Chief determined to build JR West into truly private enterprise

While Masataka Ide, the former president of West Japan Railway Co., was seen as a man of action, Shojiro Nanya, 55, who took over the JR West helm on April 1, is seen as a man of quiet resolve.

Ide played central roles in transforming the debt-ridden Japanese National Railways into seven JR group firms and then in taming JR West into a company with annual revenues of 1 trillion yen. Nanya supported the carrier throughout the transition period as Ide’s right-hand man.

“I learned from the former president to watch the trend of the times and act in advance before others start moving,” Nanya said in a recent interview. JR West is one of the seven JR group firms born in 1987 with the dissolution of JNR. In October, the carrier managed to list its shares on the stock markets.

The new president now faces the important task of making JR West a truly private firm, which means not only overseeing its breakaway from government control but also helping its management and employees shed the characteristics of bureaucracy. Of 2 million outstanding JR West shares, the government holds about 630,000. The government plans to sell those shares as early as possible, but it is likely to be some time before all the shares make it onto the stock market, considering the number of shares of other JR group firms that are still in government hands. Unless those shares are sold to the public, the Osaka-based carrier’s legal status remains government-affiliated.

Still, Nanya is optimistic. “Shares of Central Japan Railway Co. (JR Tokai) are scheduled to be listed on the stock markets this year,” Nanya said. “Idealistically speaking, we hope to list our remaining shares next year.” But even if the government sells its shares in the company, a strong public-sector attitude could linger.

Because most JR West employees worked for the state-run JNR and are employees of a large company, they have adopted a bureaucratic way that may sometimes appear arrogant, Nanya said. “People compliment us by saying our services have shown much improvement,” he said. “But it is only in comparison with the former JNR. “We must prove we can become a truly private company in terms of our business attitude and the company’s policymaking process.”

In dealing with the huge JNR debt problem, Nanya is following Ide’s lead in rejecting the government’s move to seek the JR group’s support in resolving the issue. JR firms took over 40 percent of the 37.1 trillion yen JNR debt and unlike the government have been steadily repaying their share, Nanya said.

“We are not responsible for the rest of the debt left to the semigovernmental JNR Settlement Corp.,” he said. “And the government should resolve the issue as a fiscal problem along with other outstanding government debts of about 250 trillion yen.” The government, which is now looking for financial sources to resolve the debt, is discussing various ideas, including creating a new bullet-train tax and asking JR group firms to accept an additional financial burden.

Dismissing those ideas, Nanya said, “Imposing a new tax on users of JR services or accepting a further financial burden is impossible because we cannot explain these things to our customers or shareholders.” JR West has launched many non-railway businesses, including convenience stores, travel agencies and hotels. In March 1995, the carrier opened a new hotel adjacent to JR Okayama Station. It is now constructing a new Kyoto Station building that will be completed in September. “We don’t intend to undertake such large-scale projects in the future,” Nanya said. “Rather, we want to find new business that will serve the local community around our railway stations.”