But when investment bankers broached the subject at Japan’s Ministry of Economy, Trade and Industry (METI), officials there rejected the deal. Said one bureaucrat, according to an investment banker, “If you came here to ask us about foreign ownership of Olympus, the answer is 'NO.' We don’t even want to know the name of the foreign companies interested in Olympus.”
Rather than Samsung or GE, Sony -- with little medical equipment expertise -- agreed in September to pump 50 billion yen ($642 million) into cash-strapped Olympus, making Sony the largest shareholder with around a 10 percent stake.
Some Japanese industry sources believe METI bureaucrats engineered the deal to save Sony. After all, the Japanese consumer electronics giant is in dire straits. It needs new businesses well beyond its traditional TV and video camera products. By investing in Olympus, Sony gets instant access to its strong technology and market share in the endoscope business.
A third example of bureaucratic meddling: Speculation abounds in Japan concerning the future of the Hon Hai-Sharp relationship. Rumor has it that METI is looking for a way to rescue Sharp as Japan Inc. bailed out Renesas. The goal is to deny Taiwan’s Hon Hai (better known in the west as Foxconn) a controlling share in Sharp and it's technology. It’s uncertain how Japan Inc.’s response to the existing Hon Hai-Sharp deal will unfold. There appears to be an effort afoot among Japanese officials to prevent the Taiwanese EMS behemoth from devouring Sharp.
Trying to save people’s jobs and keep Japan’s indigenous technologies from moving offshore in the name of economic security may have been admirable in the 1970’s and 1980’s. In 2012, it looks almost suicidal.
Many foreign observers are mystified about why Japan seems to think it has plenty of time to fix its deepening problems. An even bigger mystery is: Why do the Japanese seem to believe that only domestic players can solve its economic and technology problems?
The Japanese ship of state is taking on water. There is no shame in sending an SOS to every ship within range, even if they’re flying foreign flags.