Tokyo: Privatized Japan Post gets new business model

Japan Post will be divided into a holding company and four operating firms handling postal delivery, customer service, postal savings and postal insurance.

Kitamura was the president of the Italian subsidiary of Toyota. for 10 years until June 2006, when he was urged to take the Japan Post position by Toyota's former chairman, Hiroshi Okuda, then a member of the Council on Economic and Fiscal Policy.

"I didn't know much about the political situation at that time. But I guess Okuda recommended me to [then Prime Minister Junichiro] Koizumi," Kitamura said in an interview with The Daily Yomiuri.

Kitamura, 65, spent his entire career at Toyota since graduating from Kagoshima University until he left Italy for the Japan Post job in October 2006.

Italy, the home of Fiat, the maker of Ferrari and Alfa Romeo, had been a stronghold for European cars, and Toyota Italia was only selling 15,000 cars a year until Kitamura took the post at the Italian subsidiary.

In 10 years, Toyota Italia increased sales to 138,000 a year, which accounted for 5.9 percent--ranking fifth after Fiat, Ford, Opel and Volkswagen--of the Italian market. Deregulation on import restrictions of foreign cars pushed Toyota's sales in Italy as well as Kitamura's way of management.

"The cultures of Italy and Japan are different, and the way Italians think is also different from Japanese. Japanese work for the future, while Italians work for themselves," he said.

According to Kitamura, Japanese carefully prepare before starting something, while Italians are more willing to improvise as they go along.

"Sometimes good ideas come out of the Italian way of doing things," he said. "So I took in some of their ways.

"Italians are generally very proud, thus they're afraid to fail. I gave them chances to try something new, but didn't blame them for mistakes. As a result, the firm's culture changed, and everyone did their best."

The approach is applicable to the privatized firm as his mission is to change a governmental organization's culture into that of a private company, Kitamura said.

"Japan Post employees haven't had to think of ways to increase sales. All they had to care about is maintaining universal services. I have to make sure the employees have a positive attitude, the same as I did in Italy," he said.

In the fiscal year that ended in March 31, the total operating income of Japan Post was 19.6 trillion yen. Income from postal delivery was 1.9 trillion yen, an increase of 3.3 billion yen from the previous fiscal year due to increased shipments of small packages and international mail. However, the total quantity of domestic and international mail and packages has decreased over the past five years.

"What I have to do is clear: Stop the downward trend and recover the business," Kitamura said.

Japan Post established a joint venture with All Nippon Airways Co. in February 2006 as the first stage of the international distribution business. ANA & JP Express Co., in which Japan Post took a 33.3 percent stake while ANA took 51.7 percent, began operations in August the same year, mainly handling freight between Japan and China.

- By Takahiro Tsujimoto

The Daily Yomiuri

Publication Date: 17-09-2007