MITI and the Japanese miracle

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Shigenobu at Toyota, Yamazaki Ryuzo * (a former chief of the International Trade Bureau) at Nissan, Suganami Shoji* (a former chief of the Commercial Affairs Bureau of MCI) at Hino, and several others.

Unfortunately for MITI, however, it had no "old boy" contact at Mitsubishi Motors (Mitsubishi Heavy Industries before June 1, 1970) for the simple reason that Mitsubishi, of all the old zaibatsu, was the most rigorous in excluding former bureaucrats from its ranks (with one or two exceptions in Mitsubishi Trading). Moreover, as the largest and most distinguished keiretsu in the country, Mitsubishi was definitely displeased by MITI's policy of building only two auto empires, Toyota and Nissan, which left it out of this business. Mitsubishi was also less fearful of foreigners than were the trade and industry bureaucrats: Mitsubishi Petroleum had long been associated with Getty Oil; the keiretsu had entered into numerous joint ventures (Caterpillar Mitsubishi, Mitsubishi-York, Mitsubishi-TRW, Mitsubishi-Mallory, Mitsubishi-Monsanto, and so forth); and, given Mitsubishi's huge financial resources, the Japanese side in any auto deal was more likely to buy out its foreign partner than the other way around.

The stage was thus set for the biggest shock MITI ever received in its history, the announcement of May 12, 1969, that Vice-President Makita Yoichiro* of Mitsubishi Heavy Industries had returned from Detroit with an agreement with Chrysler to create a new automobile company (Mitsubishi would contribute an initial capital of ¥46 billion, or 65 percent, and Chrysler ¥16.1 billion, or 35 percent). Yoshimitsu Hisashi, the incumbent chief of the Heavy Industries Bureau, said that the announcement hit him like water poured into his ear while he was sleeping (

nemimi ni mizu da

, that is, like a "bolt from the blue"), and Vice-Minister Kumagai declared himself appalled.

²²

The fallout from the Mitsubishi-Chrysler agreement was enormous. The politicians and the businessmen immediately read it as a declaration of independence by some big businessmen from MITI. On October 14, 1969, the cabinet decided to speed up the liberalization of automotive capital, now scheduling it for October 1971. The government would not approve the Mitsubishi-Chrysler deal until that time, but when the time arrived it could stall no longer. During the autumn of 1969 Mitsubishi opened assembly lines for a car called the "Colt Gallant Hardtop," which it proudly showed off to Chrysler distributors who visited Japan as a delegation during EXPO 70, the big international exposition sponsored by MITI. As soon as the date for liberalization had passed, the joint venture was put into effect and Chrysler began to sell the Mitsubishi car in the United States as the