Leo Lewis, Asia Business Correspondent
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Stuart Chambers, who led Pilkington through its controversial takeover by the Japanese two years ago, is to become president of the company that ended the St Helen's-based glassmaker's 180-year independence.
The surprise reversal of fortunes will put the British industrialist at the helm of Nippon Sheet Glass (NSG) - a group that, since its audacious purchase of Pilkington in 2006, has emerged as a global giant.
The appointment, which will be effective from June, breaks sharply from the traditionalist norms of Japan's “old economy” manufacturing industry and marks a striking shift of attitudes. It comes as Japan itself is under fire from European Union trade chiefs and fund managers for its closed stance towards foreigners.
Unlike London and New York-listed companies, the ultra-conservative business community of Japan Inc has collectively promoted only a tiny number of outsiders to run its largest business empires.
Mr Chambers, 51, who declared himself a “Tokyo boy” yesterday, joins a much-scrutinised club of foreign company presidents in Japan.
The clique consists chiefly of Carlos Ghosn, Nissan's Brazilian-Lebanese saviour, and Sir Howard Stringer, the British-born president of Sony.
Both men were appointed at moments of deep financial crisis in their respective companies.
Although Mr Chambers was invited on to the NSG board soon after its successful £2.2 billion bid for the British company, analysts assumed that he had hit a “bamboo ceiling” through which no non-Japanese could break.
Yet as the economic downturn bites into some of the group's biggest markets, Katsuji Fujimoto, NSG's outgoing president and future chairman, insisted: “This is not the moment to be dogmatic about selecting a Japanese manager to lead a Japanese company.”
Mr Chambers explained his promotion from chief operating officer as a natural effect of NSG's post-acquisition structure. By buying Pilkington - a company nearly twice the size of NSG - the Japanese group was transformed from a domestically focused player with nearly 80 per cent of its business in Japan to an international one with operations in 28 different countries.
“It's frankly not surprising that a lot of the global experience existed in the acquired company,” he said. The company now views Eastern Europe, where there is a shortage of glassmaking capacity, as a high-growth market, although it is doubtful that pre-Pilkington NSG would have exploited that.
Investors in NSG believe that there may be more behind the promotion than the simple need for global expertise. During the long process of buying Pilkington - Sir Nigel Rudd, its former chairman, turned down three successive NSG offers before recommending one to shareholders - the British company's business improved substantially.
Analysts believe that within the newly merged business the old bits of Pilkington may now, in fact, be more efficient operations than the legacy NSG parts, suggesting that Mr Chambers's true role is to turn the latter around before focusing on greater ambitions.
That may prove difficult. More than 10 per cent of group revenues are earned in the Japanese construction sector, whose vigour has been badly sapped by earthquake safety regulations introduced last year.
NSG, as Mr Chambers admitted yesterday, also remains heavily laden with the debt that it used to acquire Pilkington, a balance-sheet position that makes any significant mergers and acquisitions highly unlikely for now.
Mr Chambers's newly raised profile in Japan is also expected to highlight the country's increasing discomfort with the realities of shareholder capitalism. NSG's purchase of the Pilkington involved the Japanese group exploiting the heavy British focus on delivering value to shareholders. Corporate Japan, meanwhile, has energetically built defences against foreign buyers trying a similar trick on its shores.
Speaking in tongues
Moments after he was annointed the future president of Nippon Sheet Glass, one of Stuart Chambers’s first public pronouncements in Tokyo was an account of his hobbies.
“I like sailing,” he said, “but, unfortunately, I’m a bit short of time.”
To the evident delight of the Japanese press pack — a crowd not known for its warm embrace of foreign chief executives — it was spoken in very passable Japanese.
It was an obvious finesse, but one calculated to please.
Aside from a healthy taste for Japanese cuisine, the two other high-profile foreign presidents of Tokyo-listed companies — Sir Howard Stringer, of Sony, and Carlos Ghosn, of Nissan — have barely made a pretence at going native.
Mr Chambers, who spent the first 15 years of his life in Asia, appears to be trying a different tack. He even told his audience about his new Tokyo appartment, squashing speculation that he will be an absent landlord of his new domain.
But these were garnishes on a deeper message. Although there is clearly much to do if NSG’s creaky internal management systems are to be revitalised, Mr Chambers is not playing up the image of foreigner as blunt object.
Unlike Mr Ghosn and Sir Howard, who implied from the outset that they would need to behave like cudgels before they could become scalpels, the former Pilkington man is playing a more nuanced game.
Mr Chambers’s real crowd-pleaser in that respect was his reference to the 2006 acquisition of Pilkington by NSG — a deal in which Mr Chambers, as chief executive of Pilkington, engaged in a long, Herculean struggle to extract every last penny from the stretched NSG coffers.
As president of NSG — and at a safe distance from St Helens — he now talks with deliberate casualness of the time when “we bought Pilkington”.
For the Tokyo media and their millions of viewers and readers, this simple phrase may set him apart from the other foreign presidents who have been drafted in to run what the Japanese still at heart consider their companies.
The phrase in Japanese was charming, but in the battle for hearts and minds, the “we” spoken in English was the killer weapon.
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