The months of August began with a breaking story from the Nikkei: Hitachi Corporation and Mitsubishi Heavy Industries (MHI) were in discussions to merge. The stories were not clear if the merger would be of some of their business (not that uncommon—see, for example, TMEIC), or their entire business. If it was a true merger of both companies, it would create Japan’s largest company after Toyota.

The reasons for such a merger are obvious, as they are one of many types of Japanese companies facing two problems: a shrinking domestic market, and competition overseas from companies from places that they previously did not have to fight against (namely companies from Korea and China). A merger such as between Hitach and MHI would be a great way for Japan’s top-tier construction/technology/heavy industries companies to collaborate and compete not just again GE and Seimens (their historic rivals) but also Samsung and the growing horde of Chinese companies, when it comes to bidding and seeking overseas projects.

Yet the reaction by both companies to the release was a sharp denial. Hitach put out a one line press release: “The article is not based on a fact.” (When I read this, I was struck by the peculiar English—they surely did not mean to deny the singular fact but not deny the plural “facts,” but that was my first impressiony.) Then we had the MHI press release that reflected an ever worse command of the English language:

Even after a denial of the report this morning related to possible integration of business operations of Mitsubishi Heavy Industries, Ltd. (“MHI”) and Hitachi, Ltd., there have been a continuing flow of inaccurate information and reports pertaining to this matter. We feel uncomfortable that this inaccurate report continues. We hereby reiterate that the series of information is not based upon MHI’s own corporate decision or disclosure, and MHI has no plan to enter into any of the arrangement reported, while we resister strong objections to those inappropriate conducts.

My reaction reading that is to cringe. Why can’t these companies—which have hundreds of foreign employees—use native English speakers to check their English language public statements? You would think this is especially true for such statements that are picked up and read by the international press? This story is almost a month old, but I mention it because a person in Japan’s PR industry (which is basically dominated by two companies, Dentsu and Hakuhodo) just shared with me his insight that, while both these companies used Japan’s PR firms to handle their new product promotion and advertising, they take on this type of “crisis management” by themselves. For all the criticism that this blog has lobbed at Dentsu over the years, my feeling is—it shows! And hearing this, it reminded me of this section from a recent issue of “Terry’s Take”:

Traditional bedrock companies in Japan are proud and feudalistic. This used to be their strength—commonality of purpose, self-sacrificing employees, and no arguments about decisions from the top. However, with the advent of the information age, quality of response and reaction has become more important than unwavering commitment and persistence, and Hitachi in particular has suffered as a result. Perhaps ironic given that the company is so deeply involved in the IT industry.

Apologies for the lack of posts, and even moreso for the various technical errors that have befallen the blog in recent weeks. Specifically, that comments are completely broken, with neither new comments able to be posted, nor old comments able to be viewed. I do not know exactly how, but the database tables seem to have become corrupted, and it remains unclear as to whether or not they will be fully recoverable. The prognosis for recovery is mixed, but not dire. The best case scenario, naturally, is that I can recover all of the lost data and we can get back to normal. The worst case, however, is still far better than it could be.

First of all, I do have a complete backup of the database from February, and second of all only the comments section of the database has been mangled. Therefore, even should repairs on the extant database files be impossible, all that will be lost are the comments from the past few months. This would still be a fairly bad thing, particularly for the discussions during the tsunami/Fukushima crisis in March, but at least the posts themselves would be intact.

As I am currently commuting from Jersey into Manhattan, and in the middle of moving to Brooklyn (at least for the next 6 months) I am still a bit too short on time to sit down and get everything fixed, but rest assured that I will get things back to normal within the next couple of weeks, and that we will hopefully see a return to more normal levels of activity, and finally, that the blog’s crufty, outdated theme will finally be replaced with one that will look fairly similar, but consist of code more befitting the browsers of 2011.

And let this be a lesson to all of you, as well as myself: backup your data early, often, and to a safe place.

I was Googling around for a new Twitter profile picture and came across these neat woodblock prints of street scenes in 1920s-30s Tokyo.

You might recognize this one as the old Tokyo municipal building on the grounds of Hibiya Park. Enjoy!

A “Golden share” is a Anglo-European legal concept by which one nominal share carries special veto rights and is able to outvote all other shares in certain specific circumstances. The term arose in the 1980s when the British government retained golden shares in companies it privatized, and later the concept emerged in Russia, Germany, Spain, and Portugal. They are typically held by a government organization, and the shares are over a government company undergoing the privatization. The share gives the government organization the right of decisive vote, thus to veto all other shares, in a shareholders-meeting. In Europe, this share is often retained only for some defined period of time to allow a newly privatised company to become accustomed to operating in a public environment. Wikipedia has more on the concept here.

Readers may be surprised to learn that golden shares were one of the concepts quietly introduced with Japan’s new Company Law of 2006. Under article 108 of the law, “preferred shares with veto rights” (kyohiken tsuki shurui kabushiki) were created, which are referred to as “Golden Shares” (ougon kabu). The shares cannot be transferred, and under guidelines issued by METI and MOJ, they are designed to prevent hostile takeovers. The purpose of golden shares in Japan is therefore somewhat different from the British/European concept, where they are used to transition state companies into the private sector.

The Tokyo Stock Exchange has said that companies with golden shares will not be listed, for the plain reason that they violate the principle of shareholder equality. Following opposition from the business community, on the basis of certain exceptions, such as if a general shareholder meeting approved the listing regardless of the golden shares, and the golden share not violating shareholder profits, this initial policy was changed. Any breach of this principle would result in delisting.

Presently, there is just one listed company in Japan that has golden shares—Kokusai Sekiyu Kaihatsu Teiseki Kabushiki Kaisha, or known in English and Japanese as INPEX. According to Wikipedia, the Minister of METI holds 29.35% of the ordinary shares of INPEX, in addition to just one “A-Class Share (Golden Share).” INPEX is Japan’s largest private company engaged in upstream oil exploration, and METI (and Japan as a whole) probably recognizes that this company is important enough that it shouldn’t be subject to hostile takeovers.

Tokyo Denryoku, or the Tokyo Electric Power Company, is abbreviated in English to TEPCO and is one of nine regional monopoly electricity companies. TEPCO also has its own Japanese abbreviation, touden. What about the rest of Japan’s eight regional monopoly electricity companies?

They each have their own abbreviation, which you think you could get confused with “Tokyo” and “Tohoku,” “Hokkaido” and “Hokuriku,” and “Chubu” and “Chugoku”. Read and learn:

Hokkaido Denryoku: Hokuden / HEPCO
Hokuriku Denryoku: Rikuden
Tohoku Denryoku: Tohoku EPCO / TOEPCO / ENEPCO (for “Eastern North” + EPCO）
Chubu Denryoku: Chuden / CEPCO
Kansai Denryoku: KEPCO / Kanden
Chugoku Denryoku: Chugokuden, Energia (an English name adopted to avoid confusion with Chubu Denryoku)
Shikoku Denryoku: Yonden
Kyushu Denryoku: Kyuden
Okinawa Denryoku: Okiden

This week, Japan’s political news was dominated by a political fight between the LDP and DPJ over whether Prime Minister Kan, the day after the March 11 earthquake, ordered Tepco to stop flooding the Fukushima Daiichi nuclear plant with seawater. Something shocking happened that poured cold water on that debate, however. The head of the facility admitted that regardless of orders from corporate headquarters to stop (apparently relaying the PM’s wishes), he continued the flooding operations because it was the right thing to do.

In many ways this conflict is a tempest in a teapot, at best a distraction from dealing with the nuclear accident and post-quake situation right now. But it does offer us a window, however slight, into how information has flowed (or not) among stakeholders and the public.

The Nikkei has an interesting lowdown on the farcical sequence of events:

The controversy began with a document issued Saturday by the government’s joint task force with Tepco, purporting to tell the “facts” of how seawater was injected into the No. 1 reactor March 12, the day after a tsunami crippled the Fukushima Daiichi nuclear power plant.

Tepco began pumping ocean water into the hot reactor at 7:04 p.m. without informing the government, according to the document. A company employee at the Prime Minister’s Office later telephoned the power plant and the injections stopped at 7:25, only to restart 55 minutes later, the report stated.

A different picture emerged Thursday.

At the time the pumping began, officials at company headquarters had decided there was next to no chance that the seawater would cause the fuel inside to go critical again, Tepco Vice President Sakae Muto told a news conference.

Prime Minister Naoto Kan had asked about that possibility in discussions with Nuclear Safety Commission Chairman Haruki Madarame and other advisers.

But what headquarters officials heard from the employee stationed at the Prime Minister’s Office was that the “atmosphere” there was that the cooling operation could not go ahead without the prime minister’s approval, according to Muto.

In a video conference with plant manager Masao Yoshida, Tepco officials decided to halt the seawater injections. But Yoshida disregarded that order, and the pumping continued. Although final authority did rest with the plant manager, he never reported his actions to headquarters. Head office officials, for their part, never confirmed with Yoshida that the order had been carried out.

At that stage in the crisis, with reactor coolant going up in steam and the fuel rods melting, every second counted. The plant’s emergency manual prescribes seawater injections in such a situation. Regardless of the “atmosphere” at the Prime Minister’s Office, turning off the pumps would have been the wrong decision, based on the conditions at the plant.

Asked why he decided to reveal that the seawater injections continued nonstop, Yoshida said he “thought it over again carefully after it became a controversy in the newspapers and the Diet.”

Right off the bat, I want to say that getting the “real” situation is basically impossible for the general public, and that’s kind of the point of this post. But assuming this report is basically true, it seems clear to me that this is definitely not a case of Tepco or the government hiding information, per se. Mr. Yoshida (who was apparently quoted indirectly through a Tepco spokesperson) was the only one hiding anything, for reasons he must think make sense, even if they deprive outside observers of an accurate picture of the situation.

Get a load of Tepco headquarters – they never confirmed whether he had actually stopped the water? I guess Yoshida just pretended to “restart” the operation when they said it was OK an hour later?

I have read so many articles saying that “Japan” has not been forthcoming with information about the nuclear accident, but I find that hard to believe. Information has been released by the truckload. The entire scandal got started when Tepco released a detailed breakdown of what happened. But even when important people have the best of intentions and submit a report in good faith, there’s no guarantee they will have all the facts.

The Kan government has recently announced an independent commission to study the accident, and the IAEA has its own people on the ground investigating. Openness isn’t the problem here. The problem is how difficult it is for outsiders to get a clear picture of a rapidly unfolding situation, even when the people in charge are trying to be forthcoming.

Again it’s hard to really feel like I have a sound basis to comment, but from my limited vantage point this incident makes a lot of people look bad, most of all the LDP who so quickly leaped on a potentially damaging decision by the prime minister for political gain, only to learn their entire premise was flawed. No one stopped the seawater because, thankfully enough, someone at Tepco had a cool enough head to not listen to superiors who were more worried about reading the Prime Minister’s “mood” than how to control the reactor.

Yoshida might be punished by Tepco for not reporting his actions, but I think he deserves a lot of credit for taking the necessary action. It also bears mentioning that his actions fly in the face of the common stereotype of Japanese deference to power.

1. Its name is Peach. Seriously.
2. It is a joint venture between All Nippon Airways and First Eastern Investment Group, a Hong Kong private equity firm.
3. Its livery designers apparently got their inspiration from the Barbie Jet.
4. “Peach” allegedly stands for Pan-Asian, Energetic, Affordable, Cute & Cool and Happy.
5. As many native English speakers instantly noticed, “Peach” is an anagram for “cheap.”
6. Peach claims to be Japan’s first low-cost carrier. Obviously, this is a blatant lie since Skymark and Air Do both preceded them and are both still flying.
7. They will be based at Kansai Airport in Osaka, where only the cheap survive.
8. Peach’s corporate parent, A&F Aviation, was recruiting operations personnel on LinkedIn’s job board a few months ago and didn’t seem to care that much about language ability. Their staff roster must look pretty interesting by now.
9. Peach is not the first fruit-themed airline. There is an airline in South Africa called Mango, and the US has both Berry and Lime. That said, Peach is probably the fruitiest of them all.
10. Peach is so cheap that they didn’t even have chairs at their first presser.

As an aviation geek, I am morbidly fascinated…

On May 19, the Yomiuri Shimbun evening edition ran an open letter by House of Councillors President  Nishioka Takeo in which he called upon Prime Minister Kan Naoto to resign due to his handling of the Fukushima nuclear crisis. This would be significant enough if Nishioka were a member of the opposition, but he belongs to the same DPJ as Kan himself. The letter, as well as the admission that Kan, based on unfounded concerns that the injection of seawater could induce re-criticality in the reactor, encouraged TEPCO to halt the injection of seawater based coolant into the plant, has spurred a movement towards calling a  no-confidence vote, with support from the Ozawa faction of Kan’s own DPJ, as well as from the opposition LDP. Among the harsh critics are LDP leader Tanigaki Sadakazu, who, based on the newly released information, described the decision to suspend the injection of seawater at such a critical stage as a “man-made disaster”.

Although the English Yomiuri website summarizes the key points of Nishioka’s letter in the same article I linked to above, they did not originally post the entire text or even publish it in the English print edition, although they did promise that “The English translation of Nishioka’s open letter to Kan will be carried on The Daily Yomiuri’s Commentary page on Tuesday.” Well, Tuesday has passed and you can now read the entire letter in English, at Yomiuri or below here.

In the annoyingly typical fashion of the Japanese newspaper industry, they haven’t even published the original Japanese text of the full letter online! Luckily it can be easily found on a number of Japanese blogs, and here I will give my own quick and dirty translation.

To Prime Minister Naoto Kan:

I am sure the weight of the world is on your shoulders, with duties that require your attention day and night. I thank you for your hard work.

As a representative of one of the supreme organizations in the nation’s three independent branches of authority, I would like to venture to express my candid opinion in this open letter. Prime Minister Kan, you should immediately resign from your post.

I think many people share my present thoughts about you: among them survivors of the Great East Japan Earthquake, residents forced to evacuate their homes due to the crisis at the Fukushima No. 1 nuclear power plant, members of the general public and Diet members from both opposition and ruling parties.

I also believe that heads of local governments and assembly members distrust and are concerned about you.

There is a reason why, despite this situation, hardly any voices have called, “Prime Minister Kan, you should resign.” It is generally believed it would be unthinkable to change the supreme leader of the nation at a time when serious problems are occurring that are not limited to national politics, and when measures are under way to deal with the situation.

However, you have continued to abandon your duties as prime minister since the March 11 disaster took place.

This is in itself unthinkable.

Given that you also abandoned your duties as prime minister last year, when a Chinese fishing boat collided with Japan Coast Guard ships off the Senkaku Islands in Okinawa Prefecture, I believe you are not aware of your duties as prime minister concerning state affairs.

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