Slices of Japanese business, politics and life
The next boss of beleagured Japan Airlines is a 77-year-old ordained zen monk who founded multi-billion dollar tech and telecoms companies, and – unlike most Japanese corporate peers – actually backed the current ruling party.
Kazuo Inamori, honorary chairman of electronics parts maker Kyocera and critic of many modern CEOs as well as capitalism’s excesses (think an older Michael Moore at Kyoto’s Ginkakuji), says he will take the job for no salary, working only three to four days a week.
Long hours and zen resolve may be needed, though, as JAL shares slipped to 7 yen in value Wednesday, making its market capitalisation at about $200 million less than a single Boeing 747-8 aircraft.
Analysts say Inamori, who has launched a leadership school as well as his own foundation, may be the new government’s attempt to win a public buy-in that a principled outsider and his “Kyocera philosophy” of “doing good and doing well” can succeed where a slew of JAL managers have failed.
“Another love so true
That once turned all my gray skies blue
But you disappeared
Now my eyes are filled with tears” K. Sakamoto
Japan Airlines appears set to enter the hangar of court protection with $16 billion in debt, equal to a one-way Tokyo-Sapporo ticket for every citizen. The move would not be the most momentous for Japan or for a global carrier in the age of deregulation, but it would be one of the most well-telegraphed.
The bulk of Sumitomo Mitsui Financial Group’s up to $9.7 billion share issue will go to meet stricter capital requirements, but sources say the bank will use some money to hunt for more opportunities in Asia.
Asian expansion is increasingly important for Japanese lenders, saddled with low profit margins and few opportunities for growth at home. Sumitomo Mitsui already has stakes in Vietnam’s Eximbank, South Korea’s KB Financial and Hong Kong’s Bank of East Asia, and wants to benefit more from the region’s growing economies.
“Turbulent” wouldn’t properly describe the recent flight path of national flag carrier Japan Airlines, in a spiralling game of chicken with its retirees and unions over a $3.7 billion pension shortfall.
President Haruka Nishimatsu, who needs a pension deal to get bridge loans and bailout money from the state, is asking for an average 40 percent cut from retirees and current employees.
Not so long ago, once proud Japan Airlines had few friends besides the government, which threw it a $1.1 billion bone in the form of emergency support in June to keep the national flag carrier in the pink, if not the black, as Asia’s largest airline by revenues continued to bleed money — about $1 billion in the last quarter — and painfully restructure.
But in a weekend, JAL has suddenly become the belle of the Pacific ball, with both Delta and American Airlines possibly looking at minor stake acquisitions worth hundreds of millions of dollars, and public broadcaster NHK reporting that it is also eyeing a capital injection from Air France-KLM, all likely dictated by a state-supervised restructuring plan due by month’s that may carry another plea for government aid.
At Tokyo’s Haneda Airport today, I watched a bio-fuelled JAL aircraft find loft in a sign of 21st Century change.
But for executives of Japan’s flag carrier, Asia’s largest, the exercise was also a brief diversion from the terrestrial woes of the world financial crisis.