Rebirth Tokyo 1986

Chapter 451 Nissan cars are not bad either

"Ah, I've finally finished watching it."

The Xinghai Group's third-quarter report was very long, and it took Masato Takeshita three days to get a general understanding of it.

He then stretched comfortably, rubbed his eyes, and yawned a few times. Finally, he lazily swayed to the office's bathtub, ready to enjoy a relaxing hot bath.

"Ah, cool!"

Takeshita Masato quickly entered the water, his body trembled with pleasure, and he felt as if he were floating on air.

He loves taking hot showers, so the first thing to be upgraded in the office was the bathroom.

From the initial tiny room that could only be used for showering, to the current hot water pool of over 30 square meters, this is the result of his constant instructions to his employees to make improvements.

In addition to this large hot water pool, Xinghai Group also built a special swimming pool for him.

However, it's winter now, and the young people aren't very interested in playing.

The hot water pool is very quiet, which is very conducive to thinking.

After resting for only two or three minutes, Masato Takeshita began to think about the company's new investment targets.

"Foreign companies don't need to rush. It's better to wait until Soros' second attack is over."

"Domestic companies that could be acquired include Lawson convenience stores, Changxin Bank, Chiyoda Life Insurance, and Toho Life Insurance..."

Lawson convenience stores and Changxin Bank were the goals that the young man had already set in mind.

Since the beginning of this year, these two companies, like Yamaichi Securities, have been targets of his planned merger.

At the same time, these three companies are the easiest to acquire; Lawson and Changxin can be easily won over next year.

As for the several unfamiliar life and property insurance companies, these were targets that Masato Takeshita had recently selected, with the main aim of enhancing the group's position in the insurance industry.

Xinghai Insurance is too weak and needs to make more acquisitions to become an influential insurance company in Japan.

However, we cannot engage in reckless acquisitions.

Prior to 1996, the Japanese insurance industry was very conservative. Major insurance companies typically had only 20 life insurance companies and 20 property insurance companies.

Such a stable structure, along with so many insurance companies, has fostered the inherent tendency of insurance companies to spend money recklessly.

In order to collect more premiums, some companies even offer annual interest rates of 6% or higher.

Before the bursting of Japan's economic bubble, doing this would naturally have been fine.

Because at that time, Nikkei's growth rate easily exceeded 20%.

Once the bubble bursts, things will fall apart. Forget about maintaining an annual profit of over 6%; even just being profitable would make a decent investment company.

The ultimate consequence was that insurance companies were gradually crushed by the high profits they offered to their customers.

In April 1997, an insurance company went bankrupt due to insolvency, which set the stage for the bankruptcy of large financial institutions in Japan.

Yes, it's different from other places.

The wave of bankruptcies among Japanese financial institutions began with insurance companies.

As for the peak, they were all pretty much the same, mainly due to the bankruptcies of investment banks and banks.

"Hmm, let me think, are there any other companies we can try to reach?"

It's unacceptable that during an economic crisis, most of the acquisitions would be of companies in the financial sector; that would be contrary to Xinghai Group's main development direction.

Xinghai Group aims to become a world-class super industrial group, not just a top financial giant.

"I've got it. Fuji Heavy Industries seems like a good company."

Fuji Heavy Industries, which later became Subaru, was a company that specialized in manufacturing aircraft during World War II.

However, after the war, Fuji Heavy Industries was broken up in various ways and was transformed from the original Japan First Aircraft Manufacturing Company into a second- or third-rate company.

Yes, that's how badly Fuji Heavy Industries was doing at that time.

Subaru, a flagship industry, only sold 200,000 to 300,000 cars a year, less than one-fifth of what it would sell in later years.

Aircraft manufacturing, which used to be their main industry, now only accounts for a tiny fraction of their business.

If the Japanese government hadn't wanted to prevent Mitsubishi from monopolizing the domestic aircraft industry, they probably would have lost even a fraction of it.

More importantly, both of Fuji Heavy Industries' two major shareholders, Industrial Bank and Nissan Motor, are currently struggling to survive.

Industrial Bank suffered severe losses due to providing too many loans to Southeast Asia and South Korea, causing its ranking among the world's top 500 companies to drop repeatedly.

Another Nissan company faced even more serious problems and gradually headed for bankruptcy.

Yes, Nissan is already teetering on the brink of bankruptcy.

The reason is very simple.

Nissan has always focused on the domestic market, but sales in the domestic market have declined for two years since the bursting of the economic bubble.

Given the current environment, no matter how hard you try, it's useless.

Therefore, Nissan has been losing money since 1993 and will continue to do so.

"Wait a minute! Why would I go through all that trouble to acquire Fuji Heavy Industries? Wouldn't it have been simpler to just acquire Nissan directly?"

The shareholders behind Nissan Motor are even more eager to sell their company shares than the shareholders behind Yamaichi Securities.

Next year, the demands will even extend to foreign automakers.

Ultimately, Ford and other companies were not interested, and it was eventually acquired by Renault through a shareholding.

If Xinghai Group reveals its intention to acquire the company, it will definitely go very smoothly.

The Japanese government, in particular, was willing to go to great lengths to help.

There's no way around it; large automakers have a huge impact on employment.

If a bankruptcy occurs, anywhere from hundreds of thousands to millions of people will lose their jobs.

Of course, not all of these people are employees of car companies; the vast majority are likely employees of small companies in the automotive supply chain.

But that's precisely what makes it so difficult. Because when the job market is bad, it's even harder for unemployed people from small businesses to find work.

This is also the main reason why the US government later provided huge subsidies to domestic companies such as Ford every year.

No politician would dare to let millions of people lose their jobs at the same time; that would be playing with their own and their party's political life.

Nissan is in a similar situation; even though losses increase year after year, the government still has to provide financial support.

Unless the Japanese economy improves again and companies launch a new round of talent wars, the government will not stand idly by and allow large automakers suffering further losses to go bankrupt.

"What a stupid idea. It's decided. Our target is Nissan. We'll try to get a 67% stake for $90 billion."

In its previous life, Renault acquired more than 38% of Nissan Motor's shares for just over $40 billion.

With Xinghai Group increasing its stake to tens of billions of US dollars, acquiring a 67% stake should not be a problem.

Of course, if that doesn't work, Masato Takeshita can add another $20 billion to increase the figure to tens of billions.

In short, he was willing to spend more money to gain complete control of Nissan.

With that thought in mind, Takeshita Masato lost all interest in taking a bath.

He directly summoned Suzuki Zensuke, a company veteran and now a retired board member, to the company.

"Mr. Suzuki, I'm so sorry to have called you to the company so suddenly."

"Not at all, Chairman, you're too kind. I'm just a company employee, there's nothing to be embarrassed about."

Although he was already semi-retired and only came to the company once or twice a month for a symbolic meeting, Suzuki Zensuke was still willing to help out whenever the chairman asked him to.

However, he was somewhat puzzled.

He didn't understand how he could still help the company in his current situation. "Yes, yes, Director Suzuki has always been an important member of the company."

After exchanging pleasantries and drinking some tea, Takeshita Masato finally revealed his thoughts.

"Can Nissan make it?"

"Don't worry, everything is definitely fine now."

Nissan's continued losses have caused considerable distress to its shareholders.

Industrial Bank, in particular, is eager to liquidate all its shares immediately.

There was nothing they could do; Industrial Bank was also struggling to survive.

Of course, the biggest impact came from the financial crisis that broke out this year.

If it weren't for this crisis, Industrial Bank would still be able to get by and continue lending to Nissan.

That won't work now. Industrial Bank needs to tighten its credit to guard against a possible major crisis, so it naturally dares not extend huge sums of money to Nissan anymore.

After listening to his chairman's explanation, Zensuke Suzuki nodded in understanding.

"I see, so Industrial Bank is like this now too. Sigh!"

Zensuke Suzuki couldn't help but sigh as he thought about the help the Industrial Bank had given to the company.

He genuinely didn't want to see Industrial Bank decline and hoped it could rise again.

"Yes, the new president of Industrial Bank and senior student Toyoshima don't get along at all."

"Senior student Toyoshima advocates reducing loans and allocating more funds to investing in high-quality companies."

"The new president, however, advocates following government guidance and continuing to maintain the bank's fleet model, providing funds to companies in need."

At this point, Masato Takeshita shrugged helplessly. He continued only after Zensuke Suzuki had almost finished processing what he'd said.

“We all know that given the current difficult economic situation in Japan, Senior Toyoshima’s policies are correct.”

"But there's nothing we can do. Toyoshima is only the vice president, and his strength is not as great as the new president's. In addition, the new president has the power to influence the club, so Toyoshima has even less of a chance to compete."

The main bank system, an economic system that had been in operation in Japan for many years after the war, had become ingrained in social production.

Even if Akio Toyoshima were to become the head of the department, he would be powerless to resist his deputy's policies.

Moreover, since he wasn't even in a full-time position, he had even less chance of resisting.

Unfortunately, for many people, the ancestral laws are immutable.

People will only accept reforms when they are driven to the brink of despair.

"That's true. It's not just banks; even the government has a lot of zombie companies."

Although Zensuke Suzuki is semi-retired, he is not idle. He often represents the Xinghai Group at various economic associations.

Within the economic society, he learned a great deal about economics and gained a deeper understanding of the current situation in Japan.

"There's no other way; the public's debt is too high. Once a large number of zombie companies go bankrupt, it will trigger a chain reaction."

The most important reason why Japan doesn't implement massive unemployment measures like other countries across the sea is the impact of high levels of debt among its citizens.

Once someone loses their job and can't repay their loan, it immediately triggers a chain reaction.

Putting aside other factors, the financial industry would be ten times worse off than it is now.

Of course, the real economy sector will also suffer.

The only beneficiaries should be private lending companies.

Following the Asian financial crisis of the previous century, Japanese private lending companies experienced explosive growth.

The best of the best can even become the richest person in the country.

If the Japanese government were to allow even larger-scale unemployment to occur, it could potentially create the world's richest person.

"Yes, Japan right now can't afford any more large-scale disruptions."

Zensuke Suzuki thought about the current situation in Japan and realized that it was indeed a hopeless situation.

"Alright, there's no use thinking about this. Let's think about how to acquire Nissan."

"Here's what we'll do: you go over there first and find out what's going on."

For a company as large as Nissan, Masato Takeshita is prepared for a long-term commitment.

If the acquisition can be completed by this time next year, it will be a great success.

Of course, it's not impossible to delay until 1999. Xinghai Group has time; they can wait patiently.

As for the fact that the conglomerate that owns Nissan Motors does not want to sell to Xinghai Group and is only willing to trade to foreign car companies, the young man simply ignores it.

The Japanese people are still very patriotic. As long as Xinghai Group is even slightly exposed, it can destroy the possibility of the deal being made with a foreign company.

In fact, this is not unique to Japan; many countries are in a similar situation. Only companies that the country itself no longer wants will be sold to foreign companies.

Of course, "young people" refers to the normal situation.

In countries that prioritize attracting foreign investment, there may be situations where companies would rather be sold off to foreign entities at low prices than be willing to work hard to manage them themselves.

However, this situation is destined to be short-lived. Ultimately, it will return to the path of domestic high-quality companies selling off their domestic counterparts.

"Yes, President, I understand!"

"Okay, then you can go ahead and get busy."

"Yes, President!"

In the following days, Zensuke Suzuki began to frequently visit Nissan Motor Company, making overt and covert attempts to probe their intentions.

As for Masato Takeshita, he was also busy, instructing his secretariat to search for Nissan-related information throughout Japan.

Consulting firms, current and former executives of Nissan Motor Co., as well as its parts suppliers and dealers, are all targets for young people.

In short, the goal is to gain a more comprehensive understanding of Nissan's operations in order to pave the way for future acquisition negotiations.

"So, what do Nissan's executives think?"

The two agreed to meet once a week, and today happened to be the day they met for the first time.

Masato Takeshita wanted to know the current situation of Nissan Motors and whether it was appropriate to propose an acquisition.

"Nissan's top executives are still intoxicated by the company's past glory and believe that the new technologies the company develops can revive that glory as soon as they go online."

Zensuke Suzuki looked somewhat embarrassed, feeling that he had failed the chairman's expectations.

However, there was no way around it; Nissan simply didn't have a strong sense of crisis internally.

"I see. It seems we'll have to wait and see."

Masato Takeshita understands the mindset of Nissan executives; after all, no one wants to admit defeat until the very end.

But while I understand, I can't let Nissan's top management ruin my plans.

He looked up and asked seriously, "So, Mr. Suzuki, have you found out when their new technology will be available?"

"Yes, the expected time is next summer."

"OK, I understand. For now, your main focus should be on building relationships with them. Don't mention the acquisition yet; we can discuss that in detail after the new technology is launched."

Without access to a global market, Nissan's plans were doomed to fail.

The young man should watch them give up, and then take them down in an easier way.

(End of this chapter)