Japan's two biggest business organizations are to join forces today with the Toyota chairman leading the new entity as the nation's companies struggle to survive global competition by streamlining operations.
The Federation of Economic Organizations or Keidanren, Japan's largest business lobby group, will join forces with Japan Federation of Employers' Associations or Nikkeiren, which served as a management union for labor rows, to create the Japan Business Federation.
"There is no authorized abbreviation of the new organization ... but some people call it a new-Keidanren, to which we see no problem," a Keidanren spokesman said.
The number of member companies will rise to over 1,200 from the current 970.
"As over 50 years have passed since World War II, it is increasingly difficult to handle labor and economic issues separately," the two groups said in a joint declaration in January 2001 after the formal approval of the merger.
Keidanren, founded in 1946 to solve wide-ranging economic issues, now groups 970 companies, excluding special member firms such as foreign firms with no foothold in Japan and the honorable individual members.
The chairman of the Keidanren -- a post last served by Nippon Steel Corp head Takashi Imai -- has been dubbed "prime minister of the business world" and wielded strong political influence.
Nikkeiren was set up in 1948 under the slogan that "Employers, be righteous and strong" in order to counter frequent labor disputes amid inflation and food shortages at the time. It now comprises employers' associations from Japan's 47 prefectures and 57 industrial groups.
The new organization will also inherit the regional employers' groups under Nikkeiren and more than 70 individual members in Keidanren.
Hiroshi Okuda, chairman of Japan's top automaker Toyota Motor Corp will by chairman of the new group. He has headed Nikkeiren for the past three years under the banner of "a market economy with a human face," while Japan's unemployment rose to record levels.
After the announcement of his appointment, Okuda humbly said: "In spite of my little power, I will exert myself to the utmost to rebuild the Japanese economy which has been hit by deflation."
The merger will leave the Japan Association of Corporate Executives, or Keizai Doyukai, as Japan's only other major business group, given the marginalized role of the Japan Chamber of Commerce and Industry for smaller companies.
Doyukai's chairman, Yotaro Kobayashi, who also chairman of Fuji Xerox Co Ltd, said that the merger was in line with other corporate efforts to reduce the size of such organizations.
"As there are moves for rationalization and restructuring in the society, the business world also needs to face them squarely," he told a news conference last week.
"I will keep a close watch on how the new organization will decide on concrete restructuring and rationalization voluntarily."
Okuda played a central role in annual wage-hike negotiations this year as trend-setting Toyota broke a decades-long custom by not offering rises in salary scales.
He stuck to a proposal to keep pay unchanged apart from a seniority-based increase, even though the major carmaker was driving to a record profit for the year to March.
Annual pay rises for Japanese workers comprise an increase based on the length of service and a rise in salary scales.
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