pull up stakes and run away.

    I would never buy any Nikon product which would be made in whole or in part, by moving Sendai production to Malyasia. I have shot Canon and Nikon for years so I’m not phobic about buying something which does not have the Nikon label.

    Hey Nikon why not support Japan during this dire time. If you want to move Sendai, then why not move further south within Japan (along with the employees who helped make Nikon what it is today)?????

    • Soap

      Secure your own mask before helping others.

      • Just A Thought

        “Secure your own mask before helping others.”

        Not quite the same as running away to a foreign land and then returning to help others (who knows when – months maybe years later).

        Oil refineries were damaged so there is a fuel shortage. Use the precious fuel to provide food and help and medical assistance to those in dire need, instead of using it to move your factory in whole or in part.

        • Some Thoughts

          I am sure that Nikon is thinking of its employees and its nation.

          Nikon probably has 2 choices: shift some production outside of Japan and continue to have revenue flow in for those product lines, which can then be used in part to pay Japanese workers as well as rebuild and retool…
          Or have nothing coming in on these product lines, which benefits no one.

          It is of the best interests to all Japanese companies to keep cranking out products no matter where, to keep the money flowing in. Declining profits, poverty, bankruptcy, etc…benefits no one.

          • Just A Thought

            I assume that Nikon has many choices.

            From their news reports, it seems that the Sendai plants were not damaged to any great extent. Damaged roads, shortage of fuel and damaged ship yards kinda get in the way of moving heavy industrial equipment.

            One would also assume that Nikon would have warehouses adjacent to production lines which would hold enough parts for a month or two or more of production. A camera is far smaller than a car, household appliance or even a desktop computer.

            So the Sendai facilities are intact and more or less were not damaged (per their news). The highly skilled employee pool is intact (thankfully).

            Once the Nuclear reactors are cooled there is still one undamaged (as per news) reactor which could supply power – limited but better than nothing.

            Once the nearby shipping port is repaired then a US Aircraft carrier could be parked dockside and power taken from it’s nuclear reactors. If the port can accept ocean going container ship, I assume it is deep enough for an Aircraft Carrier. In the meantime power lines would be brought in from different regions. Sure it will take months. But then moving a factory in whole or in part, to a foreign land, would likely not be done in less time.

            As for future proofing, move the factory to another part of Japan in a couple of years. But then why bother, as their plants survived this time around. For next time the infrastructure will be better prepared. It’s not like such huge earthquakes happen on an annual basis. Probably not see another for decades – hopefully even longer.

            • Soap

              1 – Size of components is not strongly correlated to the warehousing cost. Nobody keeps months of supplies near by. That assumption is poor.

              2 – Nimitz class carriers (the big ones) have around 200 MW of generating capacity, period. The Fukushima Daiichi plant had 4×784, 1×460, and 1×1100 MW generators. The carrier would only be able to provide 4% of the power of the plant.

            • PHB

              Indeed, if hooking the carrier up to the Japanese grid was an option they would have used it to power the pumps at the nuclear plant.

              The problem is not just one of generation, it is distribution. And the distribution is designed to go from the plant to the city, not from the docks.

              On top of that, the frequency may well be wrong.

  • chuck

    Sadness about how bad things are going for this great country.

    You notice that in this terrible time no one has looted, rioted or complained or criticized. Only criticism is from all the armchair people sitting in houses with food, heat, water etc.

    Than the sorry a$$ people worried about their next camera or the price of a lens.

    FWIW a D800, D4 or lens made somewhere else would be buy people that would riot and loot, nuf said!

    • Torben

      You talk gibberish, nuf said!

      I buy D4 and pro lenses, for your information; I don’t RIOT, I don’t LOOT, but I do complain if my Pro equipment will be made in China or other countries I don’t like.

      • chuck

        WTF a peeper and measurbator who thinks thou a a pro LOL

    • mshi

      Yes, it might be called a *great country* but they won’t even tell you what has been going on in reality. Listen to this guy’s begging in Tokyo.

      http://www.youtube.com/watch?v=vGY5TlekcZs

      • http://www.flickr.com/photos/ilovewalkman Abhinav

        thats guy isn’t watching news channel .

  • RUH

    Is this the same VTEK that makes all the crappy electronics you see in wal-mart? if so, then that sucks…

    • PHB

      VTec also make much of the equipment sold under the Sony and Panasonic brands.

      There are a big combine like LG which is primarily a contract manufacturer but sells some commodity gear under its own brand.

      The Vtec phone I bought has performed a lot better than the AT&T or Siemens systems that preceded it. Both of which turned out to be poorly made with defective components. Which was particularly bad for the Siemens system which cost me about $1000.

      Moving D800 production to Thailand is a no-brainer. The D700 and D300 will be virtually identical as far as assembly is concerned. A different mirror, a different sensor and a slightly different case.

      We might well see some change in schedules though. The launch of the D4 is going to be about Nikon’s recovery from the disaster so I don’t expect it to be made outside Japan.

      We might well see some unplanned changes in specs on other models first.

  • mshi

    This is a pure PR bullshit. It seems they can make all their parts and also parts, such as sensors made by Sony, among many suppliers at a moment’s notice in another country. Expect higher prices due to NO supplies going forward instead.

  • Merv

    It is looking much worse now in Japan:

    http://www.dailymail.co.uk/news/article-1367125/Japan-tsunami-Fukushima-Fifty-suicide-mission-battle-nuclear-meltdown.html

    I am sure there are more immediate problems to deal with than the restart of any manufacturing capabilities there

    • mshi

      TEPCO Director Weeps After Disclosing Truth About Fukushima Disaster

      http://www.zerohedge.com/sites/default/files/images/user5/imageroot/von%20havenstein/Crying%20TEPCO.jpg

      Phuckers started to shed tears in public for what? They should have told the truth from the day one. So much for the glorified shitty Japanese culture.

      • Just A Thought

        “Phuckers started to shed tears in public for what? They should have told the truth from the day one. So much for the glorified shitty Japanese culture.”

        And one would have gotten the truth in which country, had a similar situation occurred?

        Put yourself in that Director’s place. Would you have had the testicular fortitude to speak the truth as it happened?

        Humans dislike hanging dirty laundry in public.

        • mshi

          Their glorified culture just conveniently forgets that “honesty is the best policy.”

          • Just A Thought

            “Their glorified culture just conveniently forgets that “honesty is the best policy.”

            That’s a convenient fairy tale sold to naive children. The real world does not work that way – never has. It also has nothing to do with Japanese Culture.

            • mshi

              S0 everyone in the world lies, steals and cheats? Or just stupid Japanese gubbermint?

            • Just A Thought

              reply to mshi
              “S0 everyone in the world lies, steals and cheats?”

              So you really did not know that??????

              Name one country which does not have jails????

              Here’s an example for ya:
              The USA has the largest economy in the world. It also has the largest prison population in the world – overflowing.

              Again, it has nothing to do with Japan nor with Japanese Culture.

            • Rob

              “Everybody lies, cheats, and steals” is an ignorant assumption made by liars, cheaters, and thieves. Some people have integrity.

            • Just A Thought

              reply to Rob
              ““Everybody lies, cheats, and steals” is an ignorant assumption made by liars, cheaters, and thieves. Some people have integrity.”

              Especially those who self profess integrity.

              Jim and Tammy Faye Baker (of the now defunct PTL Club – send us your money to help us do God’s work) come to mind.

              Your assumption also fits me to a T. Do we know each other????

              Again this has absolutely nothing to do with Japan or Japanese Culture.

            • Rob

              Unlikely. I never do any of the three. Based on your surprise in that, you probably do all 3 quite frequently. Sad.

            • Just A Thought

              reply to Rob:
              “Unlikely. I never do any of the three. Based on your surprise in that, you probably do all 3 quite frequently. Sad.”

              Based on the above reply the level of your integrity really shines. Interesting how it does not stop you from insulting a total stranger.

              I agree that it is rather sad and also has absolutely nothing to do with Japan or Japanese Culture, which if you had bothered to read the thread is what I had originally replied to “mshi” about.

        • scurvyhesh

          just a question “just a thought” where are you from?

          • Just A Thought

            Lately on Earth, but I was originally part of the initial exploratory group from planet Zeeba. Normally I could not reveal this, so I’ll leave to you to do a Google search on Dr Phil and planet Zeeba.

            Why do you ask?

  • Some Thoughts

    One, we know that the Japanese are amazingly resilient people and will rebuild quicker than most people will expect.

    Two, we also know that even with that in mind, it will take time. As Thom points out as well, there will be the potential for lingering radioactive contamination in the areas nearest the reactors to cope with as well.

    Three, any Japanese business like Nikon is only being wise and prudent to shift as much of their capacity to facilities outside of Japan, at least for the short to medium term. Nikon needs to continue to sell its products, as well as reassure investors.

  • Just A Thought

    Instead of running away to foreign lands and trying to ingrain Japanese work ethic upon foreign cultures, maybe the assort firms in the area should meet with GE or other power plant manufacturers. I’m surprised that they are all seemingly totally reliant on the publicly funded source (nuclear reactors in this case) of electricity.

    An airplane factory where I had worked years ago had it’s own power generation capacity (gas). An auto factory which I had visited also had it’s own power generation. This is in a city with multiple nuclear plants and located in an area not prone to earthquakes nor flooding etc. Just makes sense to have a second source for something that can stop production in it’s tracks if you run out of it.

    Sure Japan does not have it’s own Natural gas production (relatively tiny amt if my memory serves me). But, the Middle East is awash with Liquified Natural Gas capacity since the US started fracking for gas and getting amazing amounts of gas. Sendai has a sea port nearby. If the companies got together and paid for a Liquified Natural Gas Terminal at the sea port, they could import enough LNG to meet their power needs and possibly even sell extra electricity to the Japanese grid.

    I assume that along with natural gas (and coal), one can buy oil fired electrical generation plants – big enough to power the one plant and maintain production. Then build an large oil storage container to hold enough oil for say one month of electricity production. Coal fired could be safest, followed by LNG.

    In a region prone to earthquakes, I’m kinda surprised that all these companies seem not to have any backup plan for sourcing electricity.

    But then I’m just playing the arm chair quarterback while watching the horrific game unfold.

    • Some Thoughts

      Just A Thought: you have some creative ideas….but as you mention, it’s difficult to judge the practicality of those ideas.

      Even if what you suggested were to take place, that would take a lot longer than sourcing some production outside of Japan for Nikon and other companies. Nikon, et al, cannot afford to wait to create new products to sell while an elaborate plan for power generation is enacted.

      But I respectfully disagree with your assumption that other cultures cannot match the work ethic of the Japanese. I do agree the Japanese have a great work ethic and give them credit for that, but I do not believe this attribute is limited to this particular country or culture. I know there have been studies, for instance, that show that car manufacturing facilities in America owned and operated by Japanese companies (like Toyota, Honda, etc) match the quality of output of those in Japan. It appears the difference is in the management and overall company culture.

      People of all countries, ethnicity, etc can be productive at the highest level in their work.

      • Mock Kenwell

        This is a terrible tragedy, no doubt. There but for the grace of God. But this kind of unfounded romanticism of a culture undergoing crisis is typical and not entirely grounded in reality or the facts. It’s been all I can do to prevent myself from responding to many of these flawed, rose-colored posts.

      • Just A Thought

        “People of all countries, ethnicity, etc can be productive at the highest level in their work.”

        Could be.

        But then why is it that the Japanese are the only ones who have a developed international reputation for doing so?

        Why is there such a narrow playing field? Where are the other reputations which are accepted worldwide?

        South Korea, IMHO is the only other country well on it’s way to developing a similar reputation worldwide.

        Today is recovery day for me so I got to spend a whole bunch time spreading my creative ideas. BTW thanks for calling them that – you should hear what they are normally referred to as.

        Just A Thought is a registered trademark of Just A Thought.

        • http://www.flickr.com/photos/shigzeo/ shigzeo

          I live in South Korea, and let me tell you, quality on just about everything, sucks. Korean companies cut so many corners, that sidewalks built half a year ago, are falling apart from sink holes and after a little rain, wash down the road.

          Here, they replace parts in Samsung and Hyundai cars with plastic so they can sell the same car with better parts abroad, more cheaply. Korea is far and away from attaining the level of quality I’d expect from Japan, USA, Germany, and in many cases, even China.

          Korean companies are famous for just buying up good companies from abroad and acquiring their technology. I work in the tech industry here in Korea. It is awash with the filthiest of corner cutting. Korea’s shiny image abroad is complete rubbish.

          The only product they make that are semi good are their MP3 players and furniture. Everything in our flat (and the flat itself that is just two years old) is falling apart piece by piece.

          • Just A Thought

            If one goes back a few decades one finds something similar had occurred in Japan. Back then Japanese products were not know for their quality. But as they took over technology and developed it, their reputation changed. I believe that South Korea is on a similar path. Vietnam is another country which seems to have found the same path but that may change.

            South Korea’s biggest problem IMHO is North Korea and it’s backer China. China IMHO does not want South Korea to become another Japan – who needs the competition who allows US troops to be stationed not that far from China’s borders/

            Taiwan was another example of what can be achieved when a country and it’s industries plan for the future and not just try and rake in as much cash in the present as possible. Their problem is also China.

            The USA created the Microwave oven. It dominated that market. That is until the South Koreans bought up the companies owning the techning and moved everything to South Korea. Given time they have improved on the technology and now South Korea is “the” major producer of microwave ovens. The US was taken out of that market totally. That is the key different in management style. In the US they care about getting the biggest year end bonus. They don’t seem to plan much beyond that. The same thing is happening with other home appliances – no longer produced in USA. The list goes on including outsourcing aircraft manufacturing and the lastest networking equipment.

            That is why I also feel that it is foolish for the Japanese to follow the US way of outsourcing production out of the home country. Great for bonus increases short term as costs are driven down. But like with US experience with microwave ovens, there is nothing left for the future.

            • Mock Kenwell

              Hello? How about Germany? It had a reputation for quality, precision and innovation well before WWII, it perfected most notions of the modern camera, automobile, jet engine, etc. And it did it well before the Japanese, who effectively began copying all of their goods. Likewise the American transistor radio and television. All these countries were known for their work ethic and quality. To make such a broad statement about one country is not only ignorant, it’s just plain incorrect.

            • http://www.flickr.com/photos/shigzeo/ shigzeo

              Indeed, there are MANY MANY countries that come far ahead of S. Korea in terms of quality. Not quite sure how S. Korea even came up in this conversation after Japan as a country producing quality goods.

              Its wooden chairs are good. Anything else, I will skip.

              Germany is in many ways a Japan on uppers. You lose some of the passion, but gain machined mentality for precision. Neither is better overall, but both are of very good quality. One, of course, is more expensive.

              Again, S.K. is hardly in the running. Come here and see for yourself. Koreans make illusion. They shake hands in nice suits and it seems like ‘ohhh, another Japan – in a few years’. The difference is that Japanese are concerned with quality from start to finish.

              Koreans are concerned with quality from start: advertising, and to finish: purchasing and product placement, but nothing in between.

              You have virtually no quality control outside the company, nothing but copy machines doing the research. Comparing Japan and Korea is like comparing … what?

              Comparing Japan and Korea is like comparing grass with artificial turf. The artificial turf is more expensive to install and always looks green, but when you fall, it hurts because it requires no managing, has fewer qualms about quality, and is all fake.

              Samsung, LG, Hyndai and their small fragments that litter this country are not in the least concerned about anything but the suit and the sale.

              People here don’t go to classes to learn how to perfectly hammer a piece of metal into an nice bowl in order to become automobile engineers like they do in Japan. They just observe the copy cat cars, the broken roads, the rusty busses and think, I might be able to do better, but oh well.

              That is the problem with the corporate entity here. It simply has not fostered and won’t foster quality. It will only foster its illusion.

    • Julian Phillips

      Just a thought – all of the alternative energy sources you mention that theoretically could supply the manufacturing plants. One thing thats interesting about the nuclear plant failure – is that it failed essentially because they lost the ability to use their backup diesel power generators for cooling the nuclear reaction. So it would appear that the alternative forms of power generation are also quite vulnerable to earthquakes and tsunamis. Natural gas is certainly not recommended in an active earthquake zone – you get a small crack in a gas pipe – and you have a big problem.

      • Just A Thought

        “is that it failed essentially because they lost the ability to use their backup diesel power generators for cooling the nuclear reaction.”

        Didn’t they run out of diesel fuel which stopped the backup generators?

        “Natural gas is certainly not recommended in an active earthquake zone”

        Liquified Natural Gas is quite safe so storage and transport is safe. There are safety shutoff equipment which enhance safety. I did mention that coal fired generators would be safest.

        Nuclear produces about 30% of Japan’s electricity (approx – going by memory). The rest is produced by low sulfur oil and gas fired generators. So they have the technology available to make such generation safe in such an earthquake prone environment.

        My main point was the seeming total lack of consideration of a secondary backup source (beyond the publicly funded nuclear plant) of electricity in an area with so many production facilities. But then hindsight is 20/20 vision.

    • http://www.bythom.com Thom Hogan

      Sendai’s seaport is wiped out.
      Nuclear was chosen because Japan didn’t want to be 100% dependent on imported energy.
      You don’t want an LNG facility in a high earthquake/tsunami zone if you can avoid it.
      Energy isn’t the only problem these plants are dealing with. It may not be the biggest problem.

      However, underlying your thoughts is a bigger thought and one that I’ve already written something on that I’ll post later on my site: in all of these major disasters lately, businesses are acting faster than government. Higher up I posted that Nikon is proactively dealing with their issues. I don’t know what the eventual outcome will be, but the easy guess is more offshore parts supply and assembly moved somewhere else in Japan.

      There are bigger issues lingering underneath the surface, though. If you didn’t read today’s article in the NYT about supply chain, you should. The real problem I see is that some of the chemicals and raw materials from which you make parts originate in this area. For instance, I think that 15%+ of the semiconductor wafer business just got lost, as one of the low-level suppliers has a plant that was highly damaged and will be offline for a long, long time. I’d say it’s likely that this hole will be filled by some other company, and because of the uncertainty in Japan, I’ll bet that it’s offshore somewhere.

      That’s a really tough issue deep down. Just as wages eroded American manufacturing, moving raw materials and parts streams out of country would erode Japanese manufacturing. One of the most interesting financial analysis I ever did was for the initial Quickcam. Since we were trying to drive the price to US$89 I tried to figure out all the variables, and one was transportation of components and parts. Turns out that transportation was a meaningful cost buried in component costs. In particular, we were sourcing lenses in a metal mount of SE Asia, and since that module was the heaviest in the camera by far, it had a buried transportation component we needed to consider. If enough of that buried cost could be recovered by manufacturing more locally to the sources, you put your plants nearby. (FWIW, we made the decision to manufacturer and assemble in the US; when Logitech bought the business, they took it offshore.)

      So, we’ve got semiconductor equipment, semiconductor supplies (wafers), and semiconductor fabs in relative proximity to one another. If one or more of those move, the others tend to, as well. This is the more worrisome thing about the quake/tsunami/reactor crisis in terms of business to me: you’re going to have individual businesses making quick and probably permanent decisions very soon, and a lot of that probably will involve moving out of the area. So then the question is, move to another part of Japan or out of Japan? That brings the bean counters to the fore, and they will analyze everything and probably conclude it’s time to move more offshore.

  • http://ronscubadiver.wordpress.com Ron Scubadiver

    Obviously, this was in the works before tsunami.

    • Just A Thought

      Ya think ?

      I’ll have to keep an eye your posts in the future.

  • Nicholas Lee

    I’m from Malaysia :)

  • http://davidandstella.wordpress.com/ David

    Looks like the mounts will be made in Malaysia, lens cam and assembly in Thailand. Corporate announcement by Notion VTEC:-
    http://www.bursamalaysia.com/website/bm/listed_companies/company_announcements/announcements/index.jsp

    • http://nikonrumors.com/ [NR] admin

      thanks David, this press release is also on their website

  • Jaye

    I wouldn’t complain. It’s either we get new cameras or no cameras at all! Bring on Malaysian Nikon gear!

  • M

    VTEC just kicked in, yo!

    I’m going to hell.

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