Responding to the "Wintry Period for Trading Companies"
In May 1981, President Matsuo became chairman and Vice President Matsujiro Ikeda became president. During the first half of the 1980s Japan's real economic growth remained around a low 3%, and the country faced the problem of disposing of overcapacity, especially in the materials industry. In addition, because the strong yen decreased export profits, manufactures reduced the commissions paid to trading companies and began bypassing the trading companies and directly exporting by themselves. This made the environment facing trading companies even more severe while at the same time other unfavorable factors made the situation worse, such as an increase in expenses, especially labor costs, and the poor performance of subsidiaries and affiliates, so this period came to be called the "wintry period for trading companies."
To work out of this situation, in December 1982, President Ikeda proclaimed the Vitalize Marubeni (V.M.) initiative to company employees. The purpose of the V. M. initiative was to respond to the difficult business environment by creating a structure to fully utilize all employees based on changing the way of thinking throughout the company to strengthen business fundamentals and improve profitability, so the Company organization and human resource system were revised and a suggestion system implemented. But in January 1983 President Ikeda fell ill and in April he assumed a new position as director and advisor and Vice President Kazuo Haruna became president.
President Haruna continued the V.M. initiative proposed by former President Ikeda and espoused the importance of using operating profit to pay dividends and reserving allowance instead of relying on the sale of assets, but thereafter the Company suffered high write offs from the reorganization of affiliates, and so the Company continued to rely on income from the sale of stock and so the fiscal 1982 financial results showed that net after tax profit had fallen to ¥300 million.
The businesses that did expand during this difficult environment were plant exports for power systems, energy, chemicals, etc., and exports of steel pipe for oil producing companies. In particular, strong orders for power systems were received from around the world, and this proved to be a major profit source for the Company from the 1980s through the first half of the 1990s.
