Keidanren, Nikkeiren considering 2002 merger

Key business groups the Japan Federation of Economic Organizations (Keidanren) and the Japan Federation of Employers’ Associations (Nikkeiren) are discussing a merger, industry sources said Tuesday.

The timing for such a merger would probably be May 2002, when the term of office for the current Keidanren chairman, Takashi Imai, expires, the sources said.

Keidanren, Japan’s leading business lobby, represents the interests of more than 1,000 major companies, while Nikkeiren, currently headed by Hiroshi Okuda, is a group of more than 100 employers’ associations primarily handling labor and management issues.

For member companies, the merger would enable them to save on membership fees, the sources said.

Both groups have noticed an increase in overlap of their activities and areas of interest, the sources said. Trends toward consolidation and streamlining at private-sector companies and government ministries and agencies have also created an atmosphere for a merger, according to observers.

Since the start of this year, the top executives of both groups have been discussing a possible integration. They have been working together to draw up similar policy proposals to the government on issues of common interest, such as social security.

In 1997, Shoichiro Toyoda, then Keidanren chairman, expressed an interest in merging with Nikkeiren, but Nikkeiren’s regional associations rejected his proposal.

Keidanren chiefly serves the interests of Japan’s biggest firms and industrywide organizations based in Tokyo.

But as Nikkeiren is a composite of prefectural and industry-specific associations of employers, it could take some time and effort to forge a consensus toward a merger, the sources said.

In his 2000 New Year address, Keidanren Chairman Imai said a merger is possible if Nikkeiren can resolve disparate views among regional organizations.

Established in 1946, Keidanren has wielded considerable influence on national industrial policy through its policy proposals and demands to the government.

Until the early 1990s, the group was also known as an intermediary of corporate political donations to the Liberal Democratic Party.

It ceased to serve as an intermediary for donations in 1993. Keidanren, by concentrating on proposal-making, now functions more like a think tank.

Nikkeiren was set up in 1948 by employers to counter the growing labor movement after the war. It has become a major voice for businesses on labor issues and in wage negotiations.