The turnaround of Japan Railways group firms servicing Honshu and Kyushu over the past 30 years paints the 1987 privatization and breakup of the Japanese National Railways as a successful reform of the state-run train operator that was incurring more than ¥1 trillion in losses each year and piling up mountains of debt. However, the success of JR companies that benefit from the popular shinkansen superexpress services, profitable local train operations for urban commuters as well as diversification of their business comes in sharp contrast to the problems confronting group firms in rural regions where many train services remain in the red — a problem that threatens to get worse across the country as Japan's population continues to shrink.

The JNR, which accounted for half of the nation's passenger and freight transportation in the 1950s, began incurring heavy losses in the 1970s with the increasing use of automobiles and competition with air travel. Political meddling in its management meanwhile led to the construction of unprofitable railway lines nationwide, with its long-term debts snowballing to ¥37 trillion. In April 1987, the state-run behemoth was privatized and broken up into six regional railway firms and a nationwide freight train operator.

In the ensuing 30 years, the three Honshu-based JR firms — East Japan Railway, West Japan Railway and Central Japan Railway (JR Tokai) — steadily made progress in turning their operations into profitable businesses. Last year, they were followed by Kyushu Railway in having their shares listed, with the government selling off all of its stakes in the four firms to achieve full privatization of their management. Still, it must be remembered that the turnaround was achieved at a cost; as much as ¥24 trillion of the long-term JNR debt was eventually shouldered by the government at the expense of taxpayers, and out of the 277,000-member workforce of the JNR, only about 200,000 people were hired by the JR firms — with the remainder, including many memberse of a JNR union that continued to oppose the privatization and breakup, rejected.