TOKYO, Sept. 12, 2019—In November 1989, T. Boone Pickens, the once-famous greenmail takeover specialist who died on Nov. 11, demanded a board seat of Koito Manufacturing Co., for holding the largest chunk of the Toyota Motor Corp. auto parts subsidiary’s shares. Pickens’ demand was rejected by Koito, not even a shred of the company’s financial information beyond what was disclosed minimally under Japanese law. Pickens reportedly invested $1 billion for a 26 percent Koito stock, more than a 19 percent share Toyota held at the time. At the end of the day, nothing happened and Pickens unloaded his entire Koito holdings, probably at a small loss, despite loud clamoring from Washington lawmakers.
Fast-forward to March 1999: Nissan Motor Co. , which was on the brink of bust, sold a controlling share to Renault, which ultimately was raised to 44.4 percent, and escaped failure. The Renault acquisition of Nissan later was expanded to involving the French automaker’s acquisition of Mitsubishi Motors Corp.’s controlling stake. Renault’s acquisitions went smooth as sailing in a quiet sea.
In both the Toyota group and Nissan group deals, the Japanese government had been in the works behind the scenes, a former government official told The Prospect Sept. 12, 2019. Koito needed to be protected from Pickens at all cost, so Toyota told Japanese Ministry of Economy, Trade and Industry bureaucrats, for the country’s economic stability and employment. Exposing Koito to mergers and acquisition high seas may ripple into other Toyota group companies as Pickens probably might have envisioned and could end up threatening the Toyota keiretsu (locked corporate relationship) and in turn cause instability to Japanese society.
In a contrasting setup, Nissan, a former Fuyo zaibatsu keiretsu company, desperately needed new money but it could not find any among domestic investors, as the likes of Mitsubishi and Mitsui were competing keiretsu groupings. There was ample money in Japan but nobody was interested in an investment that could disrupt the keiretsu landscape – even though it had been becoming fuzzy back then. So Nissan’s late president Yoshikazu Hanawa considered foreign investors and responded favorably to offers from Daimler-Chrysler, which already was managing Mitsubishi Motors under its arms, while sounding out Renault. Hanawa didn’t like Daimler-Chrysler’s ‘Deutsch colonialist management’ style so he settled on Renault, which he saw as a less militaristic and domineering alliance. Government bureaucrats listened to Hanawa and endorsed the deal, but they kept concerns about ‘national security’ because Nissan was formerly a national enterprise charged to leap-frog Japan as a developed country with silk spinning and weaving machinery, automobiles, military and space technology.
The next few months are expected to critical on how Nissan without CEO after the scheduled departure of Hiroto Saikawa Sept. 16, 2019 and the Japanese government would manage the company’s relationship with Renault, which had expressed intentions for a full acquisition of Nissan. Without Renault, Nissan is set to sink into another round of money shortage trap but accepting additional Renault investment would mean that one of few remaining competitive Japanese industries and technologies could drain out of the country.
–By Toshio Aritake