Tsuyoshi Nojima :
Foxconn-Sharp Courtship ‘a Cultural Issue’
Veteran journalist and long-time Taiwan watcher Tsuyoshi Nojima says it is hard for older Japanese to accept the proposed acquisition of Sharp by Foxconn.
Foxconn-Sharp Courtship ‘a Cultural Issue’By Elaine Huang, Sidney Peng
From CommonWealth Magazine (vol. 592 )
The alleyways around Tokyo’s Freedom Hill district are filled with throngs of young people on weekends.
Former Yomiuri Shimbun correspondent in Taipei, Tsuyoshi Nojima, sits at a familiar café, discussing the big Foxconn-Sharp “courtship” that has been the talk of the town in Taiwan and Japan in recent days. He wastes no time in coming to his point.
“My eighty year-old father keeps asking, what kind of company is Foxconn? What do they do? And how could such a company, which has never marketed its own brand, be so big?” He chuckles.
A veteran observer of Taiwanese and Japanese cultural, political and economic issues, Nojima ventured as far as Foxconn Chairman Terry Gou’s ancestral home of Jincheng in China’s Shandong Province four years ago. And in an effort to gain better insight, he even visited the General Guan Yu Temple in the Taipei suburb of Banqiao that Gou frequents. Still, his father’s questions illustrate the curiosity and reservations most Japanese people have toward Gou and Hon Hai Precision (which trades as the Foxconn Technology Group).
“Everyone in Taiwan thinks the Foxconn-Sharp union is a business issue, but I think it’s a cultural one,” asserts Nojima, implying that the ability to bridge cultural differences is what will determine whether the business partnership bears fruit. Following is our interview, abridged and edited for clarity and brevity:
CommonWealth: What is your take on the Foxconn Technology Group’s potential acquisition of the Sharp Corporation?
Tsuyoshi Nojima: To begin with, no one in Japan refers to the acquisition as a “marriage” or any other related term. The reason is that this relationship has always been about Foxconn courting Sharp, but Sharp had always rebuffed Foxconn’s advances, so it is seen as a one-way infatuation as opposed to mutual interest in a union.
Sharp has not accepted the proposal willingly, but only now that it has been backed into a corner with no path for retreating, and Foxconn is its only choice. If Sharp rejects Foxconn’s offer, it might have to take INCJ’s (Innovation Network Corp. Japan, a state-backed entity) bid, but that would then result in splitting Sharp up, effectively ending the brand’s existence.
Gou Seen as Chinese Nouveau Riche
The Japanese public’s initial reaction to Foxconn’s acquisition of Sharp was a sense of awkwardness. If an American company had acquired Sharp it would have seemed okay, but the idea of a Taiwanese entity – an Asian corporation –buying ‘our’ Japanese company elicited a sense of loss. Fortunately, Foxconn is a company with roots in Taiwan; if it had been a Chinese or Korean company, the public backlash would certainly have been a lot stronger. Japanese companies have felt good about Taiwan in recent years, drawing them closer.
CW: How does the Japanese public view (Foxconn Group and Hon Hai Technology Chairman) Terry Gou?
Nojima: When Terry Gou came to Osaka in early February and appeared on Japanese television for the first time with considerable attention on him, it was the first instance in which many Japanese people had encountered him.
The fact that Gou flew to Japan in his private plane took many Japanese aback. For many people, Gou stepping out of his private plane with a Guan Gong neckerchief made him seem as if he were Chinese nouveau riche – an impression due to their unfamiliarity with his reverence for Guan Gong.
Most Japanese business figures tend to be concerned about the public perception of things like flying in a private plane – even if they have one of their own. They hope to project the image being “low-key” or “modest,” but Gou did not go out of his way to appear modest.
CW: A lot of people draw parallels between Terry Gou and Softbank CEO Masayoshi Son. Why is that?
Nojima: Japanese corporate culture comes in two forms. Examples of the first type include century-old conglomerates like Sharp and Matsushita (the parent company of Panasonic) founded during the Meiji and Showa periods. The other kind were founded by IT entrepreneurs that emerged in the 1990s, like Softbank’s Son, Rakuten’s Mikitani Hiroshi, and Uniqlo’s Tadashi Yanai. This latter group, who are atypical Japanese entrepreneurs, are somewhat similar to Terry Gou in that they do as they please and they have been known to yell and scream at people, but they are decisive and resolute and know how to present themselves to the media.
If Gou were to purchase a Japanese IT enterprise, the cultural gap would be marginal, but he is looking to buy Sharp – a very Japanese, traditional, century-old business. This poses a great deal of difficulty.
Brand Consciousness and Disdain for OEM
CW: How does the Japanese public feel about Foxconn becoming (the majority) shareholder of Sharp?
Nojima: On the Internet, the majority supports Foxconn. Given the choice between INCJ and Foxconn, which is preferable? The answer is Foxconn, without a doubt. The company is strong and capable, with its own customers, like the world-leading brand Apple.
Yet for the older generation of Japanese people, Sharp holds another type of significance. Sharp was the inventor of many things inextricably linked to Japanese society, like the transistor calculator and the sharp pencil – both of which I used when I was growing up. So many things people liked to use during the Showa period (1926-45) were invented by Sharp. People 50 years and older identify with Sharp as a symbol of Japan, so for a foreigner to buy the company is a shock and hard for them to accept.
My father is 80 years old. He keeps asking me, “What kind of company is Foxconn?” He can’t believe it. I tell him, Foxconn is a bigger company than Toshiba and Hitachi, and he asks, “What products do they make?” I tell him, “smart phones.” And he asks again, “But why don’t they have a brand?” I say, “They do contract manufacturing.” With that, his instant response is, “But how can an OEM manufacturer be so big?” He’s incredulous.
Japanese have a strong brand consciousness and look down on contract (OEM and ODM) manufacturing. Even though Japan itself got its start manufacturing for the General Electric Corporation, it has amnesia about where it came from.
CW: If Foxconn succeeds in its bid to become the majority shareholder of Sharp, what do you see for the future?
Nojima: The Foxconn-Sharp courtship created many land mines and conflicted mindsets, so I am not too keen on the pairing prior to the resolution of such issues. Naturally, it would serve as a model for Taiwan-Japan collaboration, and should it succeed it would certainly make further cooperative efforts easier moving forward.
Translated from the Chinese by David Toamn