Japan: Just Like Old Times

The postwar U.S. breakup of Japan’s zaibatsu, the huge and powerful prewar cartels that controlled practically all of Japanese industry, was the most ambitious antitrust action in history. The reemergence of the zaibatsu has been hardly less ambitious. With scarcely a murmur to mark it, the steady reconcentration of the three biggest zaibatsu —Mitsui, Mitsubishi and Sumitomo—has been going on quietly but steadily since 1952. The three now account for more than one-third of Japan’s total industrial and commercial business—and they are not finished yet. Last week executives from three big prewar Mitsubishi heavy industry groups were at work on what promises to be the biggest postwar reunion of them all: the merger of the three into the old Mitsubishi Heavy Industry Co., which would rank as Japan’s second biggest firm and trail only another zaibatsu firm, Hitachi Ltd.

Alarming Independence. Japanese businessmen wonder whether the Mitsubishi merger plans will prove catching. Until recently, most non-zaibatsu Japanese firms were doing so well that they felt little need to merge. Even some of the old zaibatsu showed a surprising independence from the old arrangements, particularly since their need for cash became so great that it could no longer be filled only by the zaibatsu banks they once were tied to. But Japan’s new moves toward trade liberalization and its increasing need to export have caused a widespread change of heart. With the government’s encouragement, many Japanese firms feel that the way to compete best with foreigners is to compete less at home.

Taking advantage of this feeling, the discreet monthly “presidents’ clubs” that control the three zaibatsu giants have stepped up their efforts to coordinate more closely the activities of the old zaibatsu elements still on their own. They consider it wasteful, for one thing, that Mitsui alone still has four competing chemical companies within its loose empire. A 1947 antitrust law passed by the Japanese government at the insistence of the U.S. Occupation authorities (and softened by later amendments) seems to be no obstacle; after all, it has not stopped the zaibatsu. Still, there are other problems, such as how the merging companies will juggle their foreign commitments. One Mitsubishi subsidiary, for example, has an agreement with Caterpillar Tractor to produce the same products turned out by another Mitsubishi firm.

Angling & Go. After working out such problems and receiving expected governmental approval, the three Mitsubishi firms plan to merge in May. The man most likely to head the new company is Shinzo Fujii, 70, the president of Shin Mitsubishi, the biggest and financially strongest of the three firms. An even-tempered but forceful businessman, Fujii took over the reins of his company once more after a hand-picked successor died, would probably stay on just long enough to get the new company going strong. Unlike the old zaibatsu, whose power extended deeply into politics and military policy, today’s zaibatsu seem interested mostly in good management, efficiency and profit. Once he sees that the new giant is well equipped with all three, Fujii would like to spend more time at his favorite hobbies: angling and playing the Japanese chess game called Go.