Staff writerFinancial institutions are not the only Japanese companies suffering from the moribund economy.Major electronics firms and automakers, which once basked in the strong growth of the famed Japanese economic miracle, have revised their projected earnings downward for the first half of the current business year. Some even expect to fall into the red.An inevitable consequence of their poor performance seems to be massive restructuring, including sales of fixed assets and labor cuts. However, many Japanese business leaders are struggling to find ways to improve their companies without abandoning the lifetime employment system long cherished in Japan."We must prevent our company from being further downgraded by (private credit rating firms like) Moody's Investors Service Inc. Otherwise, we will be unable to procure necessary funds to operate our business," said Fumikazu Yokokawa, executive vice president of Mitsubishi Motors Corp.MMC expects to post net losses of 7 billion yen for the 1998 business year, and Moody's downgraded its long-term debt rating to Baa3 from Baa2 in August. "We will review everything in every section in our company to reduce costs," he said.Nissan Motor Co., which, along with Toyota Motor Corp., enjoyed huge growth during Japan's motorization in the postwar era, is now saddled with 2.5 trillion yen worth of interest-bearing loans. It's trying to slash that amount by 1 trillion yen by 2000 by reducing inventories and selling fixed assets.Nissan has already sold one of its head office buildings to the Mori Building group and sold its auto financing subsidiary in Australia to GE Capital Services Corp., and company officials hinted that more selloffs will be announced in the future.The nation's electronics giants -- including Hitachi Ltd., Toshiba Corp., NEC Corp., Oki Electric Industry Co. and Sharp Corp. -- also downwardly revised their earnings forecasts due to the one-two punch of dwindling demand in the home appliance market and plunging prices of dynamic random access memory chips.Hitachi and Mitsubishi Electric Corp. have decided to shut down some semiconductor production lines in the U.S., while Toshiba has said it will slash its workforce by 6,500 by the end of fiscal 2000. Hitachi will pare 4,000 employees in the current business year, the firm said.According to a report by The Nikko Research Center, companies' employment costs have been rising recently in tandem with the aging of their workers.Traditionally, companies covered increases in labor costs by raising the prices of their products, but the report notes that Japan's atrophying economy is squeezing commodity prices, making it impossible for manufacturers to continue taking this route.The private think tank estimates that Japanese companies will have to cut a total of 2.55 million jobs to secure profitability, and as a result, Japan's unemployment rate will soar to 7.9 percent.The latest jobless figure stood at a record 4.3 percent.Unlike Japan's steel industry, which implemented drastic restructuring steps in the past, companies in the electronics and auto industries still have room to cut expenses, and restructuring efforts are certain to have an impact in improving their financial conditions, analysts say.What is most important for the nation's manufacturers, according to Mami Indo, senior equity analyst at Daiwa Institute of Research Ltd., is to develop products with cutting-edge Japanese technology that will command high prices in the future. "Japanese companies can no longer expect huge growth in sales revenue, and cutting their workers will soon become ineffective in coping with drops in revenue," she said.Comparing the methods of restructuring used by Japanese firms and those by the U.S. and European corporations, an executive of a major automaker complained that Japan's traditional way of management is not duly appreciated by those rating agencies. "In Japan, layoffs are considered to cause serious damage because the company may lose its employees' motivation and loyalty, thus lowering their productivity," the executive said. "We cannot just focus on our performance on a short-term basis."Ten years ago, Americans and Europeans praised our style of management, but now they seem to have a totally opposite opinion. I don't know which style of management will prevail 10 years from now."