In Japan
During the occupation of Japan, under the Supreme Commander of the Allied Powers, General Douglas MacArthur, a partially successful attempt was made to dissolve the zaibatsu in the late 1940s. Sixteen zaibatsu were targeted for complete dissolution, and 26 more for reorganization after dissolution. However, the companies formed from the dismantling of the zaibatsu were later reintegrated. The dispersed corporations were reinterlinked through share purchases to form horizontally integrated alliances across many industries. Where possible, keiretsu companies would also supply one another, making the alliances vertically integrated, as well. In this period, official government policy promoted the creation of robust trade corporations that could withstand heavy pressures from intensified trade competition.
The major keiretsu were each centered around one bank, which lent money to the keiretsu member companies and held equity positions in the companies. Each bank had great control over the companies in the keiretsu and acted as a monitoring and emergency bail-out entity. One effect of this structure was to minimize the presence of hostile takeovers in Japan, because no entities could challenge the power of the banks.
Although the divisions between them have blurred in recent years, there have been nine major postwar keiretsu:
Name | Bank | Major group companies |
---|---|---|
Mitsubishi | Mitsubishi Bank (until 1996) Bank of Tokyo-Mitsubishi (1996–2005) Bank of Tokyo-Mitsubishi UFJ (2006– ) Mitsubishi Trust and Banking |
Financial: Mitsubishi Corporation, Tokio Marine and Fire Insurance, Mitsubishi Estate, Meiji Mutual Fund Construction: Pacific Consultants International Food: Kirin Brewery Electronics: Mitsubishi Electric, Mitsubishi Precision Trading and Commerce: Mitsubishi Shoji Cars: Mitsubishi Motors, Mitsubishi Heavy Industries, Mitsubishi Fuso Truck and Bus Corporation Petroleum: Nippon Oil, Mitsubishi Oil, Mitsubishi Nuclear Fuel Precision Machinery: Nikon Chemicals: Mitsubishi Chemical, Mitsubishi Gas Chemical, Mitsubishi Rayon Co., Ltd., Mitsubishi Materials Corp., Mitsubishi Plastics Industries, Asahi Glass, Nippon Synthetic Chemical Industries (Nippon Gosei) Paper: Mitsubishi Paper Mills Ltd. Iron and Steel: Mitsubishi Steel Shipping: Nippon Yusen |
Mitsui | Mitsui Bank (until 1990) Sakura Bank (1990–2001) Sumitomo Mitsui Bank (2001– ) Sony Financial, Sony Bank |
Financial: Mitsui Real Estate, Mitsukoshi, Mitsui Mutual Life, Mitsui Marine & Fire Food: Nippon Flour Mills, Mitsui Sugar, Suntory Chemicals: Fuji Photo Film, Mitsui Toatsu Chemicals, Mitsui Petrochemical Industries, Toagosei Chemical Industries, Denki Kagaku Kogyo, Daicel Chemical Industries, Mitsui Pharmaceuticals, Mitsui Toatsu Fertilizers, Mitsui Toatsu Dyes, Toray Trading and Commerce: Mitsui Bussan Petroleum: General Sekiyu, Kyokuto Petroleum Industries Electronics: Sony Corporation, Yaussa Corporation, Ibiden Company, Toshiba Iron and Steel: Japan Steel Works Gaming: Sony Computer Entertainment Entertainment: Sony Pictures Entertainment, Sony Music Entertainment other Sony subsidiaries, and Media Nusantara Citra |
Sumitomo | Sumitomo Bank (until 2001) Sumitomo Mitsui Bank (2001– ), Sumitomo Trust and Banking |
Financial: Sumitomo Corporation, Sumitomo Corporation of America, Sumitomo Mitsui Financial Group, Sumitomo Trust & Banking, Sumitomo Life Insurance Co., Sumitomo Real Estate, Mitsui Sumitomo Insurance Co., Ltd., Sumitomo Realty & Development Co., Ltd., Presidio Ventures,
Construction: Sumitomo Mitsui Construction Co., Ltd., Sumitomo Densetsu, Sumitomo Osaka Cement Co., Ltd., |
Fuyo | Fuji Bank (until 2000) Mizuho Bank (2000– ) Yasuda Trust and Banking Yamaichi Securities |
Financial: Yasuda Mutual Life, Yasuda Marine & Fire Food: Nisshin Flour Milling, Sapporo Breweries Precision Machinery: Canon, Hitachi, Ricoh Trading and Commerce: Marubeni Chemicals: Showa Denko, NOF Corporation, Kureha Chemical Industries, Nippon Sanso, Hitachi Chemical, Asahi Kasei Rail: Tobu Railway Vehicles: Yamaha, Nissan Retail: Matsuya |
Dai-Ichi Kangyo (DKB) | Dai-Ichi Kangyo Bank (until 2000) Mizuho Bank (2000– ) Kankaku Securities Orient Group |
Financial: Fukoku Mutual Life, Asahi Mutual Life, Nissan Marine & Fire, Taisei Marine & Fire Electronics: Fujitsu, Hitachi, Fuji Electric, Yaskawa Electric, Nippon Columbia Cars: Isuzu, Kawasaki Heavy Industries Power Generation: Tokyo Electric Power Petroleum: Showa Shell Sekiyu Precision Machinery: Asahi Optical Trading and Commerce: Seibu, Itochu, Iron and Steel: Kawasaki Steel, Japan Metals, Kobe Steel Chemicals: Denki Kagaku Kogyo-Mitsui Group, Nippon Zeon, Asahi Denka Kogyo, Sankyo Co., Lion Corporation, Kyowa Hakko Kogyo, Asahi Chemical Industries |
Sanwa ("Midorikai") | Sanwa Bank (until 2002) UFJ Bank (2002–2006) Bank of Tokyo-Mitsubishi UFJ (2006– ) Toyo Trust and Banking |
Food: Itoham Foods, Suntory Rail: Hankyu Railway, Keisei Railway Steel: Kobe Steel, Nakayama Steel Works, Nisshin Steel Precision Machinery: Konica Minolta, Hoya Corporation Petroleum: Cosmo Oil Electronics: Hitachi, Iwatsu Electric, Sharp Corporation, Nitto Denko, Kyocera Trading and Commerce: Takashiama, Orix, Nissho Iwai Chemicals: Ube Industries, Tokuyama Corp, Hitachi Chemical, Sekisui Chemical, Kansai Paint, Tanabe Seiyaku, Fujisawa Pharmaceutical, Daiso Co., Teijin, Unitika Fukusure Cars: Hitachi Zosen Corporation Retail: Takashimaya Cinema: Toho Shin-Maywa |
Tokai (Toyota Group) |
Tokai Bank Chuo Trust |
Food: Kagome Cars: Daihatsu, Suzuki Motor, Toyota Steel: Daido Steel Precision Machinery: Ricoh Petroleum: Idemitsu Kosan Electronics: Ushio Industries Trading and Commerce: Matsuzakaya |
IBJ |
Industrial Bank of Japan, New Japan Securities Wako Securities IBJ Securities |
Cars: Fuji Heavy Industries Precision Machinery: Ikegai, Riken Chemicals: Nippon Soda, Chisso Corporation, Nissan Chemical, Tosoh Corporation, Hodogaya Chemical, Plas-Tech, Taihei Chemical, Japan Organo, Kuraray |
Toyota is considered the biggest of the vertically integrated keiretsu groups. The banks at the top are not as large as normally required, so it is actually considered to be more horizontally integrated than other keiretsu.
The Japanese recession in the 1990s had profound effects on the keiretsu. Many of the largest banks were hit hard by bad loan portfolios and forced to merge or go out of business. This had the effect of blurring the lines between the individual keiretsu: Sumitomo Bank and Mitsui Bank, for instance, became Sumitomo Mitsui Banking Corporation in 2001, while Sanwa Bank (the banker for the Hankyu-Toho Group) became part of Bank of Tokyo-Mitsubishi UFJ.
Generally, these causes gave rise to a strong notion in the business community that the old keiretsu system was not an effective business model, and led to an overall loosening of keiretsu alliances. While they still exist, they are not as centralized or integrated as they were before the 1990s. This, in turn, has led to a growing corporate acquisition industry in Japan, as companies are no longer able to be easily "bailed out" by their banks, as well as rising derivative litigation by more independent shareholders.
Read more about this topic: Keiretsu, Nature of The Keiretsu
Famous quotes containing the word japan:
“I do not know that the United States can save civilization but at least by our example we can make people think and give them the opportunity of saving themselves. The trouble is that the people of Germany, Italy and Japan are not given the privilege of thinking.”
—Franklin D. Roosevelt (18821945)