Japan, Inc., Meets Our Town USA (1990)
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Japan, Inc., Meets Our Town USA (1990)

Almost half of U.S. citizens say Japan is America's least trust­worthy ally; nearly two-thirds believe Japan unfairly restricts the sale of U.S. goods; a similar number feel Japanese investment in the U.S. should be actively discouraged.

Paul Holmes

 

First the bad news. Almost half of U.S. citizens say Japan is America's least trust­worthy ally; nearly two-thirds believe Japan unfairly restricts the sale of U.S. goods; a similar number feel Japanese investment in the U.S. should be actively discouraged; and even before the revolution in eastern Europe last year, 68% of Americans thought the economic threat to the U.S. posed by Japan was more serious than the military threat from the Soviet Union.

Now the good news. Despite this simmering resentment, Japanese com­panies continue to sell more of their products to American consumers. In 1989, in fact, Americans bought more than $93 billion of Japanese goods, compared with just $66 bil­lion five years ago.

There is an obvious discrepancy between the way Americans regard Japanese products, which have earned a reputation for quality and reliability, and the way they regard Japanese companies, which have a reputation—also earned—for arrogance, remoteness, and indifference to the pub­lic. In a Journal of Marketing article more than ten years ago Philip Kotler and William Mindak discussed the difference between mar­keting-oriented companies and public-oriented compa­nies. Japanese corporations exemplify that difference.

"When the Japanese first came over here in the late­'50s, nobody wanted to buy their products," recalls Norman Weissman, vice-chairman of the GCI Group, who took on his first Japanese PR client in 1959. "They had come to a market that had no use for them. In some cases they didn't even know what they should be making. But one thing about the Japanese is they study hard and they have a very long atten­tion span. Year after year they made better products, year after year they marketed their products better. They hired the best advertising agencies, the best PR agencies.And eventually they arrived at the position they are in today."

Yet until two or three years ago, even the largest Japanese companies in America had little corporate representation here. They were represented by sales and marketing divisions, with an emphasis on product pro­motion rather than corporate profile. And, given their success, there was little incentive for them to question that approach.

"Japanese businesses believed a good reputation would come from selling good products," says Weissman. "And it wasn't as if they were struggling, or people were refusing to buy Japanese goods."

In some ways, however, they were vic­tims of their own success. The more Japanese goods were sold in the U.S., the more U.S. investors sought out Japanese stocks, the more familiar the corporate names became, the more the trade imbal­ance became an issue. Some companies opened manufacturing facilities here. That created a need for employee communica­tions, for community relations, for corpo­rate structures to be brought in on top of the marketing divisions.

Meanwhile, resentment of Japanese achievement was growing. America's failure to compete in the world market place had many looking for a scape­goat, and the trade figures pointed at Japan. The U.S. media resorted to headlines that screamed of the "Return of the Yellow Peril"—a barely concealed reference to the hostilities of 50 years ago—and negative ads began to appear, like one for a consor­tium of Bell telephone oper­ating companies that fea­tured a stern-looking Samurai and a warning about the Japanese threat to the telecommunica­tions business, or another in the New York area for the Tri-State Oldsmobile Dealers, which compared the average height of American men with Japanese men and con­cluded: "That's why our car is built for our size families, not theirs."

While sales were not yet suffering, the Japanese recognized that if the situation were allowed to worsen it could have a long­term impact on their competitiveness. However, to give corporate communication a higher priority meant transforming their U.S. operations and overcoming some major cultural obstacles.

"Even in their own country, the Japanese were not used to communicating on a cor­porate front," says Michael Solomon, a Japan scholar who runs an agency that bears his name and specializes in helping Japanese companies do business in the

U.S. "The larger companies in Japan have very cozy rela­tionships with the media. Many even run their own press clubs. And they are part of the establishment, having played such a major role in the rebuilding of the country. They do not face the same level of scrutiny they face in this country."

Another inhibiting factor was the Japanese belief that it is inappropriate for a compa­ny to boast about how good it is. And then there was the reluctance of many individual Japanese com­panies to take the lead, for reasons perhaps reflected by an old Japanese proverb warning: "The nail that sticks out gets hammered in."

Nevertheless, the Japanese began to adapt, some more successfully than others. One of the first to realize the importance of being seen to put something back into America was Honda, which took the lead by opening its first U.S. factory in Marysville, Ohio, back in 1982. Honda had always been a maverick corporation by Japanese standards, defying the powerful Ministry of International Trade & Industry (MITI) by getting into the auto business in competition with Toyota, in the first place, and expanding rapidly overseas to a point where the U.S. accounted for almost 50% of its worldwide sales.

In March 1988, the company scored a major public relations triumph when it drove a Honda Accord off the Marysville production line, transported it north to Seattle, and loaded it aboard the S.S. Green Bay, past a crowd of local dignitaries and national TV and print reporters. It was the first Japanese car to be exported from the U.S. to Tokyo, and the company was mak­ing the most of the opportunity to empha­size its commitment to America.

A month later Business Week reported on "The Americanization of Honda" and some began to question whether a car built by a Japanese-owned company employing U.S. workers was not, in fact, more American than one built by a company with its head­quarters in Detroit but much of its labor force in South East Asia.

"Just as American companies in Japan have to show they are there for the long haul, so Japanese companies in America must be seen to be committed to the market," says Tom Eidson, president of Hill & Knowlton Inter­national. "In America, ceos are judged by their involve­ment in the community, by giving speeches and being quoted in the press. The Japanese have been reticent in emulating this communi­cations effort, but they are getting better."

He points out that in the early days of Japanese incur­sion, most of their U.S. man­agers were relatively junior executives, but that as the American market has grown in importance their places have been taken by very senior people. While there are few Japanese managers in the States with the pro­file of Sony's Aldo Morita, the

new breed includes more characters like Toyota's Yukiyasu Togo, so committed to cultural adaptation that he shaved his head and entered a Buddhist monastery to better understand the Thai market.

In the U.S., Togo began a monthly video "letter" for salespeople, and targeted the black and Hispanics popula­tions, both for corporate phi­lanthropy programs and spe­cial marketing efforts. Toyota U.S.A. has also emphasized community relations, becoming a high profile company in its home state of Kentucky.

Most PR practitioners agree that the local community is the best starting point for a successful public relations effort. Eidson cites Nissan's community relations efforts in Tennessee, where the company has built on a good relationship with its employees and been given credit for reviving a flat economy. Mazda and Hitachi, meanwhile, have under­taken programs to recruit and train diverse minority groups, recognizing that they are in many ways the future of America.

Michael Solomon's client Fujitsu has worked hard to establish a good relationship with its local community in the Bay Area, donating hundreds of thousands of dollars to earthquake relief and launching minority scholarships in Silicon Valley, and in Florida, where its efforts were recognized by the Association of the Physically Handicapped. Another Solomon client, cosmetic company Tsumura, is hoping for similar success by a similar route in Minneapolis.

"So far, Japanese companies have been very successful on a local level," says Solomon. "In a community setting, where people can really get to know the company, and where the company makes an effort, relations have been good. It's on a national level, where there is less personal contact, that there's still a problem."

The Japanese have even cottoned to the value of corporate advertising as a means of making sure their various publics know about their commitment to America. Perhaps the most extreme example was an ad featuring Ken Hiyama, president of Toshiba, in a Bruce Springsteen-like pose, guitar slung over his hip, talking about that company's commit ment to New Jersey, but Mitsubishi also runs ads stressing its American-ness, while Toyota emphasizes its charitable donations and Komatsu's tagline reads: "Work for the world. Care for the community."

All of which is not to say Japanese corporate-commu­nity relations efforts have been without their problems. Tom Eidson points to reports in the New York Times of Japanese firms investing large sums of money in University research. "At first blush this might seem to be a worthy cause," he says. "But, considering everything else that's going on, the reader could be led to believe that the Japanese are trying to buy up America's scientific intellect and research just as they bought up Rockefeller Center."

Employee relations, too, have been strained in some plants. Mazda manage­ment reportedly found it difficult to understand why employees would not voluntarily wear the company cap; other plants have been accused of adopting different standards for Japanese and American exec­utives, a kind of corporate apartheid that has bred mistrust.

The activities of Japanese lobbyists in Washington, DC, may be creating still worse problems in the long-term. While many Washington-watchers credit Toshiba lobbyists with saving the company from widespread sanctions after its sale of hi-tech equipment to the Soviet Union two years ago, others are outraged at the $30 million the company spent on that campaign, and at other high-cost programs waged by Japanese companies behind closed doors in the capital. Such is the level of discontent that a backlash appears increasingly likely.

Eidson thinks the Japanese have made a misjudgment in Washington. "Most lobby­ing campaigns are effective because the lob­byist is able to demonstrate that there is a power base behind his position. The Japanese haven't bothered to create that power base, and that is going to tell. They have to do work at the grass roots level before they can lobby effectively."

He also counsels that Japanese compa­nies should give serious consideration to the nature of their acquisitions in America. "The most recent acquisitions—Columbia Pictures, Rockefeller Center, our farmlands—are profound icons in the American psy­che," he says, and Japanese investors should examine the cost of these purchases in terms of the negative images they commu­nicate.

"That is why the current strategy of investing in partnerships and greenfield investing is a good one," he believes, point­ing out that almost 80% of the $18 billion Japan invested in the U.S. in 1989 fell into one of these two categories.

Nevertheless, there is a question of whether any individual Japanese company can win the affection of the American public while the image of the Japanese as a whole remains so negative, and some—Eidson included—believe Japanese industry will need to make a collective effort to address the concerns of the U.S. MITI is one source of potential leadership -indeed, its "vision for the '90s" report presents a new, mellow­er, more sensitive face of Japanese business. The Japanese External Trade Organization (JETRO), which promotes U.S. investment in Japan, is another.
However, even this approach has its drawbacks, as Michael Solomon points out: "If Japanese industry is seen to be working collectively, it is only going to reinforce the impression that there is a massive Japan, Inc., out there, taking over the U.S. econo­my. Ultimately, the response must come from the individual companies." 

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