When Pilkington, the British glassmaker, agreed to a bid from Nippon Sheet Glass, its largest shareholder, in 2006, there was barely a peep of protest from UK politicians or public about the transfer of a historic British industrial company into foreign ownership.
Still, there was an undercurrent of concern. A flotilla of big blue-chip British groups – Allied Domecq, BPB, BOC, P&O – had recently succumbed to foreign bids, and the London Stock Exchange was under siege from Nasdaq. Where the British market in corporate control was wide open, other countries were declining to open up, or actively slamming down the protectionist shutters. What about reciprocity, some critics complained?
Two years on, consider this: Stuart Chambers, Pilkington’s former boss, is being elevated to president and chief executive of NSG, while five of the group’s 12 board members – including the Pilkington-bred finance director and the head of the automotive glass division – are non-Japanese. Mr Chambers even wants NSG to move to a more shareholder-centric approach. Some people might call this a reverse takeover.
That would be an exaggeration, of course. That Pilkington punches so hard in the NSG boardroom reflects the fact that it was twice the size of NSG at the time of the deal. The Japanese company was at a stroke transformed into an international group and now, unsurprisingly, requires international leadership.
NSG’s headquarters and heart are in Tokyo, not St Helens, Pilkington’s English hometown, but the visible presence of ex-Pilkington management in the upper echelons of a Japanese company is a reminder that it makes little sense to assess a nation’s corporate and industrial strength solely by reference to the nationality of its companies’ owners. In Wednesday’s FT, Sir John Rose, chief executive of Rolls-Royce, made a strong case for a UK policy framework to preserve and encourage industry. But while he laments the transfer of certain industrial skills abroad, Sir John eschews protectionism and explicitly states that one aim of such a policy ought to be to encourage non-British companies to develop high value-added manufacturing in Britain.
Japanese policymakers – some of whom seem increasingly suspicious about foreign investment – should take note. Non-Japanese managers will rarely rise to the top of the Japanese corporate hierarchy. A far easier way to bring in fresh ideas and reinforce a strong, global economy is to encourage the world’s best companies to invest in it.
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