Splitting Kawasaki and Oheyama into companies — and putting them back (2003)

A distance that separation did not shorten

The spin-off was a device for making somebody responsible for assets that could be neither sold nor shut. Kawasaki and Oheyama were both core to the business, so exit was not an option. The next best thing was to divide the profit and loss, put a president over each works, and have costs and investment thought about as one’s own company’s business. After the people and the plant had already been cut back in 1999, this line-drawing was the hand that remained. Indeed, the management of YAKIN Oheyama stated plainly in writing after the separation that the content of the work was unchanged from its days as a works. What changed was not the job but whose account it belonged to.

The effect of that re-drawing was measured in the collapse after the Lehman shock. When raw material and product prices swing violently at the same time, a structure that parcels out decisions on mining, smelting, rolling and sales to separate companies works against speed. Facing a net loss of ¥12.6 billion for the year to March 2010, the company put the organisation chart back where it had been seven years earlier — by simplified merger, the quietest procedure there is, needing no shareholder meeting, no new shares and no consideration. After seven years of being divided and rejoined, Kawasaki and Oheyama settled back into the name they had held since 1943: works of the same company.