Misplaced Pages

#375624

47-466: Mitsui Group ( 三井グループ , Mitsui Gurūpu ) is a Japanese corporate group and keiretsu that traces its roots to the zaibatsu groups that were dissolved after World War II. Unlike the zaibatsu of the pre-war period, there is no controlling company with regulatory power. Instead, the companies in the group hold shares in each other, but they are limited to exchanging information and coordinating plans through regular meetings. The major companies of

94-511: 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. The keiretsu model is fairly unique to Japan. However, many diversified non-Japanese businesses groups have been described as keiretsu , such as the Virgin Group (UK), Tata Group (India),

141-536: A horizontal keiretsu (also known as financial keiretsu ) is that it is set up around a Japanese bank through cross-shareholding relationships with other companies. The bank assists these companies with a range of financial services. The leading horizontal Japanese keiretsu , also referred to as the "Big Six", include: Fuyo , Sanwa , Sumitomo , Mitsubishi , Mitsui , and DKB Group . Horizontal keiretsu may also have vertical relationships, called branches. Horizontal keiretsu peaked around 1988, when over half of

188-424: A horizontal coalition of independent companies in the 1950s, once the occupation of Japan had ended and some of the smaller companies were allowed to re-coalesce. The central firms in the keiretsu became Mitsui Bank and Mitsui & Co. Mitsui lagged somewhat behind its rivals Mitsubishi and Sumitomo Group in reorganization. Mitsui Bank, which should have been the mainstay and principal capital provider of

235-503: A number of larger companies. Harvard Law School professor J. Mark Ramseyer and University of Tokyo professor Yoshiro Miwa have argued that the postwar keiretsu are a "fable" created by Marxist thinkers in the 1960s so as to argue that monopoly capital dominated the Japanese economy. They point to the sparsity and tenuousness of cross-shareholding relationships within the keiretsu , the inconsistency in members' relationships with

282-461: A political furor in Japan and resulted in the assassination of Mitsui executive Takuma Dan . During the 1930s and '40s, the subsidiary tobacco industry of Mitsui had started production of special "Golden Bat" cigarettes using the then-popular Far East trademark. Their circulation was prohibited in Japan and was used only for export. Local Japanese secret service kempeitai under the controversial Imperial Japanese Army General Kenji Doihara had

329-448: Is often loose and often not something considered in day-to-day decision making by its members. Vertical keiretsu (also known as industrial or distribution keiretsu ) are used to link suppliers, manufacturers, and distributors of one industry. Banks have less influence on vertical keiretsu . Examples of this type include Toyota , Toshiba , and Nissan . One or more sub-companies, arranged in tiers of importance, are created to benefit

376-614: The sakoku national isolation policy ended in the Bakumatsu period . During this period, the American Consulate General Townsend Harris was based at Zenpuku-ji in Azabu . Takashi served as an interpreter there at the age of 14. Masuda accompanied Ikeda Nagaoki in the unsuccessful 1863 Second Japanese Embassy to Europe to negotiate the cancellation of the open-port status of Yokohama. He

423-575: The Meiji Restoration , Mitsui was among the enterprises that were able to expand to become zaibatsu not simply because they were already big and rich at the start of modern industrial development. Firms like Mitsui and Sumitomo were led by non-family managers such as Minomura Rizaemon, who guided the business by accurately forecasting the coming political and economic situations, by acquaintance with high-ranking government officials or politicians, and bold investment. Mitsui's main business in

470-433: 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 eight major postwar keiretsu . Toyota is considered the biggest of the vertically integrated keiretsu groups, although

517-692: The surrender of Japan the Allied occupation forces partially attempted to dissolve the zaibatsu which had worked closely with the militarists during the first half of the 20th century and during the war. However, the United States government later rescinded those orders in an effort to reindustrialize Japan as a bulwark against communism in Asia, so the zaibatsu were never completely dissolved. The two types of keiretsu , horizontal and vertical , can be further categorized as: The primary aspect of

SECTION 10

#1732791447376

564-429: The "main banks" of each keiretsu , and the lack of power and reach of the zaibatsu alumni "lunch clubs" which are often argued to form a core of keiretsu governance. By April 2015, U.S. Trade Representative Michael Froman and Japanese Economy Minister Akira Amari, representing the two largest economies of the 12-nation Trans-Pacific Partnership , were involved in bilateral talks regarding agriculture and auto parts,

611-606: The "two largest obstacles for Japan." These bilateral accords would open each other's markets for products such as rice, pork and automobiles. During the two-day ministerial TPP negotiating session held in Singapore in May 2015, veteran US negotiator Wendy Cutler and Oe Hiroshi of the Japanese Gaimusho held bilateral trade talks regarding one of the most contentious trade issues, automobiles. American negotiators wanted

658-690: The 1890s in the machinery, textile, and paper industries. In 1900, Masuda created the Taiwan Sugar Corporation , beginning Mitsui’s expansion into Japanese overseas colonies. By the 1910s, Mitsui had developed into Japan’s largest general trading company, accounting for nearly 20% of Japan’s total trade. Masuda formally retired in 1913, and devoted his energies towards the Japanese tea ceremony . He had residences in Odawara and Kamakura , where he hosted tea ceremonies. He founded one of

705-441: The 2000s. For instance, many troubled Japanese companies are faced with a new reality in which receiving financial support from their main banks are getting harder and unlikelier than ever before. The companies include Sharp Corporation and Toshiba , both the iconic Japanese corporations that were forced to accept foreign investment in their aftermath of financial difficulties in 2010s. This changed environment, in turn, has led to

752-604: The Colombian Grupo Empresarial Antioqueño and the Venezuelan Grupo Cisneros . The automotive and banking industries have created broad cross-ownership networks across nations, but the national companies are normally independently managed. Banks cited as being central to keiretsu -like systems include Deutsche Bank and some keiretsu -like systems, generally referred to as trusts , were created by investment banks in

799-574: The Far East , sentenced to death; but no actions ever took place against the company which profited from their production. According to testimony presented at the Tokyo War Crimes trials in 1948, the revenue from the narcotization policy in China, including Manchukuo , was estimated in 20 million to 30 million yen per year, while another authority stated that the annual revenue was estimated by

846-583: The Japanese military at US$ 300 million a year. During the Second World War , Mitsui employed American prisoners of war as slave laborers, some of whom were maimed by Mitsui employees. In 1947 and 1948, the Supreme Commander Allied Powers pressed the Japanese government to dismantle the ten largest zaibatsu conglomerates, including Mitsui. The Mitsui Group, broken into many separate companies, reorganized itself as

893-463: The Japanese to open their entire keiretsu structure, a cornerstone of the Japanese economy, to American automobiles. They wanted Japanese dealer networks such as Toyota, Nissan, Honda, Mitsubishi, and Mazda to sell American cars. The successful conclusion of these bilateral talks was necessary before the other ten TPP members could complete the trade deal. Takashi Masuda Baron Masuda Takashi ( 益田 孝 , November 12, 1848 – December 28, 1938) ,

940-659: The Mint , but resigned in 1873. In 1874, Masuda established as vice president the Senshu Kaisha trading company in Tokyo with Inoue’s support. In 1876, at the age of 29, Masuda was appointed the president of Mitsui Trading Company ( Mitsui Bussan Kaisha ) and contributed to the development of the Mitsui zaibatsu . Mitsui quickly became a dominant player in Japanese exports of silk cloth and thread, cotton, coal, and rice, and in

987-1111: The Sumitomo Mitsui Financial Group. Mitsukoshi merged into Isetan , a major department store with close ties to the Bank of Tokyo-Mitsubishi UFJ , to form Isetan Mitsukoshi Holdings in April 2008. Companies associated with the Mitsui keiretsu include Mitsui & Co. , Sumitomo Mitsui Trust Holdings , Japan Steel Works , Mitsui Chemicals , Mitsui Construction Co., Mitsui Engineering & Shipbuilding , Mitsui Fudosan , Mitsui-gold, Mitsui Mining & Smelting Co., Ltd. , Mitsui Oil Exploration Co. (MOECO), Mitsui O.S.K. Lines , Mitsui Petrochemical Industries Ltd, Mitsui-Soko, Mitsui Sumitomo Insurance Group , Nippon Paper Industries , Pacific Coast Recycling, Sumitomo Mitsui Banking Corporation , Taiheiyo Cement , TBS Holdings , Toray Industries , Tri-net Logistics Management, and Mitsui Commodity Risk Management (MCRM). Keiretsu The members' companies own small portions of

SECTION 20

#1732791447376

1034-684: The United States such as JP Morgan and Mellon Financial / Mellon family beginning in the late 19th century (roughly the same period they were created in Japan), but they were largely curtailed through anti-trust legislation championed by Theodore Roosevelt in the early part of the 20th century. A form of keiretsu can also be found in the cross-shareholdings of the large media companies throughout most developed nations. These are largely designed to link content producers to particular distribution channels, and larger content projects, such as expensive movies, are often incorporated with ownership spread across

1081-415: 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 on 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

1128-525: The city of Edo, cash sales were not yet a widespread business practice. Edo's government had struck a business deal with Osaka . Osaka would sell crops and other material to pay its land tax. The money was then sent to Edo—but moving money was dangerous in middle feudal Japan . In 1683, the shogunate granted permission for money exchanges ( ryōgaeten ) to be established in Edo. The Mitsui "exchange shops" facilitated transfers while mitigating risks. After

1175-454: The company is rather considered as a "emerged" keiretsu , along with Softbank , Seven & I Holdings Co. 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

1222-570: The control of their distribution in China and Manchuria where the production exported. Within the mouthpiece were small discreet doses of opium or heroin, and consequently millions of unsuspecting consumers became addicted to these narcotics, while huge profits were created for the company. The mastermind of the plan, Doihara, was later prosecuted and convicted for war crimes before the International Military Tribunal for

1269-547: The creation in 1878, of Osaka Shosen Kaisha (OSK), which was merged with Mitsui Steamship in 1964, to become Mitsui OSK Lines (MOL), which became one of the largest ocean shipping groups in the world. When the United Kingdom withdrew from the gold standard in 1931, during the height of the Great Depression , Mitsui Bank and Mitsui & Co. were found to have speculated around the transaction. This raised

1316-407: The customer's house (typically a person of high social class or who was successful in business), an order taken, then fulfilled. The system of accountancy was called "margin transaction". Mitsui changed this by producing products first, then selling them directly at his shop for cash. This was then an unfamiliar mode of operation in Japan. Even as the shop began providing dry goods to the government of

1363-517: The early period was drapery, finance, and trade, the first two being the businesses it inherited from the Tokugawa Era. It entered into mining when it acquired a mine as collateral from a loan it had made, partly because it could buy a mine cheaply from the government, Mitsui then diversified to become the biggest business in pre-war Japan. The diversification was mainly into related fields to take advantage of accumulated capabilities; for instance,

1410-644: 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 Japanese 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

1457-512: The family shop, Echigoya. He opened a new branch in 1673; a large gofukuya ( kimono shop) in Nihonbashi , a district in the heart of Edo. The genesis of Mitsui's business was in the Enpō era, which was a nengō meaning "Prolonged Wealth". In time, the gofukuya division separated from Mitsui, and became Mitsukoshi . Traditionally, gofukuyas provided products made to order; a visit was made to

Mitsui - Misplaced Pages Continue

1504-401: The group include Mitsui & Co. ( general trading company ), Sumitomo Mitsui Banking Corporation , Nippon Paper Industries , Pokka Sapporo Holdings , Toray Industries , Mitsui Chemicals , Isetan Mitsukoshi Holdings , Sumitomo Mitsui Trust Holdings , Mitsui Engineering & Shipbuilding , Mitsui O.S.K. Lines and Mitsui Fudosan . Founded by Mitsui Takatoshi (1622–1694), who

1551-642: The group, declined in size due to the collapse of the Imperial Bank after the war, which resulted in reduced cohesion of the conglomerate. Many companies that were once part of the Mitsui Group have become independent or tied to other conglomerates. Specifically, Toshiba , Toyota Motors , and Suntory , once part of the Mitsui Group, became independent, with the Toyota Group becoming a conglomerate in its own right. In 2000, Mitsui Pharmaceuticals

1598-667: The heart of economic and industrial activity within the Empire of Japan since Japanese industrialization accelerated during the Meiji Era . They held great influence over Japanese national and foreign policies which only increased following the Japanese victories in the Russo-Japanese War of 1904–1905 and World War I . During the inter-war period the zaibatsu aided Japanese militarism and benefited from their conquest of East Asia by receiving lucrative contracts. After

1645-624: The import of industrial products and weaponry. Masuda negotiated with the Ministry of Industry to acquire ownership of the Miike coal mines at very favorable prices when the government decided to divest itself of industries. This became the subsidiary company, Mitsui Mining Company , in 1889, with Dan Takuma as president. This company became the core of the producing sector of the Mitsui Trading Company as well as its expansion in

1692-610: The parent company. Major suppliers form the second tier beneath the parent, and smaller manufacturing companies make up the third and fourth tiers. Those at the highest levels are most profitable, and most insulated from fluctuations in the market. Some vertical keiretsu may belong to one or another horizontal keiretsu . Some vertical keiretsu are family businesses , such as the Hitotsubashi/Shogakukan , Otowa/Kodansha and APA groups. Studies have found these vertical keiretsus, particularly those that belong to

1739-542: The same horizontal keiretsu , are more likely to form alliances than the other types or even those companies where one or two have keiretsu affiliations. Vertical keiretsu is considered an effective and competitive organizational model in the car industry. During the occupation of Japan , under the Supreme Commander of the Allied Powers , General Douglas MacArthur , a partially successful attempt

1786-427: The shares in each other's companies, centered on a core bank; this system helps insulate each company from stock market fluctuations and takeover attempts, thus enabling long-term planning in projects. The prototypical keiretsu appeared during the Japanese economic miracle which followed World War II, amid the dissolution of family-controlled vertical monopolies called zaibatsu . The zaibatsu had been at

1833-495: The trading company entered into chemicals to attain forward integration. On July 1, 1876, Mitsui Bank, Japan's first private bank, was founded with Takashi Masuda (1848–1938) as its president. Mitsui Bank, which following a merger with Taiyō-Kobe Bank in the mid-1980s became part of Sakura Bank , survives as part of the Sumitomo Mitsui Banking Corporation . During the early 20th century, Mitsui

1880-666: The value in the Japanese stock market consisted of cross-shareholdings. Since then, banks have gradually reduced their cross-shareholdings. The Japanese corporate governance code, effective from June 2015, requires listed companies to disclose a rationale for their cross-shareholdings. Partly as a result of this requirement, the four Japanese "megabanks" descended from the six major keiretsu banks (namely Mitsubishi UFJ Financial Group , Sumitomo Mitsui Financial Group , Sumitomo Mitsui Trust Group and Mizuho Financial Group ) have indicated plans to further reduce their balance of cross-shareholding investments. Membership in horizontal keiretsu

1927-592: Was a Japanese industrialist, investor, and art collector. He was a prominent entrepreneur in Meiji , Taishō and early Shōwa period Japan , responsible for transforming Mitsui into a zaibatsu through the creation of a general trading company , Mitsui Bussan . He also established a newspaper, the Chugai Shōgyō Shimpō ( 中外商業新報 ) , which was later renamed the Nihon Keizai Shimbun . Masuda

Mitsui - Misplaced Pages Continue

1974-769: Was acquired by the German Schering AG from Berlin . Ishikawajima-Harima Heavy Industries ( IHI Corporation ) is now considered to be part of the Mizuho Group , and many companies in the Sumitomo Mitsui Financial Group are more closely tied to the Sumitomo Group than the Mitsui Group. As of 2021 there were signs that Mitsubishi UFJ Financial Group and the Mitsubishi Group could be taking over other parts of

2021-490: Was born on Sado Island , in what is now Niigata Prefecture . His father was an official in the Tokugawa shogunate , serving as Hakodate bugyō . Masuda's ancestors have been - for generations - employed at Sado Magistrate's Office. Masuda's father became Hakodate bugyō, serving as a representative of the central government to the regional magistrate office. His position involved dealing with foreigners and foreign trade as

2068-820: Was inspired by Western culture so, upon his return home, he studied English at the Hepburn School (the forerunner of Meiji Gakuin University ). In 1871, after the Meiji restoration , Masuda obtained a job at the Ministry of Finance through his personal connections with Inoue Kaoru . Masuda’s younger sister, Nagai Shigeko , accompanied Tsuda Ume to the United States in November 1871, and along with Tsuda, would devoted her life to furthering education for women in Japan. He later served as Master of

2115-473: 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

2162-487: Was one of the largest zaibatsu , operating in numerous fields. Mitsui Bank became the holding company of the Mitsui zaibatsu from 1876. It was joined as an ultimate parent company by Mitsui & Co. and Mitsui Mining in 1900, with various industrial concerns owned by various combinations of these companies and their subsidiaries. Likewise, Mitsui invested in maritime transportation to support its trading activities as well as invest in passenger transportation, first with

2209-595: Was the fourth son of a shopkeeper in Matsusaka , in what became Mie prefecture . From his shop, called Echigoya (越後屋), Mitsui Takatoshi's father originally sold miso and ran a pawn shop business. The family would later open a second shop in Edo (modern Tokyo ). Takatoshi moved to Edo when he was 14 years old, and later his older brother joined him. Sent back to Matsusaka by his brother, Takatoshi waited for 24 years until his older brother died before he could take over

#375624