Yokohama Electron 12
[Breaking News] Yokohama Electron China chief dismissed!
[Chief Rupert Liu threatens to sue the board!]
[Conflict erupts over Yokohama Electron’s China subsidiary]
[What impact will this have on the acquisition?]
The dismissal of Yokohama Electron China’s chief was a major story.
Rupert Liu claimed the removal had not been carried out legally and filed for an injunction and a lawsuit in court.
He pointed out that the dismissal paperwork did not bear the company seal.
The reason was simple: Rupert Liu himself had the seal.
To remove Rupert Liu as chief, the documents had to be stamped with the company seal. But if the chief refused to hand it over, there was no way it could be stamped.
On that basis alone, he argued that the board’s decision was invalid.
In any case, anyone could claim a firing was unlawful, and lawsuits were hardly rare.
And since the results of a lawsuit took a long time to emerge, experts predicted that this incident would have only a limited effect on the acquisition.
But the matter took a turn no one had expected.
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Yokohama Electron supplied and managed equipment for semiconductor companies all over the world.
For that reason, it maintained subsidiaries in every country that had semiconductor factories. Yet there was only one factory outside Japan.
It was in Shanghai, China.
Thanks to China’s drive to dominate semiconductors, Yokohama Electron China had grown at a blistering pace and even surpassed headquarters in sales.
Wang Qinglin had worked at that factory for more than ten years and had now risen to a managerial post. While learning the trade, he had also become close with many Japanese engineers.
Recently, the Chinese semiconductor market had been nothing short of booming. Orders were backed up for three years, and the factory ran without pause.
But anxiety had begun spreading among the workers.
“Is the company being sold to the U.S. and Taiwan?”
“Was Liu really dismissed?”
“I heard there’s going to be a lawsuit...”
“What happens to the China factory?”
“What are we supposed to do?”
With the sale of headquarters and the dismissal of the chief happening at the same time, the atmosphere inside the company had grown tense and unsettled.
“Stop talking nonsense and get ready to work.”
Wang Qinglin tried to calm the workers, but he felt the unease just as keenly himself.
If they start restructuring, we’re in serious trouble.
He was in the middle of a quick pre-shift briefing when a group of men suddenly stormed into the factory.
“Get all the foreigners out!”
“Hey, wait!”
“Who the hell are you people?”
The rough-looking men immediately began dragging Japanese managers and engineers out by force.
Everyone was stunned by the sudden chaos, and then, as if they had been given advance instructions, union officials began moving through the factory, gathering the workers into one place.
“What the hell is going on?”
“Who are those guys?”
“They don’t look like public security...”
Wang Qinglin was just as bewildered.
As thousands of employees gathered, Rupert Liu appeared. Standing before them, he said, “As all of you know, Yokohama Electron has been sold to Enple, PSMC, and the Kionos consortium. They intend to do whatever they want with the China subsidiary. Despite repeated requests, headquarters never approved expansion of the China factory. That was because they planned to shut down the China plant and move production to the United States and Taiwan. When I opposed that, they framed me with absurd accusations and drove me out of the company. Once the sale negotiations are finished, the China plant will be shut down gradually as well.”
At his words, the workers, Wang Qinglin among them, fell into shock.
“They’re shutting down the factory?”
“N-no way.”
“How could they...?”
They had known the headquarters was being sold.
But to think they might shut down the China factory!
This was the first they’d heard of it.
If that happened, thousands of jobs would vanish overnight.
Rupert Liu looked over the workers and said, “The Chinese people built this factory on barren land and produced these products through their sweat and labor. All along, we’ve done everything we could for Yokohama Electron China. And yet they want to take all of this away and hand it over to the United States and Taiwan. So I ask you this here and now: what country does Yokohama Electron China belong to? Is it a Japanese company?”
Some workers shouted as if to stir the crowd. “No!”
“Is it a Taiwanese company?”
“No!”
“Is it an American company?”
With every question, the workers’ voices grew louder.
Wang Qinglin shouted too, at the top of his lungs. “No!”
“Then what country’s company is it?”
And all the workers answered together.
“A Chinese company!”
Rupert Liu shouted as well. “That’s right! Yokohama Electron China is a proud Chinese company, located in China and staffed by Chinese workers. No one can take our factory away from us! I declare it here and now: I will protect this Chinese factory, the jobs of the Chinese people, and this Chinese company. Support me, everyone!”
At that, the Chinese workers raised both hands and roared, “Waaah! Long live China!”
“Drive out all the foreigners!”
Come to think of it, Rupert Liu himself was a foreigner without Chinese nationality.
But no one pointed that out.
“Liu! Liu!”
Rupert Liu hired private security guards to block Japanese executives and workers from entering the factory and offices.
Then he had all the data on headquarters’ servers downloaded and moved to a Chinese server.
That included every patent Yokohama Electron had filed, information on products still under development, and the full lists of clients, shipment values, requirements, and every other piece of confidential company data.
Yokohama Electron had always taken security seriously, to the point that it wouldn’t even allow investors or analysts to tour the factory.
For some of its core technologies, it had refused to file patents at all out of fear they would leak.
And now that data had been transferred wholesale to the China subsidiary.
Corporate technology was not limited to patents.
The know-how behind using that technology was technology too.
And after operating a factory in China for more than ten years, Yokohama Electron China had already learned all of that know-how long ago.
So even if the tie to headquarters was cut, there was no problem running the factory.
On the contrary, they cut off headquarters’ accounts and blocked access to the China subsidiary’s servers and bank accounts. Transfers back to headquarters were also completely stopped.
Having succeeded in taking control of the company, Rupert Liu issued a statement.
We hope the board will not interfere with the company’s operations or harm the lawful rights and interests of its employees.
Yokohama Electron China is a joint venture under the control of the Chinese government, and as such it must comply with Chinese law and fulfill its social responsibilities to China.
(truncated)
We also ask the Chinese government and the Chinese people to pay attention to the turmoil facing Yokohama Electron China and to extend their support.
We refuse Softbox’s control and will develop independently.
This was a declaration of independence for the China subsidiary.
At this point, Yokohama Electron was practically split in two!
As if answering that declaration, 7,300 Chinese employees and executives also released a joint statement.
We have confirmed that there is a grave legal defect in the Yokohama Electron China board’s dismissal of Chief Rupert Liu. Accordingly, we strongly support Chief Rupert Liu in filing an administrative dispute in accordance with the law to protect his lawful rights.
(truncated)
Under Rupert Liu’s leadership, we will move forward on the path of independent development, build Yokohama Electron China into a great Chinese semiconductor technology company, and work together to contribute to China’s semiconductor industry!
We urge the relevant Chinese authorities to step forward, protect China’s strategic assets and core interests, and resolve this dispute quickly!
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Chairman Nakazato, after receiving a report from the executive dispatched to China, collapsed foaming at the mouth.
Softbox Group Chairman Song Gazuki was just as shocked.
In the middle of acquisition talks, the China subsidiary had declared independent management!
He had spent decades in investing. Even in all that time, he had never encountered anything this absurd.
Chinese revenue accounted for more than half of Yokohama Electron’s total sales. If the China subsidiary broke away, both revenue and production would be cut in half.
Song Gazuki reached out to China’s senior leadership to resolve the crisis.
He was a major shareholder in Jinibaba and Dadachuxing, and a heavyweight in China’s tech industry. Chinese politicians had long made an effort to cultivate friendly ties with him, and whenever he came to China, he was treated with great hospitality.
But now, as if they had all received orders from above, everyone avoided his calls. And when someone did pick up, they hung up quickly, citing some urgent matter.
After several attempts, he finally managed to get through to Mayor Zhou Liangyu.
He was the mayor of Shanghai and also the deputy secretary of the Shanghai Municipal Party Committee. Holding a doctorate in economics, he had played a major role in bringing the factory to Shanghai when Yokohama Electron first explored entering China.
“What is it?”
“You’re surely aware of the situation now unfolding at Yokohama Electron China.”
Mayor Zhou Liangyu replied calmly, “We are also in a very difficult position because of that matter.”
“Are you saying the Shanghai joint venture has nothing to do with this?”
“Of course. Headquarters demanded the dismissal, and the Shanghai joint venture did not comply, did it?”
“That is...”
He could not say it was wrong.
In fact, the Shanghai joint venture had voted in favor of Rupert Liu’s dismissal. The only problem was that the chief was refusing to go.
But Yokohama Electron was indispensable to China’s semiconductor industry.
If anything happened to the China factory, the Chinese semiconductor companies would be hit hardest. That meant it was impossible for something like this to happen without the Chinese government turning a blind eye.
And yet they’re claiming they have nothing to do with it?
“Even if the lawsuit over the dismissal is one thing, private security is now being used to illegally occupy the factory and offices. Shouldn’t the authorities step in?”
Mayor Zhou Liangyu let out a breath and said, “I understand Chairman Song’s position very well. But Rupert Liu is not Chinese; he’s American. Isn’t it difficult for the Chinese authorities to intervene in a problem caused by an American inside a Japanese company?”
“No...”
Since when had China ever cared about something like that?
As a communist state, China controlled every company inside its borders. Foreign companies were no exception.
How many foreign firms had packed their bags and left China over government intervention?
If this incident had been judged harmful to China, public security would have been dispatched immediately to contain it.
And the fact that they were staying still suggested there was some agreement behind the scenes.
Otherwise, Chief Liu would never have been able to pull this off.
“So this is the party’s position?”
“I’m not sure I understand what you mean. In any case, the Chinese government and Shanghai Municipality have no intention of intervening in this incident.”
“……”
Song Gazuki thought back to the time Yokohama Electron had first entered China.
Chairman Nakazato had fiercely opposed the plan to build a factory in China.
It was partly because he believed Japanese products should be made in Japan by Japanese people, but his biggest concern was that technology would leak outside.
Yet when land prices, labor costs, government support, and relationships with clients were taken into account, building in China rather than Japan was overwhelmingly advantageous.
In the end, Yokohama Electron built its first overseas factory in China.
After that, the China subsidiary’s sales exploded, and Song Gazuki believed his judgment had been right.
But now...
He had no choice but to admit he had been wrong.
That decision had produced the worst possible outcome.