/ |

Tycoon aims to speed up politics

Business tycoon Hiroshi Okuda is said to be meeting frequently but secretly with leading figures of both the ruling Liberal Democratic Party and the No. 1 opposition Democratic Party of Japan, apparently with an eye to reorganizing the political landscape after general elections expected in the not-too-distant future.

He is gravely concerned that his country might become isolated in the international community if the Diet remains “twisted” — with the LDP-led governing coalition holding a two-thirds majority in the Lower House and the DPJ and other opposition parties holding a majority in the Upper House. Legislative bills initiated by the government have been blocked.

Okuda, the former CEO of Toyota Motor Corp. who served as chairman of the Japan Business Federation (Nippon Keidanren), has long been known to have close relations with political leaders, who often have turned to him when in trouble.

As recently as March, Prime Minister Yasuo Fukuda asked Okuda to succeed Toshihiko Fukui as governor of the Bank of Japan. If he had accepted the offer, his nomination could well have been approved by both houses of the legislature and he would have become the first head of the central bank with a manufacturing background. Okuda declined, and Fukuda named two former Finance Ministry bureaucrats in succession. Both nominations were rejected in the Upper House, creating a temporary vacancy in the top central bank post.

Under former Prime Minister Junichiro Koizumi, Okuda, as a member of the Council on Economic and Fiscal Policy, gave wholehearted support to Koizumi’s thoroughgoing “structural reform” agenda, which included privatizing the postal services. It is no wonder that intimate relations have developed between the two and that Koizumi relied on Okuda on a number of occasions.

Okuda appeared to have gone into retirement after handing over the chairmanships of Nippon Keidanren and the Industrial Structure Council to Canon Inc. Chairman Fujio Mitarai. Nippon Keidanren, meanwhile, had ended its 10-year moratorium on making contributions to political parties, a decision that pleased the LDP, which was suffering from fund shortages.

Politicians’ reliance on Okuda revived after a series of actions taken by Mitarai proved unpopular. In February, Prime Minister Fukuda bypassed Mitarai and named Okuda to head a council to deliberate on the key issue of global warming ahead of the summit meeting of the Group of Eight industrialized nations, to be hosted by Japan in July.

It appears that whatever Fukuda accomplishes with the advice of Okuda could have a major impact on his own government.

Why is it that Okuda enjoys so much trust from leading political figures? One reason is that he still wields much influence over the Toyota group, whose annual profits reach ¥2 trillion. Both the governing and opposition parties hope to receive political contributions through initiatives from Okuda and Toyota. Numerous corporations in Japan are looking for business opportunities with the Toyota group, whose yearly global turnover is in the ¥25 trillion range.

Mitarai is said to have followed Okuda’s advice: that companies making big profits should not hesitate to raise employee wages. This, coupled with Canon’s decision to give full employee status to temporary workers, has restored public confidence in him.

At a news conference in February, Mitarai said Japan should open dialogue with the European Union on how trading rights to greenhouse-gas emissions can reduce carbon dioxide. This is a drastic departure from the “absolute opposition” that Nippon Keidanren — whose principal members are from the electric power, steel and other industrial segments — had taken to such action.

This turnaround is also said to be the result of Okuda’s advice to Mitarai. This is understandable because Okuda has a track record of making Toyota an environmentally friendly company, having initiated development of the low-emission “hybrid” automobile — which runs on both a gasoline engine and a battery — over strong opposition within his own company. Okuda is said to have advised Mitarai that continued opposition to limits on carbon dioxide emissions would endanger the latter’s position as a leader in business circles.

A strong bond between Okuda and DPJ President Ichiro Ozawa is also said to have been instrumental in restoring the relationship between Nippon Keidanren and the No. 1 opposition party, which had been severed for three years.

One evening in early April, Okuda was having drinks with Koizumi, and a number of powerful lawmakers from both the LDP and the DPJ were with them. Okuda sought to drive home the point that the political objectives of business circles had not materialized.

Even though Nippon Keidanren, under his leadership, decided to resume political contributions with the aim of exerting influence on politics, nothing much has happened since the opposition camp won a majority in the Upper House election last year. Okuda is deeply concerned that unless this situation is rectified, Japan will become isolated in the international community.

That’s why Okuda has been meeting with leading political figures of both camps frequently but secretly. He appears set on reorganizing the entire Japanese political landscape after the next general elections. He is supported by Koizumi, Mitarai and Takashi Imai, honorary chairman of Nippon Steel Corp.

It should be noted that a move toward political reorganization at the initiative of a business leader has never worked before. If Okuda fails in his bid, he could end up a laughingstock, like a 21st-century Don Quixote.

A chivalrous spirit may be driving him. Regardless of the outcome, Okuda is likely to remain most influential as Mitarai’s mentor.

This is an abridged translation of an article from the May issue of Sentaku, a magazine covering Japanese political, economic and social topics.