Over half a million people worked for the 30 largest Japanese employers in Europe, Middle East and Africa (EMEA) in 2018, 22% more than in 2015. Going by the research we have done on the main host countries of the region (Germany, UK, France, Netherlands), this would indicate there are around 750,000 employees of Japanese companies in EMEA.
The top 2 by a large margin are Sumitomo Electric Industries and Yazaki, both making automotive components such as wire harnesses. They both have multiple manufacturing sites employing thousands of people, mainly in eastern Europe, north Africa and South Africa.
Yazaki‘s EMEA headquarters are in the UK and Germany. The UK side supervises branches and subsidiaries across Europe, with R&D and customer service centres across the UK and the EMEA region. Yazaki Wiring Technologies European HQ is in Cologne, with subsidiaries in Eastern Europe and Turkey. Yazaki’s EMEA workforce has grown by nearly 20% since 2014/5 with recent greenfield investments such as a new factory in Serbia and a third plant in Bulgaria.
Sumitomo Electric Industries also has European headquarters in the UK and in Germany (the Bordnetze side of the business). The Sumitomo Electric Wiring Systems operation in the UK originates in the acquisition of Lucas Industries in 1999. There is no longer any manufacturing in the UK but it supervises factories in Germany and Italy, with Sumitomo Wiring Systems Japan directly owning factories in Eastern Europe and Africa. Similarly the German HQ arises from the acquisition of Bordnetze from VW and Siemens in 2006. Sumitomo Electric Industries’ workforce in EMEA has grown 7% in three years, including acquisitions in Germany and a new plant in Moldova.
Sumitomo Electric Industries and Yazaki were the top 1 and 2 in 2014/5, but the third largest Japanese employer in EMEA, NTT Data, was only the 9th largest three years ago. NTT Data has grown through acquisitions such as Dell’s services business, Everis, MagenTys and Keane. NTT Data EMEA is based in the UK, owning subsidiaries across Europe. Again, there is a split regional HQ, with NTT Data Europe GmbH owning Itelligence – but not for much longer. The parent company, NTT is undertaking a major restructure of its business, uniting NTT Data EMEA, Everis and itelligence as part of EMEA & Latin America region, moving to a matrix rather than vertical organization. By 2020 NTT intends to have 2 companies under its new NTT Inc holding company for its non-Japanese business – NTT Data and a merged NTT Communications/NTT Security/Dimension Data organisation. The global headquarters for NTT Inc will not be in Japan but in London.
Dropping down a place from 3 to 4 over the past 3 years is Fujitsu, another Japanese IT major, in the awkward position of being both a supplier and competitor to NTT. Fujitsu’s presence in Europe originates from its acquisition of the UK’s ICL in 1990 and a joint venture with Siemens, which it later bought out. Fujitsu’s workforce in EMEA (or EMEIA as it names it, adding in India) has dropped by 8% since 2014/5 and looks to shrink further in 2019 and 2020 with the closure of the last PC manufacturing plant anywhere in Europe, in Augsburg, Germany. As it shifts to IT services business, its workforce in its global delivery centres and service desks is growing in lower cost but skilled, multilingual countries in the region such as Portugal, South Africa, Poland, Morocco and Russia.
Canon was also pushed down a place to 5 from 4 three years’ ago by NTT Data’s rise, but its workforce in EMEA has grown around 15% over the period. Canon acquired Dutch company Oce in 2009 and Canon Europa is the Netherlands based holding company which owns Canon Europe in the UK, acting as the functional and marketing headquarters for the region. Canon has grown partly through taking on Toshiba’s medical systems business and also through the acquisition of Sweden based Axis Communications in 2015.
From a UK perspective, whilst it’s reassuring that all of the top five Japanese companies in the region have some kind of regional headquarters in the UK, this does not mean that largest proportion of the jobs they have generated is in the UK. In manufacturing the drift is eastwards and southwards, and even for IT services, business process outsourcing and support jobs are shifting to Eastern Europe, Portugal, Africa and India. As they all have an EU based alternative headquarters, it is unlikely there will be any change in the HQ structure post Brexit, rather that virtual management teams dispersed across a very broadly defined region will become even more common.
Part 2 of this analysis continues here.
Pernille Rudlin’s latest book, Shinrai:Japanese Corporate Integrity in a Disintegrating Europe is available on Amazon.
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