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Holterhoff Mary
Hopkins Dick
FWD: FWD: PROJECT HORIZON: ICL/FUJITSU VIEWS
26/01/1999 14:09
DR HOPKINS
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>>SUBJECT: PROJECT HORIZON: ICL/FUJITSU VIEWS
>>1. ICL Chief Executive calls after discussions with Fujitsu,
>>Describes latter's dismay, risk to ICL's flotation, and of Fujitsu's
>>disengagement from ICL if Project Horizon fails. I believe the last
>>risk is real.
>>
>>DETAIL
>
>>2. At his request, Keith Todd, Chief Executive of ICL, called on me
>>on Saturday 23 January (with Don McGarva, the local ICL
>>representative) after talks with the Fujitsu President. He
>>expressed Fujitsu's quote complete disbelief and lack of
>>understanding at HMG's decision-making process unquote. Fujitsu
>>could not comprehend how HMG could contemplate quote destroying ICL
>>unguote. If the project failed, the flotation of ICL would be
>>undermined and Fujitsu would reconsider all its options on ICL.
>>This might, according to Todd, include sale.
>>
>>3. Todd pointed out that the ICL purchase and the injections of
>>capital into it by Fujitsu had very much been the baby of Yamamoto
>>(the previous Fujitsu Chairman) and Naruto (presently Vice Chairman
>>and Chairman of ICL). The new Fujitsu President, Akikusa, and
>>Chairman, Sekizawa, were adopted parents, and their commitment to
>>the continuation of ICL could not be taken for granted. (Comment:
>>My own knowledge and experience of Sekizawa confirm this.)
>>
>>4. Todd also thought that, at a time of general Japanese corporate
>>financial weakness (including Fujitsu), ICL had to make itself
>>independently wealthy. The recent results had been good and the
>>future was promising. But the danger to ICL's future in remaining a
>>subsidiary of Fujitsu was that they might be broken up or sold. He
>>repeated that a failure of Project Horizon would undermine flotation
>>and would result in 700-900 job losses.
>
>>5. I undertook to pass Todd's message on to those concerned in
>>London.
>>6. I of course remained in listening mode for Todd's description of
>>the state of the project. I believe, however, that his analysis of
>>Fujitsu's position is accurate. I have received orally and on paper
>>from Naruto a clear message that the company does not understand
>>HMG's hesitation. Relations between us and Fujitsu are already
>>damaged. Even if Project Horizon is now agreed - as I very much
>>hope - we will have repair work to do. If not, I believe the risk
>>of Fujitsu dumping ICL is a real possibility; and damage here to
>>the UK as an investment location and as a pioneer of PFI is
>>inevitable.
>>
>>7. I will be taking Fraser, Chief Executive of the Invest in
BEIS0000278
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e)
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ritain Bureau, to see Naruto, Vice Chairman of Fujitsu (and -
airman of ICL) on 29 January. It would clearly be useful to have
>>had some progress by then. Grateful for any instructions by close
2>on 28 January.
>>
>>WRIGHT
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