TOKYO -- It's no secret that Carlos Ghosn,

Nissan Motor's

(NSANY)

new chief operating officer, is not well-liked in Japan.

After announcing a drastic restructuring program that slashed thousands of jobs at the struggling automaker last year, Ghosn should be thankful the media only dub him as "le cost-killer," because he's called much worse by union leaders and certain Liberal Democratic Party officials.

And now the Brazilian-born chief could be adding another to his list of enemies: steelmakers. Ghosn is reportedly getting ready to cut in half the number of Nissan's steel suppliers, which spells trouble for major steelmakers such as

Nippon Steel

,

Kawasaki Steel

(KSKSY)

and

NKK

(NKKCY)

-- all of which once were heralded as the backbone of Japan Inc.

Although those steel producers are expected to announce stellar earnings for fiscal 1999 on Tuesday, the earnings party could be cut short if Nissan, as well as the other automakers that are now mostly controlled by foreigners, all cut suppliers this year.

The steel industry hasn't been a sexy sector for investors. The 1997 financial crisis put a dent in manufacturer's profits when the Asian Tigers were forced to freeze, or entirely abandon, scheduled steel projects. Shares of Kawasaki Steel have declined by 60% since July 1997, while

Sumitomo Metal Industries

dropped 81%.

As Asian economies recovered last year, however, so did steel output and exports. Japan's output of crude steel has risen for seven straight months on a year-to-year basis through January, thanks to an increase in demand from South Korea, Taiwan and Thailand, according to the

Japan Iron and Steel Federation

.

That's why analysts predict Kawasaki Steel's pretax profit will jump 110% in fiscal 2000, which starts April 1. Nippon Steel likely will announce a pretax profit of 100 billion yen for fiscal 1999, while Sumitomo Metal Industries is finally expected to move into the black after years of trouble.

Short-term investors may believe steel companies are a buy just by looking at share prices, which average around 124 yen ($1.15). That's nickels and dimes compared with the price of other traditional blue-chips such as

Sony

(SNE) - Get Report

, which goes for $28.70 per share.

In the long term, however, shares of steel companies should be avoided, says Kenichiro Yoshida, industry analyst at

Nikko Salomon Smith Barney

.

Yoshida is worried whether automakers such as

Mazda Motor

, which is 33.45% owned by

Ford

(F) - Get Report

, and

Isuzu Motor

(ISUZY)

, which

General Motors

(GM) - Get Report

holds a 49% stake in, also will continue to cut the number of suppliers.

"The pace of the much-needed industry recovery will slow down considerably if Nissan cuts their suppliers like they suggest," Yoshida, who is neutral on the industry as a whole, notes in his latest report. "Japanese steelmakers, which rely a lot on the domestic car manufacturers for sales, will lose money as the price of steel declines." Nikko Securities did underwriting for all of the major steelmakers before it joined hands with Salomon Smith Barney.

In addition, the U.S. is looking to impose punitive tariffs on steel imports this year. Large steelmakers from Japan, Brazil, South Korea and the European Union could be hit hard as the U.S. looks to protect domestic steelmakers, which filed an anti-dumping suit in July 1999.

As steelmakers are forced to cut costs when customers and profits decline, other auto suppliers, such as nonferrous metal refiners, also could get hurt. With share prices of steelmakers expected to hover around current low levels, the only thing on the rise looks to be Ghosn's list of enemies.

There are some economic reports due out in Japan in the coming week -- business conditions Tuesday, service sector sales Wednesday, private machinery orders Thursday. But who really cares about such boring fare, when the Sony

PlayStation2

is being released?

Sony expects to sell a million of its new video game consoles on Saturday -- its launch day -- and the thing likely will be rolling off the shelves all week at a fairly torrid pace. Heading into the weekend, there were reports of police trying to clear out the crowds that have camped out in Tokyo's Akihabara shopping district -- inarguably the largest consumer-electronics toy store in the world.

How the opening sales of the PlayStation2 will affect Sony's stock is unclear. Sony ADRs, which trade on the

New York Stock Exchange

, already have run 213% since the beginning of last year, largely on anticipation of the new game player's launch. But the frenzy building up over the PlayStation2, which not only plays games, but also has a DVD and CD player and offers Internet access, is unprecedented. For years now, people have wondered what would happen when today's new technologies migrated into the living room.

They don't have to wonder anymore. That day has come.