New Business Leader Is Assuming

Chairman of Toray, one of the major textile companies in Japan, Sadayuki Sakakibara, is assuming to be the next Chairman of Japan Business Federation, or Keidanren. The greatest reason why he was named was his possible closeness to Abe administration. In this crucial timing of getting rid of decades long deflation, Keidanren chose a person who would be coping with politics. However, it is not the decision of Sakakibara but of each company who would decide whether or not to raise wages of workers, which may definitely affect the result of Abe’s economic policy.

Toray was established in 1926 as a manufacturer of staple fiber, mainly rayon. It expanded its business from clothes to industrial materials such as nylon or carbon fiber, raising it to a global corporation known as one of the most advanced fiber maker in the world. Toray reached a deal with Boeing of exclusive license of carbon fiber installed in the body of B787 Dreamliner in 2006. As a prominent engineer, Sakakibara raised the company to the top of the world in the share of carbon fiber and led it as the president from 2002 to 2010.

The board of Keidanren first asked the chairman of Hitachi Corporation to accept next chairmanship, which effort resulted in failure. Current Keidanren chairman, Hiromasa Yonekura, insisted that his successor needed to be from manufacturing company, maintaining the tradition of the federation. Yonekura never gave up his idea that manufacturers were axle of innovation in Japan. He picked Sakakibara evaluating his successful rebuilding of Toray as global economic player.

Since Kaidanren was established as a body of Japanese major corporations for dealing with political affairs, the first job of Sakakibara will be dialogue with Abe administration. The relationship between Keidanren and Abe administration has been sober after Yonekura criticized Abe’s economy policy that heavily depended on positive monetary and fiscal policy as reckless. Even though Sakakibara was a member of Industrial Competitiveness Council presided by Abe, it is not easy for new chairman to achieve Abe’s goal of raising wages to the extent of withstanding consumption tax hike in April.

Abe administration is welcoming Sakakibara as the counterpart of dialogue over economic growth. Chief Cabinet Secretary, Yoshihide Suga, commented on him as “a person who understands our effort to revitalize Japanese economy.” There, however, is a skepticism that Abe’s top-down approach to encouraging economic growth would not be working well. It is unclear whether Keidanren is even the key player in Japan’s economic recovery.