Will Omron's chairman be able to save deeply troubled Renesas? That's the $64 billion question swirling around Tokyo.
Will Omron’s chairman be able to save deeply troubled Renesas? That’s the $64 billion question swirling around Tokyo.
The key to understand the background of this quandary is knowing two companies -- Kyocera and Omron.
First question: Kyocera and Omron -- what do they have in common?
You may not see very much affinity here, other than that they are both profitable Japanese component manufacturers.
But in Japanese business and political circles, each company is known for its uncharacteristically outspoken, strong-willed founder. Each company’s successful corporate history is also the stuff of legend in corporate Japan.
Second question: Where are they based?
The two companies are headquartered in Kyoto, located in Japan’s Kansai region. Kansai is known for its down-to-earth, no-nonsense people, renowned for a strong business acumen nurtured in Kansai’s merchant culture.
Third question: Why is Kyocera important in understanding the choice of Omron’s chairman as the Renesas CEO?
OK, recently, top management at both Kyocera and Omron has been separately tasked to pull off a mission impossible: Turn around deeply troubled Japanese companies.
Kazuo Inamori, founder of electronics firm Kyocera Corp, was brought in as chairman of then bankrupt Japan Airlines in 2010.
Omron Corp. chairman Hisao Sakuta was recently named CEO and chairman of ailing Renesas Electronics Corp. Sakuta is scheduled to head Renesas after he leaves Omron in June.
Inamori proved his chops and demonstrated his decisive management skills at JAL. The long-troubled national flag-carrier made a triumphant return last fall by relisting its stock in a $8.5 billion initial public offering, the world’s second-largest in 2012 after Facebook’s $16 billion IPO. It made JAL the first company ever to return to the main board of Tokyo's stock exchange after going through the Japanese equivalent of Chapter 11 bankruptcy.
While the restructured JAL embraced a much needed cost-conscious culture introduced by Inamori, the company made further investments in aircraft and service, which helped JAL succeed in going upmarket.
Inamori retired from JAL in April with his reputation and charisma intact.
How Omron’s Sakuta plans to lead Renesas, however, remains unknown.