Former Nissan Executive Will Head Fuji
A former Nissan executive was elected Thursday as president of Fuji Heavy Industries Co., giving Nissan effective control over the slumping manufacturer of Subaru cars.
Fuji shareholders approved the selection of Isamu Kawai, former president of Nissan Diesel Motor Co., a subsidiary of Nissan Motor Co., at a meeting in Tokyo.
Nissan, Japan’s second-largest auto maker, is Fuji’s largest shareholder, with a 4.2% stake, and its superior in a corporate grouping, or keiretsu. Japan has many such groups, bound together by cross-shareholdings, other financial ties and common business strategies.
“Fuji would have been probably taken over if it were in the United States, and I’m sure even Nissan had difficulty deciding whether it should acquire it,” said Kimihide Takano, an analyst with Chemical Securities Co.
He said Nissan chose a typically Japanese way, taking advantage of its superior position in the group to send an executive to exercise control.
“This way, Nissan can obtain the same economic effects as acquiring the whole company,” Takano said.
He said Nissan plans to use Fuji facilities to expand its production and to obtain Fuji’s technology in the defense and aerospace industries.
Fuji is one of the nation’s largest makers of military, aerospace and railroad equipment, but such production accounted for only 20% of its sales last year. Eighty percent of Fuji’s 1989 sales of $4.3 billion came from automobiles.
1989 sales were down 15% from the previous year, and Fuji ran up nearly $194 million in debt during the year.