Chapter 186 - Name and Reality 109 {137 Alone} (328 Alone: Oshima's Last Will 3 - The Darkness of JNR Privatization and Division)
"JR is doing reasonably well, isn't it? I believe JR East completely privatized this year after the government sold off its remaining shares?"
Nishida spoke those words, but—
"What are you talking about? There has never been a privatization so distorted!"
Oshima immediately cut him down.
"But service has clearly improved compared to the JNR era, strikes have disappeared, and as a user, I think it's a great success..."
Yoshimura remained unconvinced, though he was careful with his tone toward Oshima.
"I can certainly understand your point on that front. Toward the end of JNR, strikes were rampant, staff attitudes were poor, and the decline in service due to the 'Oyakata Hinomaru' (T/N: 'The Government is the Boss'—a mindset of bureaucratic complacency) consciousness was becoming manifest."
Oshima spoke with a deliberate, slow pace as if suppressing his rising emotions, but then continued as if that composure had never existed.
"However, the reality is that the collapse of JNR itself was caused less by the union movement and more by the factor of unplanned political maneuvers since the post-war era. We politicians engaged in 'Gaden In-tetsu' (T/N: 'Drawing tracks to one's own field'—a play on the idiom 'Gaden In-sui' [drawing water to one's own field], meaning acting out of self-interest) (Author's Note 1: Explained below) for the sake of local votes, demanding the state lay down railways even in areas where they weren't profitable (Author's Note 2: Explained below). At the same time, we launched a barrage of political actions that ignored JNR's management, such as excessive road development in rural areas to encourage the spread of cars. The development of expressways was also poorly handled... Setting aside major metropolitan areas, if you over-develop roads in the countryside, it naturally encourages the transition to a car-centric society, and it's obvious that rural lines, which can only offer mediocre schedules, will decline further. Although the proliferation of lines in Hokkaido and their subsequent abolition as deficit-ridden local lines wasn't due to my demands given the timing, I naturally bear a share of the responsibility. Regarding railways alone, Kaito-sensei might also bear responsibility given the era. Of course, as a member of the 'Road Tribe' (T/N: politicians with strong ties to the construction industry), even though I didn't much support the extension of expressways in Hokkaido, I cannot escape significant responsibility for road development as a whole. However, in the case of Hokkaido's railways, even before the issues caused by road development, there were many lines where the population along the route was simply too small..."
At this point, although Oshima glossed over the end with an excuse-like statement, his tone was filled with considerable bitterness. Whether the policy mistakes Oshima considered were due to Isaka's blackmail, or meant to provide benefits to support groups and construction companies in his voting base, it was clear that he personally found them regrettable.
"But that's not all. After the war, the state forced JNR to absorb the surplus labor force of returnees from overseas and the battlefields (Author's Note: I will touch on this shortly, but to be precise, it was the 'State-Owned Railway' at the time). It is certain that the rising labor costs due to the seniority system of the workers hired then squeezed JNR's finances (Author's Note 3: Explained below). Since it had already developed a deficit-prone structure by Showa 39 (1964), it would be correct to see the frequent strikes thereafter as something that accelerated the deficit management, rather than being the primary cause. In the first place! The reason the labor unions ran wild also lay in the problems of the state's policies (Author's Note: I won't go into detail here, but this refers to the so-called 'Maru-Sei Movement'). Furthermore, the politicians were almost unable to implement fare hikes—which would be unpopular with the public—immediately after the deficit began, and the management situation gradually worsened. Finally, privatization was put on the table, but to improve management efficiency, large-scale rationalization was carried out in Hokkaido and Kyushu. This was undoubtedly intended not only for management efficiency through personnel reduction but also to weaken the labor unions that had rioted during strikes. Furthermore, the Nakane Cabinet of the time had the ulterior motive of dismantling the voting base of the then-opposition Shakyou Party (Author's Note: In reality, as you know, the Socialist Party), which was tied to the labor unions. The folly of introducing 'division' in addition to privatization was, in a sense, that motive running wild. NTT split into two companies, East and West, three years ago (Author's Note 4: Explained below), but even then, it's only two. To go out of one's way to divide JNR into six (seven, to be precise, if you include JR Freight), and moreover, to make Hokkaido, Kyushu, and Shikoku independent (Author's Note: the so-called 'Three Island Companies') despite their dire management situations—I can only describe it as a decision that bordered on madness even by the standards of the time. As if to atone, they tried to provide management assistance through something called a Management Stabilization Fund, but since the privatization and division plan itself was established during the bubble period, it seemed to have some success during the bubble. However, after the bubble burst, the situation became far more severe than the outlook of the time, including operational aspects like the interest rates of the Management Stabilization Fund. This is particularly prominent with JR Hokkaido. If Tamura no Maru-san (Author's Note: Modelled after Tanaka Kakuei) had been healthy, he probably wouldn't have allowed it to go as far as division, but as his influence waned due to ill health, Nakane ran wild... In the future, the Three Island Companies will become unable to maintain their lines, the local residents' means of transport will vanish, and depopulation will progress further. I see a high risk that our own JR Hokkaido will fall into a crisis regarding the survival of the company itself. Some JRs profit extremely well, while others are conversely discarded. Even if it is said that this was the essence of that privatization and division, it was truly an unavoidable consequence of that method. And if the result is the loss of regional transport, then as a matter of the livelihood and security of citizens living in rural areas, the privatization of JNR as a public transport institution can only be described as putting the cart before the horse."
[Author's Note Summary]
○ Author's Note 1
It is famous that the construction of the Joetsu Shinkansen was related to Tanaka Kakuei, who was elected from Niigata. Similarly, although the Tohoku Shinkansen was initially planned only up to Sendai, it is well-known that former Prime Minister Suzuki Zenkou, who was mentioned in this novel, had it extended to Morioka in his home prefecture of Iwate. https://news.yahoo.co.jp/feature/705 The source is quite interesting for looking back at the political and bureaucratic history of post-war Japan, so please take a look. Incidentally, the son of this Aizawa Hideyuki married Aida Shoko, formerly of WINK. By the way, the 'Aida' surname of the 'Boss' (Izumi) was actually taken from this Aida Shoko.
○ Author's Note 2
To be precise, since the establishment of the former Japan Railway Construction Public Corporation (founded in 1964, dissolved in 2003), the basic structure was that the state handled railway construction and JNR handled the subsequent management. However, there are some railway lines that JNR itself constructed, such as the Tohoku Shinkansen up to Morioka.
○ Author's Note 3
As mentioned previously in the retrospective monologue of Tanaka Kiyoshi, a friend of Okuda, immediately after the Japan National Railways (JNR)—a self-supporting state-owned enterprise—was established from the previous state-run railways in June of Showa 24 (1949), a large-scale layoff of nearly 100,000 people was carried out.
○ Author's Note 4
To be precise, there are several other business entities, and the collection of these under a holding company is referred to as the NTT Group.
The following is a note regarding the entirety of this text on a different subject:
In the privatization of JR, the policy of division was pursued with the ostensible goal that "division allows for management closely tied to the region." However, dividing it while ignoring the profitability of the owned lines (especially regarding the Three Island Companies which do not own the 'cash cow' Shinkansen lines. Though to be precise regarding the Shinkansen, until 1991, the 'Shinkansen Holding Organization' leased the lines to JR East, Central, and West. After that, the lessees came to own them directly, which continues to this day) was, no matter how you look at it, a massive failure.
Rather, it seems highly likely (this is strictly my speculation) that there was an intent to favor the corporate management of specific JR companies. In particular, the raison d'être of JR Central (which has an unusually advantageous management base compared to its operating line distance) is likely an issue. Incidentally, although JR Kyushu followed JR East, Central, and West in listing its shares in 2016, its railway business is completely in the red; it only shows a surplus because the real estate business supports it. In fact, railway operations outside of urban areas are on a downward trend.
Immediately after privatization, JR Hokkaido also made management efforts, such as developing resort trains (which are popular now), speeding up intercity transport, and more recently, the station building redevelopment project at JR Sapporo Station. However, Hokkaido's lines are centered on Sapporo, and the sections where residents along the lines are sparse are extremely long. Combined with the necessity of snow removal in winter and the rapid aging of railway facilities and vehicles due to annual temperature changes, the environment is extremely harsh—or to put it bluntly, impossible—for a profit-oriented railway business.
The issue of the power balance between the labor unions belonging to JR Hokkaido and the JR Hokkaido management is often cited as a management challenge. While this is closely related to aspects like safe operation, to be honest, it is no longer related to fundamentally improving management performance (as the number of employees has been steadily decreasing since the transition to JR. This is not an official document, but I will refer to a personal blog as one source: http://fortysonseason.blog.fc2.com/blog-entry-2188.html). Rather, the negative effects of the number of employees decreasing too much are even appearing in the maintenance of safe operations, so it could be said that they have exceeded the limits of rationalization.
In any case, since the number of employees has decreased significantly (nearly halved) since the time of privatization, JR Hokkaido's plight is not a matter of personnel costs. Furthermore, because the Management Stabilization Fund did not function as originally planned due to low interest rates following the bubble's collapse, and the population decline within the prefecture has far exceeded initial predictions, the most accurate assessment is likely that the political and administrative side "completely misjudged future predictions" or "intended to discard them in the future from the start."
Also, regarding the privatization and division, there were politicians within the LDP who took the stance that while they accepted privatization, they would not allow division. The representative of this was Tanaka Kakuei (treated as 'Tamura no Maru-san' in the text instead of 'Tanaka no Kaku-san'), who had been exercising power from the shadows since the Lockheed Incident.
However, it is also said that because he collapsed due to poor health, the Nakasone Cabinet was able to execute the division. Looking at the current disastrous state of JR Hokkaido and JR Shikoku, I think it is safe to conclude that a two-way split between East and West or a unified privatization would have been best.
Incidentally, regarding the goal of weakening labor unions and political maneuvering, the Prime Minister at the time, Nakasone Yasuhiro, subsequently confessed to this (in the December 2005 issue of 'Bungei Shunju' and stated clearly several times in television interviews, etc.), so this is not speculation but a simple fact.
Furthermore, as for the reason why JR Central—which I previously mentioned has a 'mysterious raison d'être'—was established as a geographically strange 'entity,' it was originally planned that JR West would manage the operations of the Tokaido Shinkansen. However, because that would have made JR West more advantageous compared to JR East, the Minister of Transport at the time (equivalent to the current Minister of Land, Infrastructure, Transport and Tourism), 'Mitsuzuka Hiroshi' (who was the head of the 'Mitsuzuka Faction' that supported the Seiwa-kai), is said to have put a stop to it.
Since JR Central's former president and current chairman, Kasai, recorded this in his memoirs, it is likely a fact. It is said that because Mitsuzuka was a member of parliament elected from Miyagi Prefecture, he emotionally disliked the idea of the West Japan side becoming advantaged. If that is the case, then one additional company was created for a truly trivial reason. I personally look with suspicion at whether a different 'reason' (namely, favoring JR Central in policy—which I cannot help but suspect given former President Kasai's current position in the economic world) existed here. In any case, even taking only the known facts, one can glimpse a part of how the privatization and division here had turned into political maneuvering (not for the sake of the citizens).
Additionally, it is ironic to note that JNR was actually turning a profit at the very end, after the decision for privatization and division had been made. However, considering the elimination of the accumulated deficit up to that point and the decline in service, privatization was likely unavoidable. Incidentally, JNR's debt itself was taken over by the Settlement Corporation.
Other things described in the novel became a bit too cluttered in relation to the dialogue, so for a summary of the flow of JNR's privatization:
http://www.itmedia.co.jp/business/articles/1704/07/news021.html
might be easy to understand.
Regarding the 'Management Stabilization Fund' for the Three Island Companies:
http://www.fromhc.com/column/2011/10/jr-1.html
is useful for reference.