February 26, 2020

Japan Re-emerges in the Aerospace Arena With a New Jet

Japan’s golden era of aviation that culminated with the feared and respected Mitsubishi Zero fighter planes had ended a decade earlier along with World War II. Banned from making planes by American occupiers after the war, then allowed to make only parts for American military jets, Japan’s aircraft industry was a shadow of its former self.

If all goes well this year, Mr. Kawai, now 65 and president of the Mitsubishi Aircraft Corporation, will preside over Japan’s biggest aviation comeback since the war. In late 2013, the company plans the first flight of its Mitsubishi Regional Jet, a sleek, 90-seat commercial plane that is Japan’s bid to break into the industry’s big leagues after almost 70 years.

“For decades, we were confined to supplying parts for other passenger jets. But we’re finally heading into new territory,” Mr. Kawai said in a recent interview at Mitsubishi Aircraft’s Tokyo office.

Mitsubishi’s comeback was abetted in large part by Boeing’s outsourcing more of its aircraft manufacture to overseas suppliers. As Boeing came to rely on foreign contractors, Japanese manufacturers moved in, designing and supplying some of the jet’s most vital sections.

A full third of Boeing’s new 787 Dreamliner is supplied by Japanese manufacturers, including Mitsubishi Aircraft’s parent company, Mitsubishi Heavy Industries, which makes the jet’s carbon-fiber composite main wings.

Even so, Boeing and Mitsubishi could not be further apart in their approach to jet-building. In contrast to the cutting-edge 787, Mitsubishi’s regional jet uses only a little of the advanced carbon fiber that its parent company supplies to Boeing.

Neither does its regional jet use the volatile lithium-ion batteries that have become a major headache for Boeing, overheating on two separate planes in January and prompting American and Japanese safety regulators to ground its entire 787 fleet.

Mitsubishi’s caution underscores the importance, to the company and to Japan, of getting the regional jet project off the ground in an industry where reputation for reliability is paramount. That is especially the case, experts say, for a country long absent from the business of making planes, save military jets under license from the United States, and a series of small private jets.

In the late 1950s and 1960s, Mitsubishi participated in a consortium to develop the YS-11 plane, a 60-seat turboprop airliner led and largely financed by the Japanese government, which was eager to restart the country’s aviation industry.

Leading the YS-11’s design was Teruo Tojo, one of the Mitsubishi Zero fighter’s original engineers and the second son of Hideki Tojo, the Japanese wartime leader who was executed as a war criminal by the Allies. But with no experience in making civilian jets, Mr. Tojo and his team of engineers struggled with the YS-11’s design.

Early versions of the aircraft rolled from side to side, regulators in the United States who tested the plane charged, and leaked rainwater. Its air-conditioning systems broke down. Passengers complained its roaring twin engines were too loud. And despite generous state backing, soaring manufacturing costs crippled the consortium’s finances. In 1973, barely 10 years after the YS-11’s maiden flight, the consortium canceled the project. It built just 182 aircraft and sold its planes at a loss.

“We wanted to sell to the world, but on the ground, we felt we were chasing an impossible dream,” Mr. Tojo, who eventually became vice president of Mitsubishi Heavy Industries and president of Mitsubishi Motors, reminisced in a 1990 interview with the Nikkei Sangyo Shimbun newspaper. “Who would buy a plane made in Japan?” Mr. Tojo passed away last year at the age of 98.

Burned by the YS-11 flop, Japan shifted its aviation strategy to supplying, and learning from, the largest aircraft makers of the time, of which the largest was Boeing. Japanese suppliers have played an increasingly bigger role in building Boeing aircraft, supplying 15 percent of the 767 jet, 21 percent of the 777, and 35 percent of the 787.

The Japanese government quickly became one of the largest financial backers of those projects, handing out billions of yen in subsidies to help Japanese suppliers develop technology and win lucrative contracts from Boeing. Though the government declines to reveal exact numbers, estimates by researchers at the State University of New York of how much Japan has handed out to 787 suppliers in subsidies and loans over the past decade are as high as $1.6 billion. .

Article source: http://www.nytimes.com/2013/04/10/business/global/japan-re-emerges-in-the-aerospace-arena-with-a-new-jet.html?partner=rss&emc=rss

DealBook: Bain Capital Buys Half of Japanese TV-Shopping Company

Bain Capital agreed on Friday to buy 50 percent of one of Japan’s biggest television shopping companies marking the latest move by the private equity firm into that country.

Bain is acquiring the stake in the company, the Jupiter Shop Channel Company, from Sumitomo. The firm is paying more than $1 billion, a person briefed on the matter told DealBook.

Through the acquisition, Bain will buy a piece of one of Japan’s fastest-growing retail companies. Founded in 1996, Jupiter currently controls about 30 percent of the country’s TV-shopping market, according to Sumitomo. It draws an audience of about 27 million households across Japan, though it is available only in about half of the country’s households.

Jupiter generated about 120.9 billion yen, or $1.5 billion, in sales for the fiscal year that ended in March.

“We are pleased to enter this important partnership with Sumitomo Corporation and the company’s management team to accelerate the next phase of growth at Jupiter Shop Channel,” David Gross-Loh, a Bain managing director, said in a statement.

The transaction was led by Bain’s Tokyo office, which was opened in 2006 and has struck a number of deals since then. Among the firm’s acquisitions in Japan are Skylark, a big restaurant operator, and Bellsystem24, a major call center company.

Over all, Bain has struck at least three deals this year. Late last month, the firm agreed to buy Consolidated Container from a group led by Vestar Capital.

Article source: http://dealbook.nytimes.com/2012/06/22/bain-capital-buys-half-of-japanese-tv-shopping-company/?partner=rss&emc=rss