NEWS ANALYSIS : The Bidding for MCA : Muted Reaction to Deal Sparks Debate

Jiro Aiko landed in Los Angeles on Monday to find front-page coverage of the largest Japanese takeover of a U.S. company in history, the $6.59-billion acquisition of MCA Inc. by Matsushita Electric Industrial Co. As the Japanese executive scanned the coverage and talked to his American friends, however, he concluded that U.S. backlash wasn’t nearly as severe as last year, when Sony Corp. bought Columbia Pictures.

Aiko should know. He is one of Sony’s managing directors.

So far, no one has called for an investigation into possible antitrust violations as Rep. Helen Bentley (R-Md.) did following the Sony acquisition. Newsweek magazine, which ran a controversial cover story on Sony last year--”Japan Invades Hollywood”--doesn’t consider the Matsushita purchase equally newsworthy. Johnny Carson hasn’t cracked one joke about it, as he did about Sony. And Matsushita President Akio Tanii has not felt obliged to engage in international damage control as Sony Chairman Akio Morita did when he personally wined and dined foreign journalists in Tokyo to defend the $3.4-billion purchase.

“I myself felt that the reaction this time was much milder,” Aiko told a U.S.-Japan business forum this week. “This is strictly my own personal view, but I think it’s because this was the second time.” Referring to Matsushita’s reputation for following trails blazed by Sony, he joked: “Matsushita was once again very wise” to wait.

The relatively muted reaction to the Matsushita deal may be the latest indication that Japan-bashing is in a lull. The Japanese acquisition in September of Pebble Beach Co., a racist remark by a Japanese Cabinet official and a book about Japanese lobbying influence in the United States have all failed to provoke the usual outrage.

But whether that means Americans have come to have more positive feelings toward Japan or are simply distracted by more pressing events is very much subject to debate.

“As far as we’re concerned, I feel things are getting more comfortable for Japanese,” said Masayuki Kohama, senior representative of Hitachi Ltd.’s Los Angeles office. “There’s a lot of effort of Japanese companies to do community activities. And, from the other side, Americans are starting to become more aware about globalization.”

In New York, Newsweek magazine Editor Maynard Parker also said American attitudes toward Japan seem to be improving as a slowing economy makes them long for yen.

“There is clearly less static on (Capitol) Hill. At a time America is in recession, people are worried about the Japanese government buying our long-term (Treasury) bills and are happy to have foreign investment, Japanese included,” Parker said.

He added that Japan’s recent cooperation on trade issues has improved the climate as well.

Parker would not disclose Newsweek’s upcoming Matsushita coverage, but said the recent deal lacked the “shock value,” the climate of Japan-bashing and the household name value that prompted editors to put the Sony story on its cover last year.

Others took a less sanguine view.

“I don’t think it has necessarily been reduced. You have more imminent problems, like the Persian Gulf crisis and the midterm elections,” said Rokuro Ishikawa, chairman of the Kajima Corp. and the Japan Chamber of Commerce and Industry.

“So the problems were muted, but only hidden behind major events. I think the American people’s reaction vis-a-vis Japan is a deeper rooted psychological perception, not only a problem of economic matters.” The chamber held a forum with the California Department of Commerce in Los Angeles this week in the first leg of a five-city visit to the United States.

Steve Clemons, executive director of the Japan America Society of Southern California, argued that anti-Japan sentiment is alive and well, but has merely been transferred from investment to the Mideast crisis.

Instead of protesting Japanese acquisitions, U.S. opinion makers are criticizing Japan’s limited contributions to the Gulf operations, including its refusal to send even non-military personnel there.

“The obsession everyone had with Japan is basically on hold. It hasn’t disappeared. I don’t think things have been solved. I really believe if the Kuwait situation wasn’t occupying us, American society would have reacted strongly to each one of these other events,” Clemons said.

Indeed, one Japanese government official, who asked not to be identified, said he is bracing himself for even more virulent anti-Japanese sentiment should a Mideast war break out.

“Once war breaks out, and many American people die, then American people will wonder why didn’t Japan make a bigger contribution. We just paid money, that’s all,” the official said.

Analysts said they began noticing a lull in September, when the purchase of Pebble Beach by Cosmo World of Japan caused barely a ripple, compared to the outcry over Rockefeller Center and other high-profile acquisitions.

The national weekly magazines ignored the story, as did Johnny Carson--who golfs at Pebble Beach.

“Agents of Influence,” a book about Japanese lobbying influence in the United States by Pat Choate, was expected to be a dynamite best-seller.

The publisher, Alfred A. Knopf Inc., booked Choate into a 10-city book tour and national talk shows, promoting the product with phrases like “explosive book” and “brutal lesson.” But some merchants report disappointing sales.

“It’s doing much worse than expected,” said Ellen Ross, manager of B. Dalton Booksellers in the Beverly Center. “I had expected it to be a strong seller through the holidays, something I might reorder several times, but I’m still sitting on the initial shipment.”

Ross said she had prominently displayed the book near the front of the store in anticipation of major sales, but has only sold four of 25 copies.

In New York, B. Dalton reported similarly sluggish sales throughout its 800 stores nationwide. Knopf senior editor Ashbel Green said sales trends won’t be clear until after the holidays, but that he is not disappointed and printing has reached 65,000 copies.

In addition, a recent remark by a Japanese Cabinet official comparing blacks to prostitutes created a stir in the black community and coverage in most of the major daily newspapers.

But similar racist remarks by other Japanese officials, Michio Watanabe and Yasuhiro Nakasone, drew broader coverage that extended to the national magazines, and a more widespread reaction among grass-roots Americans, Clemons and others said.

“Americans don’t have an especially long attention span and they also aren’t able to focus on a wide variety of topics,” said one U.S. consultant who tracks media coverage for a Japanese firm.

“When you’re wondering whether we’ll go to war with the Mideast in January, who the heck cares if someone bought something? The timing is way off for a big reaction.”