JPRS ID: 10125 JAPAN REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000400070040-6
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 58
• Document Creation Date: November 1, 2016
• Sequence Number: 40
• Content Type: REPORTS

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JPRS L/10125
1 S November 1981
Ja an Report
p
_ (FOUO 65/81)
~g~$ FAREIGN gROADCAST I NFORMATION SERVICE
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NOTE
3PP.S pu~li.c2ti~ns contain information primarilg from foreign
- newspapers, period.icals aad books, but also from news agency
transmissions and broadcasts. Materials from foreign-language
sources are translated; those from English-language sources
are transcribed or reprinted, with the original phrasing and
other characteristics retained.
_ Headlines, editorial reports, and material enclosed in brackets
are supplied by JPRS. Processing indicators such as [Text]
- or [Excerpt] in the first line of each item, or following the
last line of a brief, indicate how the original information was
p*ocessed. Where no processing indicator is given, the infor-
mation was summarized or extracted.
'Jnfamiliar names rendered phonetically or transliterated are
enclosed in parentheses. Words or names preceded by a ques-
tion mark and enclosed in parentheses were not clear in the
original bLt have been supplied as appropriate in context.
Other unattributed parenthetical notes within the body of an
item originace wirii the source. Times within items are as
~iven by source.
The content~ of th.is publication in no way represent the poli-
. cies, views or attitudes of the U.S. Government.
COPYRIGHT LAWS AND REGULATIONS GOVERNING OWNE~SHIP OF
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JPRS L/10125
18 November 1981
JAPAN REPORT
(FOUO 65/81~
CONTENTS
POLITICAL AND SOCIOLOGICAL
Despite In3ictmcnt, Tanaka Strengthena Influence
(Teuro Tsuteumi; THE JAPAN ECONOMIC JOURNAL, 3 Nov 81)........ 1
' Komoto's Strategy for Rising to Top Analyzed
(Michisada Hirose; ASAHI EVENING NEWS, 22 Oct 81) 3
Chief Cabinet Secretary Miyazawa's Position Evaluted
(K~en Ando; MAINIQiI DAILY NEWS, 23 Oct 81) S
JSP Faces More Affluent Society, Publishes Revised Manifesto
- (Editorial; THE DAILY YOMEURI, 24 Oct 81) 8
N akasone Troubled Over Establishment of 'Policy Group'
(Raisuke Honda; THF DAILY YDMIURI, 23 Oct 81) 10
~
Arafat's Visit Caused Big Headaches for Kimura
(Takehiko Takahasi; MAINICHI DAILY NEWS, 28 Oct 81)............ 11
Popular Support for Pri~ne Mtnister Reported
~ (Minoru Shimizu; THE JAPA~I1 TIMES, 29 Oct 81) 13
ECONOMIC
Postal Savings Policy Dispute Settled
(Various sources, 19, 30 Sep 81) 15
Roundtable Discussion of Issues
Settlemerit Within IDF
Editorial Comment
SCIENCE AND TECHNOL~Y
U.S.-J~pan Military Technology Cooperation Examined
- (SHUKAN ORU TOSHI, 4 Sep 81) 24
- a - [III - ASIA - 111 FOUO]
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MITI To Launch 7-Year Pro~ect To Develop Intelligent RQbot
(Various sources, various dates) 31
Uses in Nuclear Field
Help in Improving Productivity
Leadi_ng Robot Technology
10-Year Project for FYfth-Generc.tion Compi~ter Announ~.ed
(NIKKEI SANGYO SHII~IJN , 9 Sep 81) 35
Associative, Learning Functions
Coope ration With Fore i gn Countries
Drive for High Te chnology at Mitsubishi ~lectric Discussed
(SHiJKAN ORU TOSHI, Aug 81) 38
VISI Technology CMOS Gate Array Developed by Toshiba
(NTKICAN KOGYO SHIMSUN, 8 Nov 81) 44
Future of Plant Export Industry Diacussed
(Fumihiko Matsuda; NIH ON KOGYO SHIMBUN, variaus dates)......... 46
- b -
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POLITICAL AND SOCIOLOGICAL
DESPTTE IDTDICTMENT, TANAKA STRENGTHENS INFLUENCE
Tokyo THE JAPAN ECONOMIC JOU1tNAL in English 3 Nov 81 p 8
["Political Scene" column by Teuro Tsutsumi: "Tanaka Builds Up Power Des pite
Trial
~Text~
It is a wonder why former Ptime Minist~r Why are so many LDP Dietmen cvshing
Kakuei Tanaka, a defendant indicted for al� into the Tanaka camp? The anwer may be
- legedly receiving ~f500 million in bribes in found partly in a survey conducted by a
~ the L~ockheed payoff trial, can still malntain weekly magazine wtach inteviewed them.
or even strerigthen his influence in Japanese Firstly, the survey said that for most of
politics. Tanaka's men, the greatest source ~f his
In the trial, lawyers for defenclant Tanaka ma~netism is l~is aggressiveness, which
poured out one piece of "evidence" after ao- brought him to the highest post of premier
other to substantiate the clalm that he di~ wi:hout the help of education and inherited
not receive the m~ney, but "evidence" has wealth in a country where social success is
been seriously questioned by the pcosecufors' rn~re or less resen~ed for people with a col-
rebuttals. SE;eculation is circulating these leae degree. Secondiy, others said Tanaka is
days that there is a strong passibility that "a man of compassion and very humane and
T~naka will be p:oven guilty in the ruling of warm-hearted." 'I~vo prospective candidates
the Tokyo Pistrict Court late next year. to the premiership within the Tanaka faction,
On the other hand, in the expected resh�Sf- former Finance Minister hoboru Takeshita
fle of the Suzulci Cabinet and the LDP leader- and former Defense Ag~ncy Director-Gen-
ship at the en~ of November, LDP Executive eral Ganri Yamashita, are also said to be
Council Chairman Susumu Nikaido, "men of compassion" equal to Tanaka, their
Tanaka's closest associate, is likely to be ap~ mentor. All this substantiates the reputation
pc>inted to the key post of LDP secretary- that "the Tanaka factior. is extremely good
general. Thus, when congronted with this in taking care of its members" and proves
grim prospect of a"guilty" ruling and the that there is "a stroag boad, similiar to the
expected Nikaido appointment, everybody one in a famlly, between the faction cnem-
just wonders why Tanaka is as powerful as bers and Tanaka as the ceater."
ever and his influence has never lessened. For example, take the case of a junior Diet-
At present, out of LDP's 421 Dietmen, man, who receives a petition from his c~~
more than 100 belong to the Tac~?ka facdoa sdtuency for building a bridge or two and
Those who did not belong to any faction be- paving road. T'he novice Dietman may be in
fore have rushed to the Tanaka camp in the seriuus trouble because he does not know the
past 12 months. Tanaka himself boasts that knack of penetrating ihe bureaucracy. But it
"more than 150" Dietr~en belong to his fac- will be marvellous i~ se~ior members of his
tion if "pro-Tanaka men are included." This faction render a helping hand to talk to the
is an astounding figure when compared with Construction Ministry and meet the expe~ta-
its factional strength of 70-80 men four years tions of his corrstituency. Here in this aspect
ago when Tanaka was arrested on charges of ~ mutual trelp among faction members, the
_ taking bribes.
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Tanaka taction is the strangest among all stitute a bas~s tor bnoery - a~ 1egaI conten-
factians of the LDP. And it is no doubt th~t tion which could be interpreted in many
behind this mutual help lies the fact that ways. This is why ashate observers say that
there are many "pro-Tanaka afficials" with- tl~re will be "no big repercussion to the
in the Ministries of Finance, Internaiional Tanaka camp even if Tanaka is proven guilty
Trad~& Industry, and Poets and Telecom- in the Cust trial."
munications, being built up ovei the years by Thus, the key issue to the focthcoaning
Tanaka himself, w~ho are very iastrumeatal party leadership reshuffle is whether Prime
in meeting requesta from factioa members. Minister Zenko Suzuki will appoint Nilcaido
Even if this is the case, one juat wonders iE a~ j,pp S~~y.g~eral as expected amid
- the situation might aot tiu~n against Taaaka i~reasing streagth of the Tanaka faction
:f he is fo~md guilty in the Tokyo Diatr(ct withiu the LDP, and the ras
Court trial. But in Ja n the "three instance P P~~s~.for a
s tem" is ado ted anand the trial could ~ling in the Lockheed trial. The a~
YS P 80 ~ pointment will be a matter of keen concern to
to the Tokyo High Court and the Supreme judge whether Prime Minister Suzuki will
Court after the ruling is made i~n the Tokyo accepi the power of the Tanaka faction or
Diatrict Caut. Nobody Imows what will ha~ keep a disteuce from Tanaka in the [uture.
pen to the outcome of the trial ii the Tanaka
camp has decided to bring up an issne that (Teruo Tsutaumi is a Nihon Keizai deputy
~500 million was not a brlbe, but a po political editor.)
litica! donation ~and tKerefoie'doed' not 'coi~ '
COP'YRIGHT: 1981 The Nihon Keizai Shimbuasha, Inc.
CSO: 4120/46
2
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POLITICAL AND SOCIOLOGICAL
KOMOTO'S STRATEGY FOR RISING TO TOP ANALYZED
Tokyo ASAHI EVEPIING NEWS in English 22 Oct 81 p 2
~"Politics and Politicians" column by Michisada Hirose: "Komoto's Strategy for
Rising to Top Analyzed"]
~Text~
The strategy of Toyhio Ko- June last year and the alli-
moto, director-general of the ance of the three "main-line
Economic Planning Agency, conservative" factions-head-
for risirig to the top when ed by Suzuki and former
Prime Ministet Zenko Suzuki Prime Ministers Kakuei T3-
step; down remains vague. naka a,d Takeo Fukuda-
This is partly due to the na- .-which was formed aftor
- ture of the man: Kom~to Ohira s demise destroyed the
- takes a cautious approach to basic assumptior~ of Ka
everything. But more impor- moto's strategy.
tant reason is that the situa- With the support of the
tion within the ruling Liberal- group led by Yasuhiro Naka-
Democratic Party is unfavura- sone, director-general of the
ble for him, and he cannot Administrative Managemept
work out an. effective strategy. Agency, the three "main-line"
How dces he propose to act factions have virtually abol-
in connection with the reshuf- ished the sy~tem of presiden-
fle of the Cabiaet and the tial primary elections. (They
LDP executive liueup, which made a new ruie under which
is to be made after the cur- primary elections will not be
rent Diet session eads? held when three or fewer peo-
' In the spring .of last year, pie run for the presidency. Ia
Y.omoto and his aidea had a reality, it is inconceivable for
clear strategy for sweep- there to be four or more can-
ing into power and were car- didates.)
rying it out on a nationwide Primaries are supposed to
scale. T6e strategy called for be followed by an election in
recruiting pro-Komoto oeople which only the LDP members
into the ruling parry. Wit6 of both Houses of the Diet
their votes, Komoto was to can vote, but it would be ex-
win by a large margin in LDP tremely difficult for Komoto
presidential primary elections, to win such an election since
in which tlie party rank aad his faction is the smallest of
file are eligible to vote. t6e five majbr LDP factions.
At that time, t6e LDP The Komoto faction's 43 Diet
membership increa~ed to 2.5 members cempare with the
million, of whom 0.7 to 0.8 Tanaka faction's 104, the
miliidule, a~~1:~::~ific,ic~~~n-~trucCure infartuntion bn:~e trn~dnl~~ :~iu1 r~~i ~~ti. 'Cl~r
structurarch machine using VHS format, which w~as heretofore considered difficult
to achieve. Video disks, which are considered to follow the steps of VTR, are
being developed now. In the field of television, the sales of giant-screen color
TV "Auroravision" have be~n steady to the owners of ball parks and advertisement
towers.
In addition, in tl~e field of automotive parts, emphasis is placed on the electron-
a.t-j.cation of the automobile, including a tri~ computer and an electronic fuel in-
jection device. In the field of robots, production of arc-welding robots, which
is expected to grow 30-40 percent in the future, began in August at the rate of
41
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30 units a month. It is hoped that 20 perceat of the market share can he secured
by 1985.
The sequencer, cohich is handled by the machine business department, is also grow-
ing at the brisk pace of 30-40 per.cent a year, thanks to the movement toward ra-
tionalization and labor-saving. The K-series which was put on the market in 1980
'las been movin~; smoothly. Rc~moval of humans from production lines is being pro-
moted by these labor-savin~; and rationalizing machines. At its Himeji plant,
eight production 1i_nes have been completely taken over. by machines.
Mitsubisl~i's tE.'C~1I1:1_C31 potential will bl.ossom during the process of consolidating
its strongly el.ectronic-oriented system. The strength of Mitsubishi's technical
power can be appreciated from the value placed on it by U.S. Westinghouse, which
has maintained a tectinical tie with it. The coalition between Mitsubishi and
_ Westingho~ise has lasted cnore than half a century, since 1923, and the tie is very
strong. In the beginning, the contract was one of technical assistance. In 1966,
it became a contract of technical exchange, and the exchange has continued since
then on the basis of equal partnership.
The contract agr.eement revised this year has expanded the range of cooperation
into operational management, or overall cooperation. This speaks clearly of the
increased esteem Ldestinghouse has for Mitsubishi. Over the past several years,
the top management personnel of Westinghouse have visited Japan one after another,
_ showing their interest in overall operation and management, including labor manage-
ment and production management. On the technical side, technical exports by Mitsu-
- bishi are increasing in number, and in some departments the situation has been cam-
pletely turned around.
Neverttieless, there are stili many problems to be overcome before Mitsubishi can
join the ranks of real international enterprises. Aside from the products, the
most urgent requirement is the improvement of financial affairs. Being far behind
IIitactii and Toshiba financiall.y., Mitsubishi must also positively develop a finan-
cial affairs stra~egy. In Sept~~mber this year, $100 million in Eurodollar con-
vertible bonds wi1.1 be issued, and domestically, a chance for increasing capita?
from piiblic subscripti.on may also arise.
As Mitsubistii Heavy Industry Sees It
Mitsubishi Electric, whicl~ was launched from the electric plant of Nagasaki Ship-
yard, remains a"subsidiary company" of Mitsubishi Heavy Industry. The tie is
strocig because of the blood relation, but on the other hand, mutual repulsion re-
semblitig hatred of a close relative is also strongly felt.
l~or example, the manufacture of a power generating station is heing carried out
cooperatively, wi~h the Heavy Indus~ry responsible for the boiler and the turbine,
while the Electric is responsible for the generator; the Heavy Industry is the
main contractor and ttie Electric is the subcontractor. From the viewpoint of the
tectini.cal. camp of the Heavy Industry, the difficulties encAUntered in connecting
. the t~irt~ine and the generator and Che high cost of the generator are always a
source of dissarisfaction.
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()n tlie other hand, the Electric as a subcontractor complains of "hidding low in
order to secure an export item and putting tfie blame on us." It is an old story
by now, but the rivalry between these two companies surfaced around the Mitsubishi
Nuclear Power Industry, which was positioned as +tfie nucleus for the development
and production of a nuclear power plant. To the Heavy Industry, which is eager
to push for construction of a practical production system, the Electric, which
emphasized research and development, was always a pain in the neck. The strained
relationship between the two companies is said to have lasted until the Heavy
Industry shouldered the responsibility for the cumulative losses of the Nuclear
Power Industry and the industry was reorganized into a unified company under the
leadership of the Heavy Industry.
These two companies also collided head-on in matters related to missiles, which
comprise the frontline of the weapons department. More recently, they fought
over the position of main contractor for the licensed production of the A-M9L
which is carried on board the F-15, and the Heavy Industry was the final victor.
The Electric used to be in charge of missiles of this series, so the recent coup
is considered by the Heavy Industry as reestablishing itself as the rightful sys-
tem organizer.
COPYRIGIiT: Shukan Oru Toshi 1981
9113
CSO: 4105/259
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SCIENCE AND ~~CHNOLOGY
VLSI TECHNOLOGY CMOS GATE ARRAY DEVELOPED BY TOSHIBA
~rokyo NIKKAN KOGYO SHIMBUN in Japanese 8 Nov $1 p 14
[Text] Toshiba Corporation (president, Shoichi Saha) announced on the lOth that it
had developed the technology for the world's fastest gate array (semi.custom LSI)
using CMOS construction. This technology, along witk? the company's other technology,
makes possible 6,00~ gate number, 2 micron des:tgn line width, and 1.5 nanosecond
propagation delay time, which represents the world's highest level in high degree
of integration and high speed. The company plans to improve the reliability of
this technology and to devel.op mass production technology so that it can market the
product starting in 1982. Regarding gate arrays, Toshiba will be the third to enter
the market, following Fujitsu and Oki Electric, while Hitachi is planning to enter
the market soon. Thus, there has been a sudden burst of activity in the gate array
market.
In the past, the special logic circuits used in computers, ME equipment, measuring
equipment and communications equipment were TTL or ECL type, consisting of a com-
bination of a number of high-speed bipolar IC's but recently miniaturization, light-
ness in weight, and low power consumption have beco~ne greatly desired properties in
such equipment, and there has been a demand for special LSI which can conform to
these needs. On the other hand, special LSI are expensive to develop, and the pro-
duction involves many problems, one of which is sma11 volume production with asso-
ciated high un~.t cost.
Attention has been directed to gate array as the solution to this problem, and this
is a product which can be pr~duced in a fairly short time in fairly large-scale mass
- production and at low cost. Gate array includes, aside from CMOS, the TTL which is
based on bipolar IC technology.
Toshiba has an abundant technological record where CMOS is concerned. It focused
attention on the development of CMOS characterized by small power consumption and
high degree of in'cegration, using its own CMOS technology and super LSI technology
to develop a CMOS gate array with a high-speed operation rivaling that of the TTL.
'11~e prodticts which Toshiba developed and test produced are five types of high-speed
VLSI using 2-3 micron finely finished and two-metal layer distribution line technology
_ with gate numbers between 880 and 6,000. This company already has produced high
pressure resistant LSI with gate number 400 for intracompany use, and this present
development has filled out this product group.
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The high speed gate array was realized thxough 3-micron very fine finish technology
and two-r,?etal layer distribution lines, to make ~assible 2.5 nanosecond prQpagation
delay time per internal gate wiCh the same level operating speed as the advanced low
power Schottky TTL.
- The super high speed gate array incorporates 2-micron very fine finish technology
~nd aluminum two-layer distribution lines, to enable a propagation delay time of 1.5
nanoseconds, the same level as the high sp~eed Schottky TTL.
COPYRIGHT: Nikkan Kogyo Shimbunsha 1981
2267
CSO: 8129/45
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SCIENCE AND 'TECHNOLOGY
FUTURE OF PLANT EXPORT INDUSTRY DISCUSSED
- Tokyo NIHON KOGYO SHIMBUN in ;Japanese 6, 7, 8, 10 Jul 81
[Article by reporter Fumihiko Matsuda]
[6 Jul 81 p 7~
[TextJ Japan's plant export industry is about to face a turning point. Plant ex-
ports, which broke the $10 billion mark, reaching $12.9 billion in FY-79, showed a
recession in FY-80, tumbl3ng down to the 1968 level of $8.8 billion. Plant ex-
ports were dubbed "exports without friction" and it was hoped they would be the
most promising export commodities of the 80's, but they were curbed in the wake of
the Iran-Iraq war and by suspension of construction of the large plants bound for
China. In addition, international political and social changes such as the eco-
nomic sanctions against the SovieC Union affected these exports. Meanwhile, Ja-
pan's plant industry, in rhe midst of the severe plant export conditions, has
started to reverse its gray picture led by the three major engineering corpora-
tions. Changes have resulted due to advancements into new fields through develop-
ment of new technologies around the axes of the reviewing of economic strategy,
reinforcemenr of the economic camp, change of generations, energy conservation
and energy substitution. Now, let us look into the future trend of plant exports
and the destination of this industry in pursuit of a new direction in the midst
- of the transition period.
Inheritance of Human Resources
"We lost our foremost attraction, Akiyoshi Tamaki, but I am encouraged to inherit
the human res~urces raised on the command of the former president," said President
Masakazu Tamaki, who became the new president of Chiyoda Chemical Engineering ~
Construction, the top firm of the plant industry, after the sudden death of the
former president, at a press interview on the 2d of this month, exactly 1 month
after he took over the office of president.
- The former president, the late Akiyoshi Tamaki, was an excellent manager who broke
away from Mitsubishi Oil, e~`ablished Chiyoda Chemical Engineering & Construction
soon after the war, and raised it into a top world engineering firm. He was also
the commonly acknawledged top leader and a pioneer in Japan's plant engineering
industry. The shock of the loss of this gigantic star of the industry was felt
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Fou oFFic~,ai. usF: o~ri.v
keenly, but at the same time, it may be considered to be an incident that symbol-
izes the plant industry at a turning point.
The death of the former president (also chairman) brought a change of generations
to Cl~iyoda Chemical Engineering & Construction, but signs of change have been vis-
ible for tt~e last f.ew years. It was in June 1979 that the company adopted a col-
lec tive operation system under executive council. "Since the president ran a one-
man show, it is questionable that a collective operation system was always at
work" (President Masakazu Tamalci). However, the rails were already laid, and the
chan~,e of ~;enerations, including those in affiliated companies, will be further
speeded up under the new president.
Cha 11~nKe by Dividing Responsibilities
These ptienomena are commonly seen in the three plant engineering companies. For
example, in Japan Gasoline, President Yoshio Suzuki has moved up to become chair-
man. The bilateral structure with Chairman Suzuki and President Haruo Shinoda
started in June last year. "A two-headed structure with two top leaders to
strengthen nanagement (Chairman Suzuki) is viewed by some in the industry as
"tt~e cloister government of Chairman Suzuki," but it is a fact that the rights of
man agement were divided. Especially in view of the fact that Chairman Suzuki's
key posts as a doyen of the industry are expected to increase--he was recently
ass igned to the office of director of the Engineering Promotion Association suc-
ceedinb the late Akiyoshi Tamaki and also to serve as chairman of the "81 Chemical
Plant Show" to be held at Harumi this autumn--it appears that the lineup will be:
Chairman Suzuki for activities related to the plant engineering industry and Presi-
den t Shinoda for activities within the company. Toyo Engineering, the youngest
of the three companies specializing in plant engineering, celebrated the 20th
ann:.versary of its establistiment in May this year. Although the company is still
behind ttie rwo ~eadrrs, Ghiyoda and Japan Gasoline, in sales and in construction
ord ers received, Toyo Engineering is planning to challenge once again: "We have
corisolidated our foundation to leap from TCE that manufactured fertilizers to the
wori~l's top comprehensive engineering firm" (Presidenr Masayoshi Naito). In man-
agement, a system to divide the responsibilities among three vice presidents,
Fujimoto, Cho and Sakurai, has been incorporated, and new strategies are being
launched une after anor.her to consolidate its position as one of the "big three"
in the background of the new "listed" status and the lOth anniversary.
Mitsubist~i Heavy Industries and Kawasaki Heavy Industries, the two companies which
pl.ay an important role as comprehensive hardware oriented makers in the plant in-
dus~rv other than thc three specialized companies, also concurrently celebrated
th e~ncs~ption of a new president and realized the change of generations at the end
of .1une this year. in ti~~ case of Mitsubishi Heavy Industries, it is thinking of
brealci.ng away from its role as a conventional hardware maker to a comprehensive
plant engineering business including software, with the Chemical Plant Engineer-
- ing Center (MCEC) serving as an axis. The company is delaying the policy change
partially as a result of the dire~t damage received by the cancellation of proj-
E~cr~ in connection with t.I1P_ Iran-Iraq war and the suspension of plant construc-
tion in China.
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Reevaluati.un of Domesti.c MarkeC
Kawasaki Heavy industries is a similar case. Kawasaki, which was promoting work.
to construct a ceMent plan[ in Iraq, has now been forced to hold it up for a while,
and its plant business balance has been severely damaged.
Zn reaction, criticisms have been heard within the company: "Our simplistic atti-
- tude o� loolcing for overseas markets because of the difficulty in securing domes-
tic orders was a Factor which contributed to the problem." It is said that the
' company is now focusing on reevaluating the order securing system.
This situation is not exclusive to Kawasaki HEavy Industries. The opinion that
"overseas cnarkets are risky and domestic market reevaluation is necessary is about
- to become mainstream thinking, although risk preventive measures are improvised
based upon the increase in risk in the overseas country. For instance, both Chi-
- yoda and Japan Gasoline, which used to claim an overseas construction order ratio
- of over 80 percent, revealed a decline to 60 percent in FY-80. Conversely, domes-
tic constructions increased. With confidence restored by these results, it is a
natural consequence that each company has begun to put more energy into securing
domestic work orders. It is not that we think lightly of overseas opportunities,
but the r~~tio of overseas and domestic orders should ideally be half and half for
the stability of the business operation" is the perception commonly shared by the
leaders of. the industry. Compared to the attitude of the plant industry prevail-
ing in the past, which worshiped only the overseas markets, the new posture is a
180-degree turn. Thanks to tt?e change of generations, the operational transition
of each maker i~; progressing steadily.
[ 7 Tul 81 E~ 7]
[TextJ Revitalized Activi+~ies cf Consortium
The recently presented "FY-81 Commerce White Paper" emphatically calls for organiz-
ing aci '�internati~nal consor.r.ii~m (,international business partnership) as a means
to expand plant ex{~orts: "Due to the occurrence of situations where international
- armed conflicte ancl the change iu internal policies threaten to uproot plant con-
struction, there ~mer.~es tendency for firms of one nation to hesitate to accept
orders for larg~ plant from other natl.ons. In this perspective, the necessity
L~r an internati.onal consortium is increasing so that the liability for risks can
be diffused, merits of pu~~lic aid from each nation can be utilized, fund procure-
ment ability and technologicaJ_ ability can be mutually furnished and perfected,
and cost reducLions can be realized by procuring part of the plant supplies from
a ttiird power." without the necessity to be pointed out in the Commerce White
_ Pr.~per, many ex~mples can be seen pertaini.ng to achievements and bids submitted by
companies whicl~ f~rmed a cansortium with European and American reputable plant
engineerin~; firms in responsc to :Cnternational tenders for large projects overseas.
Nevertheless, international consortiums previously were organized more for reasons
of stra~egies Eor securing orders and insuring work volumes, whereas the recent
consortiums entered into by Japanese firms have different purposes: "The interna-
tional_ consortLum is indispensable from the aspects of facing country risks and
of finances" (Chiyoda Chemical Eng3.neering & Construction, Toyo Engineering).
'I'hat adds up to tlie arr.ival of a genuine international consortium era.
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Duel of t}ic Largest Consortiums in History
In fact, some even say that almost all of the large projects scheduled to be bid
upon this year and next year will be subjected to competition for orders to be
received umong the international consortiums themselves.
For instance, business negotiations relating to the Nigeria LNG plant (annual pro-
duction 20 million tons), which draws attention as the largest LNG plant project
of this century calling for a total cost of 1 trillion yen (including LNG vessels),
_ will scon enter the stage of a scramble for securing orders among the three indus-
trial consortiums which passed the preliminary examination: 1) Chiyoda Chemical
Bngineering & CcnStruction-Rumas [phonetic] (America), 2) Japan Gasoline-Kellogg
(America)-Daelim Industrial (Korea), and 3) SNAM (Italy)-Foster Wheeler (same).
The final bout of the international consortiums, the greatest. of its kind in his-
tory, is temporarily held up because the bidding has been postponed to next spring,
but the consortium era has arrived, not only in Japan but in the world. Also, for
business talks rel.ating to the Malaysian large fertilizer plant of the ASEAN No 2
project scheduled to be offered for international bidding, international consor-
tiums were formed in advance to be ready for the submission of bids, which is
rather rare for a fertilizer plant. In accordance with this system, the partici-
pation of five consortiums featuring Japanese firms is expected after the prelim-
inary examinations: 1) Toyo Engineering-Mitsui Toatsu Chemicals-Kellogg (America),
2) Mitsubishi Heavy Industry-C. Itoh-Sunamu [phonetic] (ILaly), 3) Kobe Steel-
Nichime;: Friedrich Uhde (West Germany), 4) Hitachi Shipbuilding & Engineering-
Humphly Glasgow (England), 5) Chiyoda Chemical Engineering & Construction-
Mitsubishi Corporation. As the ASEAN project will be implemented by borrowing
yen from Japan, Japanese firms by themselves could properly bid and win without
any problem. However, even the bidding on this project is said to be attend:d by
international consortiums.
Also, in regard to the Indonesian LNG plant (total sum 150 billion yen), an order
which was successfully obtained recently by a Mitsubishi group consortium--Chiyoda
Chemical Engineering & Construction-Mitsubishi Heavy Industries-Mitsubis2?i Corp-
oration--ended up, strange to say, as a case where the project was subcontracted
- to a local subsidiary of Bechtel of America which has gained experience in build-
- ing plants in Indonesia. A complex international consortium system beyond ca~ital
affiliations is about to be forged.
Internatio~lal Procurement of Machinery and Equipment
Tlie intcrnational consortium system as described above has become common sense in
the business world. On the other hand, it is ttie Japan Machinery Exporters' Asso-
ciation (director, Ichiro Terano) thaC is active in advocating "International
Exct~~ange for Plants" under the flag of "frictionless trade" paying heed *_o the
international trade frictions endemic in automobile exports, from the standpoint
of ~IltE~rnational industrial cooperation and procnotion by the private sector.
ThiS includes the holding of regular conferences for exchange of technologies in
re~ard to cooperation for "plant exports to Third World nations" with European
I11L"1O11S such as West Germany, Italy, Belgium, France and the Netherla.nds, and
mnderateiv advanced nations such as Brazil and Korea. "The European business
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F'ON nFF1C'!.Al. l!S!? ONt,I'
world and i~ations are ].ooking forward to cooperation with Japan in plant exports
to Third LJorld nations . .T~i[)3I1 will also profit greatly from financial deals such
as t}-ee conclusion af the joint insurance agreement" (executive office of the Japan
Machinery Expurcer's Association). It is lioped that the service window exchange
among groups of companies iaill advance to the level of exchange among the member
firms.
Meanwhile, the movement t~ "strengthen the international procurement of plant ma-
chinery and equipment in uni.son with the iormation of international consortiums"
(Fresi_dent Masayoshi Nai.to, Toyo Engineering) also attracts attention:. ~n the
� overseas projects, employment of foreign labor has become a general practice, and
following the patterns of human resources, material procurement is also multi-
nationalized. With this trend in mind, the following point of view is expressed:
"The recession in plani exports is only statistical. Statistics do not include
cases of business contracted for cost plus fee and cases of overseas procurement.
Plant exports are r~ot nece~sarily in a recession" (Executive Director Hiromi Goto,
Chiyoda Ctiemical Engir~eerin~; & Construction). Conversely, the consortium system
contains an aspecr. iri WtilCll Cl1e export of plant machinery can be anticipated even
if Japan is defeatt:d in inlernational biddings. The order for the modernization
pr.oject f:or two oil. refineries planned by Pertamina of Indonesia was given to two
American conipanies, Bechtel and Floor [phonetic] over Japanese companies, but it
is said that "one-tllird oF the plant machinexy and equipment will be procuren
from Japan," and n~-~chiue malcers have alxeady received orders.
1~Ihile. the wave5 oi inter.national.ization reach the shore led by international con-
sortiums, a"new intt_rn.aCionalizatiun era" has arrived when Japan's plant business
i.s quesr_ionin~ whethPi� or not it can survive as a world plant maker a�ter it has
deviated From the. road ot international competition and has selected international
r_oogeration.
[ 8 Jul ~il 8 ]
[Text ] Relaxanl oL Intern~~tional ~rj.cLion
In order for .Japan's plant industry to survive, in the unanimous opinion of the
- le.aders of both specia:llzed and nonspecia].ized c~mpanies in this industry, techno-
logical ability (inr_.liiding technological development and research and development)
is the d~cisive and in~v~.tab:le factur in winning the competition, much more than
the reinforcement of international competitive power. MITI authorities ranked
plant exports as a"promisin~ export conunodity of the eighties based upon techno-
logical capability," and expectG it to play the role as a"relaxant" to avoid
trade fricCion bec