East is East Page 3

  “Recruit,” he said briskly. “See you on the nineteenth.”

  Chapter 2

  “Well, will you take a look at this? Thatcher himself is coming over!” Carl Kruger exclaimed, continuing to commune with himself as he thrust a cable at Bennet Alderman. “Talk about lucky breaks. We’ve got the chairman of the Creditors Committee right up front, and Thatcher will impress the government bigwigs more than somebody they’ve never heard of.”

  Kruger was too wrapped up in his own schemes to wonder about this happy coincidence. As for Alderman, he had no idea what Kruger was talking about. He was a public relations man and a good one, so he merely consulted his watch and said:

  “It’s about time to get started, Carl.”

  Not many corporate heads travel with their own personal publicity specialist, but it was no accident that Lackawanna’s struggle and victory had become powerful symbols. At the very outset Carl Kruger had realized that he could save Lackawanna only by asking many institutions to do things they preferred not to do. Accordingly he had hired Alderman to manufacture a climate in which saying no to Lackawanna was the equivalent of stabbing American industry in the back. Working day and night, Alderman had succeeded to such a degree that by now, sample results showed the American public thought Kruger would make a better President than any politician.

  In line with Lackawanna’s new tradition, Carl Kruger had descended on Japan like a meteor. From the moment of touchdown he had been followed as if he were a major celebrity, right up there with Princess Di. Today, even though Lackawanna was merely hosting a simple press conference, it had been necessary to rent a large function room equipped with translation facilities and upscale refreshments. After seven days of tantalizing hints from Kruger, the usual mob of reporters had been swelled by all the stringers from the worldwide press and crews from every television station in Tokyo.

  As Kruger made his way to the lectern, he stopped to shake a few hands and smile down from his six feet four. Trailing behind, totally overshadowed, was Alderman, thin, bespectacled, and prematurely bald.

  “Can you all hear me in the back?”

  Kruger was relaxed, his voice carrying the assurance that comes from almost five years of public appearances.

  Listening critically, Alderman was joined by another American.

  “You got a great turnout,” the attache said enviously. His own releases about Japanese quotas on Florida grapefruit went from the press pool to oblivion.

  “With Carl, it’s easy,” Alderman replied. “He’s a winner, and people always grab the chance to see him.”

  Every PR man knows he should keep the attention on his client. So Alderman did not mention his own efforts or his impressive track record. But false modesty aside, Alderman was singularly fortunate in his man. First there was Kruger’s background, which distinguished him from the normal corporate nabob. He had graduated from West Point, spent ten years in the army, then left to establish the Kruger Corporation. In addition, he was an imposing physical presence, with youthful blue eyes belying a grizzled crop of hair. Most important of all, he had taken to television like a duck to water. Without this raw material, Alderman could never have painted Lackawanna as a beleaguered outpost and Kruger as John Wayne riding to the rescue.

  Kruger always liked to work his audience up by degrees, and he was doing so now.

  “First of all, I want to thank you for coming to listen to me explain what Lackawanna is doing here and why . . .”

  There were journalists in the room assigned to cover yet another personality, but there were others who knew, quite as well as John Thatcher, that the divestiture of a small firm was not responsible for Lackawanna’s high-visibility trip to Japan.

  “. . . pleased to announce the development of a new generation of robots. In acquiring Midland Research, the buyer gets technology vital to his interests and any further advances from a high-tech outfit based in the Common Market. And all this at a price that’s a real bargain.’’

  He paused to let his audience catch up in its furious scribbling.

  “Some of you are probably wondering if Lackawanna’s getting anything out of this,” he continued blandly. “We certainly are. As part of the overall package, the Yonezawa Trading Company will undertake the distribution of certain Lackawanna products in Japan.”

  Everyone had been waiting for a now-familiar corporate proclamation. Lackawanna would build a new facility in West Virginia with Japanese participation. Either that or Lackawanna would manufacture a new washing machine with Japanese components. Nobody expected Kruger to launch a solitary head-on assault against Fortress Japan.

  There was a collective intake of breath. Then all hell broke loose in a multitude of languages.

  “But that means you want to compete with the Japanese in their home market.”

  “What products are we talking about?”

  “What about opposition to this agreement?”

  Kruger had deliberately arranged this chorus of howls so that he could choose which questions to answer and in what order.

  “The product line subject to this agreement includes our heavyweight basic electrical equipment—generators, motors, industrial circuit breakers.”

  “Does that include the output from your state-of-the-art plant in Oregon?”

  Kruger ignored the reference to the plant. Instead he named the product.

  “Those are our Orion generators you’re talking about. Yes, they’re part of the package.”

  “Then aren’t Japanese manufacturers going to scream?”

  Kruger shook his head gently. “We’re not exactly asking for a free ride. Lackawanna technology will enable the Japanese steel industry to be competitive again. If Japan loses something on one end of the deal, it gains a hell of a lot on the other end.”

  “Are you attacking Japanese trade policy?”

  “Certainly not! I’ve never had any sympathy for those American businesses that whine about Japanese competition and ask for government intervention. The companies that are going to survive are those that are willing to compete with the Japanese. We’ve got to be ready to admit when somebody is doing something better than we are and to learn from them. Lackawanna made a lot of mistakes along these lines, but now Lackawanna is better than ever.”

  Reporters with questions are, however, rarely satisfied by generalizations.

  “Do you think the Japanese would have welcomed you with open arms if they guessed you wanted this kind of deal?”

  “They knew damn well I was coming for some kind of deal,” Kruger returned, smiling. “One of the Japanese traits I admire is their realism. They’ve got a big market. They know people like me want a crack at it.”

  He was gliding over a nice distinction. It was the press that had been conveying every Kruger encomium to Japanese enterprise. It was the press that had rolled out the red carpet. Realism about Kruger’s motives lay elsewhere.

  Nonetheless the press was familiar with its own headlines.

  “Mr. Kruger,” demanded an earnest Japanese, “have you timed your proposal because you think the Recruit scandal will make things easier for you?”

  Kruger shook his head at this wild speculation. “Scientific discoveries—like MR’s robots—make their own schedule,” he explained. “We came as soon as we could formulate a deal so attractive for both parties that it wouldn’t make sense to turn it down.”

  “But the heavy-electrical industry here is already vulnerable to foreign competition. How are they going to react?”

  “Well, I certainly hope they’re not going to start trying to get more special treatment. As I’ve said all along, it’s best for everyone to let honest competition take its toll.”

  The pack seized on one word instantly.

  “Honest? Are you hinting at favors from government members?”

  “Isn’t that the same as exploiting Recruit?”

  With questions being hurled at him from all sides, Kruger slowed the tempo of his response. As a result,
he sounded like the only reasonable man in the room.

  “You’re talking about glitches in the political arena, and I’m talking about long-term economics.”

  “But your long term has come at a pretty convenient time.”

  “The convenient time,” Kruger said, unruffled, “is when you can put a deal together. And all Lackawanna ever asks is a level playing field.”

  Bennet Alderman, listening intently, was learning a great deal. Politics and personalities always meant more to him than turbines and circuit breakers. But suddenly Alderman realized that he was working for a man willing to take big risks.

  It was something worth remembering.

  * * *

  Other members of the Lackawanna family had made that discovery a long time ago. Two of them, Don Hodiak and Pamela Webb, were in one of the Tokyo Hilton’s lounges that evening. The TV over the bar was bringing them the Carl Kruger they knew so well.

  When the Recruit scandal emerged, Hodiak groaned aloud. “God almighty, I’m sick of that name.”

  “If you feel that way, think of how the Japanese must feel,” Pamela retorted. “And you have to admit, Carl’s doing a beautiful job. He’s mentioned the benefits to the steel industry at least three times. And he’s skated over the tricky parts.”

  “I only wish he’d done as good a job selling me,” Hodiak said. “Even if this is a great idea in itself, how am I supposed to hammer out a sensible distribution system with this kind of scramble? Basically we’re relying on the competence and good faith of a Japanese company we don’t know anything about.”

  “We may not know anything about them, but I’ll bet Carl has been quietly dickering with Yonezawa for months. Besides, how would you like to try selling over here without them?”

  He was not in the mood for questions to which they both knew the answer.

  “That would be suicide,” he acknowledged grumpily. “But you don’t rush into unloading subsidiaries because you get an unexpected market break.”

  “It’s a lot more than that, and you know it, Don. This may be the one moment in time that the local opposition can’t tank right over Lackawanna.”

  Seeing he was unconvinced, she ended more lightly. “Don’t let eating all this rice get to you. We really do have a solid deal going.”

  “That remains to be seen,” he replied. “But I’ll hand you this, Pamela. You make a better case for Carl than Carl does.”

  They were a study in contrasts. Hodiak, a heavyset sixty-year-old, bore the marks of chronic anxiety. A longtime Lackawanna production expert, he was a company man to the core. No one valued Kruger’s lifesaving results more than he did, but he was too much a traditionalist to appreciate the razzle-dazzle.

  He was not too hidebound, however, to accept Pamela Webb, even though she represented one of Kruger’s more radical innovations. A stunningly photogenic blonde who had yet to see thirty, she had risen to become Lackawanna’s chief financial officer and Carl Kruger’s closest confidante. Speculation about their intimacy was widespread, and articles about Lackawanna always featured a photograph of the two of them boarding an executive jet or emerging from a hotel. Pamela herself responded to the publicity by working hard and maintaining her composure, but she appreciated Don Hodiak’s uncomplicated willingness to judge her by results.

  “Say, where’s Ali?” Hodiak asked suddenly. “I feel sorry for that kid, wandering around at loose ends.”

  Ali Khan was the wizard responsible for Midland Research’s technical breakthrough. He had been summoned from England to support Kruger’s mission, but his skills were confined to electronic engineering. Business sessions proceeded without him, and so far, his time had been his own.

  “He’s seeing Tokyo,” Pamela replied indifferently. “After all, he’s an Asian. It’s probably very meaningful to him.”

  “In a pig’s eye!” Hodiak guffawed. “Ali was born and bred in Birmingham, England. He’s about as Asian as I am.”

  She acknowledged the point with a shrug. “Then he’s playing tourist. Thousands of people pay good money to visit Japan.”

  “They don’t do it alone. Hell, the poor kid doesn’t even drink.”

  “What makes you think Ali’s doing it alone? He’s a very good-looking boy, or,” she asked with a challenging lift of the eyebrow, “don’t you notice that sort of thing?”

  Hodiak grinned good-naturedly. “It may surprise you, Pamela, but twenty years ago, when I had a lot more hair and a lot less weight, I knew all about that sort of thing. If Ali’s found himself a girl, I say good luck to him. But it doesn’t look like it to me.”

  He nodded toward the entrance of the bar, where a tall, lithe young man had halted to inspect the gloom. When Khan finally located his colleagues, a brilliant smile lit his dark-skinned face, and he moved toward them with the grace that accompanied all his movements.

  “I was shopping in the Ginza, and the TV sets were on,” he announced. “Do you know who I saw?”

  “Give us three guesses.” Pamela laughed.

  It was Hodiak who explained the Kruger press conference.

  “Well, it doesn’t make much sense to me,” Ali confessed unconcernedly. “Of course I understand why they want my robotics, but I don’t see how it’s going to help Lackawanna sell American machinery in Japan.”

  “You,” said Don Hodiak, “and a whole lot of other people.”

  Among those who understood exactly what Carl Kruger was up to were Japan’s elected representatives. Two of them watched Kruger’s performance with an eye to their own interests.

  “The man is clever,” the first conceded. “He said over and over that his proposals were attractive to both parties because the steel industry will get its technology and Lackawanna will sell in Japan. He never admitted there was a third party, our own electrical industry.”

  “He has probably convinced half the nation that he is suggesting a rational and mutually profitable arrangement. And what will the result be?”

  The question was rhetorical, but it was answered.

  “If we lift a finger to protect the electrical people, our own press will suspect corruption.”

  Two wily heads cocked in thoughtful silence. Then:

  “On the whole, I think the entire problem should be left to MITI.”

  “I agree.”

  But the speaker could not maintain the lofty note.

  “I only hope,” he added bitterly, “that they do not regard themselves as so far above the battle they fail to recognize exactly how sensitive this situation is.”

  There was no danger.

  The Ministry of International Trade and Investment—or MITI, as it is known around the globe—is as distinctively Japanese as Mount Fuji. Nowhere else in the free world is there a single agency so widely empowered to create and implement economic policy. MITI regulates business practices, enforces industrial coordination, and guarantees that domestic and international commercial activity conform to its national goals. Nothing is too large or too small for its consideration. Rice farms and the Toyota Motor Corporation alike fall under its purview. Widely credited with having masterminded the Japanese miracle, MITI is regarded with respect bordering on awe.

  Formally, MITI’s staff was composed of civil servants. In fact, they were an elite beyond the dreams of Washington or Whitehall. Amid the scandals convulsing Japan, they strode, untouched and impregnable, like the aristocrats they were. One of them, Tomaheko Matsuda, was presiding over the Midland Research application. He knew that he had been presented with both a great danger and a great opportunity. The result of his actions could be either a career setback or a golden future.

  Therefore he studied Carl Kruger’s press conference with a critical acumen that exceeded any other viewer’s. If Kruger succeeded in beaming the spotlight of public attention on a MITI hearing, then Tomaheko Matsuda intended to showcase his own talents. Everyone, from the Prime Minister down, would witness a display of painstaking attention to detail, consummate mastery of all factors, and
scrupulous impartiality.

  Matsuda never doubted that he was up to the task. Others in his office, however, were not.

  “This report of yours, Ushiba, is unacceptable,” he said coldly the next morning, “It is nothing more than a précis of the material supplied by the interested parties. I should not have to remind a man with your years at MITI that we judge on the basis of our own research. Our specialists have performed their separate analyses. It remains only for you to utilize them and integrate their results into your final treatment.”

  The subordinate bowed too deeply, then broke into fulsome apology.

  “I will have an exhaustive study ready for your next session,” he promised in conclusion.

  “I shall expect it on my desk.”

  Both men spoke in the even cadence of established ritual. Each turned an impassive face to the other. But in that instant, twin decisions were born.

  Matsuda had realized for some time that the obsequious Mr. Ushiba was lazy and incompetent. He had always been an irritant; now he was a peril. Ushiba would have to be shipped to some distant outpost of MITI.

  Tomaheko Matsuda was in almost every way the more intelligent and perceptive man. But in one minute area, Ushiba was the more experienced. His ineptitude had been noticed before. During the past ten years Ushiba had been posted to every single department of MITI. By now he had developed a sixth sense for recognizing when his superiors arrived at the moment of truth. And he was tired of annual transfers. Behind his expression of dutiful receptivity, Mr. Ushiba vowed to bestir himself into uncharacteristic activity.

  This time he was staying put, no matter what he had to do.

  Chapter 3

  High over the Pacific, John Thatcher had ample time to digest Carl Kruger’s game plan. Instead of a run-of-the-mill transaction, he was hoping to score a touchdown in the Japanese market, with Yonezawa Trading Company running interference. On the whole, Thatcher wished him nothing but luck. If the gamble paid off, Lackawanna would make bigger and better profits. And if it did not, the failure would be cost-free for the company’s creditors. Lackawanna’s domestic activity was their real collateral.