Shoei Reorganizes

SHOEI REORGANIZES

POOR ECONOMIC CONDItions, high overhead costs, including increases in labor and product liability costs, have driven Shoei, one of Japan’s largest helmet manufacturers, to a corporate and financial reorganization that will include factory consolidation, management restructuring and overhead-cost reductions.

The company’s insolvency was declared in Japanese newspapers May 12. Those papers reported that the company was driven into bankruptcy proceedings by a large stock of unsold product and a debt of about 16 billion yen, the equivalent of about $120 million. Those initial reports may have overstated the problem, but what does seem fairly certain is that an element of the company’s indebtedness involves the construction in 1989 of a new production facility, in which the company reportedly invested about $10 million.

The company’s difficulties arose despite its having about 40 percent of the helmet market in Japan, a country with a huge number of motorcycles and a mandatory helmet-use law.

A statement from the company’s American distributor says no changes are foreseen in the U.S.—Yasushi Ichikawa