The Japanese Are Coming
The Japanese were invading the UK. They were building factories here there and everywhere and the Japanese builders decided they would like to get in on the act. The large builders from Japan were called collectively the seven samurai. The idea they had was that they would do the deals in Japan and then get the local yokels to do the building – with their dynamic ways they would take over UK Cconstruction. The company we were getting involved with was called Takenaka
And so it was in 1986 we got a phone call saying that we had probably one of the new electrical installation at factory that was being built in Worcester. The factory was called Yamasaki. However the was slight amount of negotiation that had to be done before the order could be placed. And so would we fly to Düsseldorf on Wednesday to carry out the negotiation. They said we could catch a plane in the morning and fly back the same day so it really wasn’t a big problem. The project was worth around £750,000 which in 1986 was a big deal.
Our company had a lot of discussions about how we could technically improve the project and if there was anything we could do to reduce the price. We concluded that there were some savings to be made technically but we couldn’t reduce the price. So on the Wednesday morning two of us – that is the director of our Worcester office and myself – drove to Birmingham airport.
We caught the plane and landed in Düsseldorf on time. The taxi took us to an anonymous looking office block that was deserted. We found a room and sat in it awaiting further developments. Half an hour later two other guys appeared. They had also flown in from England and they were due to collect the mechanical contract. The mechanical contract you understand was for things like heating plumbing and air conditioning. We introduced each other and we all firmly agreed that the price that we had given was the best that was available and the Japanese were jolly lucky to enjoy it. By now the time was getting on and it was about 2 o’clock in the afternoon.
We waited for another hour at which point the English person appeared and invited us to join them upstairs. We went upstairs into a meeting room where there was another English person and four or five Japanese. We spent some time discussing lighting fittings and trunking runs on how we can improve things and reduce prices. This resulted in a saving of about £50,000. Everyone was very happy and when the meeting concluded we thought that we could leave. But no my colleague and I were invited upstairs again to an office where a Japanese man sat behind a very large desk. He explained that he needed more savings. I waxed eloquently for several minutes explaining to him that our price was a really good one that we had made substantial reductions and that was as good as it got. Eventually he said, "I will write down a figure that I want you to match." Our figure at this point was around £710,000. He wrote down something like £675,000. I explained again at length that £710,000 was a great figure and I had instructions that that was as low as I could go. However he handed me the pen and look into his eyes and I knew that I had to reduce the price. I wrote £705,000 and handed him back the pen. It was now about 5 o’clock and we were simply ushered into the night.
We found a taxi and asked the driver to take us to a hotel. He took us to the Holiday Inn and we went to the bar. The mechanical contractors also found their way to the bar and we started to drink. We all agreed that we had probably lost the project. So a rational way to proceed was to drink. By midnight after six hours of solid drinking I managed to lurch my way to a bedroom and crashed out. I tossed and turned all night until eventually morning arrived and I could go down to breakfast.
As we went into breakfast we met the English consultants who will also stay in the hotel. They said to us, "Congratulations you’ve won the contract. "
I said," What about the mechanical guys?" The consultant explained that the Japanese had required a reduction which the mechanical people wouldn’t give and hence rather than lose face they had negotiated overnight with another British company with whom they intended to place the order.
The earliest flights back to Birmingham were at 4 o’clock that afternoon. The mechanical guys decided they couldn’t wait that long and caught the 10 o’clock flight to Heathrow.
So we won the contract and surprisingly the job went really well. Well, it did for us. The guys from Takaenaka were clearly out of their depth and spent amazing amount of time working. The biggest indignity a Japanese man could endure was loss of face. A recall to Japan before the job was finished would be the ultimate disgrace.
We did a few other projects with this Japanese company, Takenaka, quite successfully and were successful in winning the new European headquarters for Sony in Basingstoke. The project was a disaster from start to finish. The price of the project had been agreed in Japan and for the builder to stand a chance of making money he cut the height of the building dramatically. This meant there were less breaks bricks required and less steel. However it also meant that the services voids were tiny. There was no room to route the cables required.
The whole project went badly from start to finish. However there was a problem with the Japanese not wishing to lose face. It started when the head office asked how it was going and was told by the builder that everything was on schedule and fine. They asked the pictures should be sent so pictures were sent showing the parts of the building that were complete and missing all of the other parts. A few weeks passed and again headquarters asked how progress was. Again, the site replied all was well. And again the request came please send videos. So they sent videos of the project showing all was well. Eventually a man from Japan flew in and awful truth was revealed. All of the Japanese team were immediately recalled to Japan.
It is very difficult when a project is going badly for everyone involved with the team. I was called to a meeting in central London with Takenaka. The meeting started very late and I was ushered into a room where there were maybe 10 Japanese people and myself. We discussed how much we should be paid for the project at length eventually they put it to me you can either accept £500,000 and will carry on working together or we will pay you £550,000 and you’ll never see us again. I have never received such an ultimatum before. I asked if I could make a phone call and they said yes. I went outside to consider the matter but really there was very little to consider. I had to accept the £500,000. When I went back and said yes the nine Japanese who had spoken no English and claimed they understood none, suddenly became able to talk fluently.
So that ended up being my total involvement with the Japanese. In all dealings it was apparent that their honour was the main thing they were concerned about. Their word whether it is in writing - or not - was their bond. I was left with a feeling of great respect and wishing that our people shared their work ethic. They never took over UK construction and although they still have a presence the losses they took must have been significant. UK construction has always been a broken industry but the Japanese were never going to fix it.