A former Boeing executive confirmed this when we spoke this week. After asking not to be named because of the diplomatic fragility of the topic, he said: “Let me put it this way: we knew the Japanese market would be Boeing’s in return for our selecting these Japanese partners. It was a silent understanding, and there was nothing in writing.” He added that Boeing’s Japanese suppliers had received low-interest loans from the Japanese government repayable only out of future profits.
Although the Japanese airlines and suppliers are independent companies, “in Japan there’s a unique relationship between the airlines, the suppliers and the government,” according to the former Boeing official. “It’s cultural. The officials all went to the same schools and have close personal relationships. The government supported the airlines and the industries and they developed together. The government has enormous influence. They all work together.”
As a Boeing vice president and former Boeing Japan president, Nicole Piasecki, told the company magazine in 2008: “These aren’t just relationships with people in business. The Japanese government is a powerful and important part of all economic activity and industrial development. So part of relationship building is negotiating these two important spheres of influence in Japan and understanding it’s all tied together.”
Mr. Aboulafia agreed that Japan was unique. “This is the way things used to be in the days before free trade,” he said. “Japan is the last unreconstructed believer in industrial policy writ large.” . . . .