Green Form! Osamu Suzuki Files For Divorce

Bertel Schmitt
by Bertel Schmitt

„It is like being married and getting a divorce. Instead of criticizing each other, it is better to go through it with a smile,” Suzuki’s patriarch chairman Osamu Suzuki told reporters at a hurriedly arranged press conference in Tokyo today. And a divorce it is: Suzuki announced it will terminate its relationship with Volkswagen after a nearly 2 year unhappy and childless marriage.

In a news release, Suzuki announced that “its board of directors has officially determined today dissolution of the comprehensive partnership and the cross-shareholding relationship with Volkswagen AG. “ Here is a short version of the long list of reasons given in the divorce papers (known as the “green form” in Japanese matrimonial matters):

“ Suzuki’s primary aim for the partnership was to receive technology transfer (including receiving technical information, etc.) from Volkswagen AG so that Suzuki could accelerate its development of environmental technology and other engineering areas to cope with intensifying competition of technology development in the worldwide automotive industry.”

“However, Suzuki had to realize that with Volkswagen AG’s minor equity participation of 19.89% in Suzuki, it is difficult to receive technology transfer at the same or higher level as Volkswagen Group companies where Volkswagen AG has nearly 100% of voting rights. From the beginning of this year, Suzuki has been accelerating its development of own environmental technology and other engineering areas.”

“Suzuki thinks that it is crucial to secure “independence” in its operating policy decision for maintaining its competitiveness in the domestic Kei-car market and Asian markets including India. However, Volkswagen AG publicly reported that Suzuki was a ‘company over which Volkswagen AG has significant influence on financial and operating policy decisions’.”

“Taking account of these facts, Suzuki has concluded that it is difficult to attain its primary aim for the partnership and also there is concern that the partnership would cause negative impact on Suzuki’s autonomous decision-making in its operating policy. Therefore, Suzuki’s board of directors has officially determined dissolution of the comprehensive partnership and the cross-shareholding relationship with Volkswagen AG.”

Suzuki will request Volkswagen AG to dispose of Suzuki shares held by Volkswagen AG according to Suzuki’s intention.” If Volkswagen does that, “Suzuki also will dispose of its Volkswagen shares in line with Volkswagen AG’s intention.”

Osamu Suzuki said that his company will buy back the 19.9 percent share held by Volkswagen, and he would happily sell Volkswagen the 1.5 percent Suzuki holds. Suzuki will get a deal if the trade is valued at stock exchange pricing: In December 2009, a Suzuki share went for 2,235 yen. Today, it had dropped to 1,484 yen. The Volkswagen share appreciated only marginally from €81.48 in 2009 to €93.46 today.

The timing of the announcements points towards a behind-the-scenes arrangement and a public kabuki-dance: Volkswagen had accused Suzuki of contract “infringement” shortly before the Tokyo midnight on a Sunday. On Monday by noontime, the Suzuki board had already convened, and calls went out for a press conference at 5pm. Usually, things don’t happen that fast, lawyers and financial advisors get involved and take their old time.

It’s just like in a real divorce: When the wife takes the stand and says “We haven’t had sex for more than a year and I feel abandoned,” a deal has been struck after months of behind-the-scenes warfare.

Once the divorce is in effect, will the Japanese bride say “hai, chikai masu” (yes, I will) to another beau soon? After two failed marriages (one with GM, one with Volkswagen), Suzuki seems to get ready to enjoy its freedom for a while. Says the press release:

“Suzuki has been proceeding with successful business cooperation with domestic and foreign automotive companies without equity relationship. Suzuki believes that if relationship with Volkswagen AG becomes that of “true business partnership” after dissolution of the cross-shareholding relationship, both companies would have good environment where successful cooperation can be built up in fields that both companies gain benefit from.”

I don’t give that “true business partnership” much chances and read the announcement as a “thanks, but after two years of nothing, I intend to sleep around a bit.”

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4 of 21 comments
  • I_godzuki I_godzuki on Sep 12, 2011

    On the day this deal was announced I spoke to a Japanese auto analyst. He told me Suzuki would do the same to VW as they had done with GM. Mess them around a bit, while they own a big enough share to keep other predators at bay. I guess that kinda happened, but the fall out came sooner than planned. The other thing I noted that day was the vast gulf in the thinking of the European and Japanese auto analysts when I read media reports. I guess they were both getting briefings from respective companies and it seemed to highlight the fact that the two parties were coming into this from very different positions.

  • Mike978 Mike978 on Sep 14, 2011

    Link below is for autoextremist's take on the Suzuki/VW issue : Suzuki doesn`t come out of it well.

    • See 1 previous
    • Mike978 Mike978 on Sep 14, 2011

      @Bertel Schmitt If the topic is boring then don`t write about it. I am surprised that someone who worked for VW for so long seems to take the other side. Was VW bad to work for?

  • Chiefmonkey Honda just cuts too many corners. There's no reason why the base Accord should have a 4 speaker stereo lol. It's a $28,000 midsize sedan, not a Mitsubishi Mirage! Not to diss the Mirage it's a great car for what it is. And what's up with Honda's obsession with the dullest most spartan looking black cloth or leather interiors? Literally every other automaker I can think of offers two, three, four possibilities. If I order even the top trim accord in the blue paint, I am limited to a black interior...why???? Strangely, if I order the white paint, the possibilities expand overwhelmingly to two: black, or dentist's office gray (which clashes with white.) There's zero rhyme or reason to it. Just a cheap, corner cutting company.
  • Dartman It was all a scam just to gin up some free publicity. It worked. Tassos go back to sleep; no ones on your lawn. Real ‘murricans prefer hot dogs to gyros.
  • ToolGuy I plan to install a sink in the crawl space soon. After that I plan to put washer and dryer hookups on my roof.
  • ToolGuy "That power team adds an electric supercharger"YES!
  • Cardave5150 UAW is acting all butt-hurt that their employers didn't "share the wealth" when they had massive profits. They conveniently forget that they have a CONTRACT with their employers, which was negotiated in good faith, and which the Remaining 3 are honoring, paying them exactly what they negotiated last time.