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Tepco to seek mutually beneficial partnerships with peers

Capital tie-ups not top priority in restructuring, incoming president says

Tepco director Tomoaki Kobayakawa aims to reform the company's culture once he takes over as president.

TOKYO -- Tokyo Electric Power Company Holdings's plan for restructuring its nuclear power business does not hinge on forming capital ties with other power utilities, says the director tapped to take over as president in a recent interview with The Nikkei.

The soon-to-be-president, Tomoaki Kobayakawa, said he would first seek partnerships wherein parties retained their own company structures. He also aims to overhaul Tepco's corporate culture in one year through quick reforms.

No takers

Tepco's recent restructuring plan, announced in May, calls for reorganization of its nuclear and power transmission businesses through integration with such operations at other power companies. But the idea was universally rejected by the peers.

"If I was in their shoes, I would have also interpreted that the plan puts capital tie-ups first," Kobayakawa said, adding, "I would have also felt resistance to the idea as it seems abrupt."

Competitors are treating Tepco as radioactive due to its massive cost burden from decommissioning reactors at the Fukushima Dai-ichi nuclear power plant, as well as paying reparations for the victims of the nuclear accident at the plant in 2011. Kobayakawa added that he did not think that integration with other power utilities is a must for the future of the company.

But he does intend to seek partnerships quickly. Major power providers share the pressing problems of bringing nuclear power plants back online and decommissioning aging and worn-out ones. Kobayakawa said he would "propose that we cooperate where we can" on adherence to nuclear power regulations and other issues. However, he aims to do it by offering mutually beneficial partnerships.

Internal overhaul

Tepco's restoration plan also calls for promoting "the next generation of staff" to positions of power, by entrusting new operations to employees from their mid-30s to mid-40s, for instance. The idea is to "give people a chance to get involved with management from a young age," as Kobayakawa put it. Another goal is to implement systematic training programs and delegate more authority to younger workers. He aims to reform the corporate culture in about a year and have Tepco at a stage where it will be ready to start growing again.

It remains unclear when Tepco will be able to restart its mainstay Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture. The local government there is still examining the nuclear incident in neighboring Fukushima, as well as drafting emergency evacuation plans in case of a problem at the Kashiwazaki-Kariwa plant. Kobayakawa hopes to gain the understanding of locals by "adding more chances for us to propose ways to contribute and listen to people's opinions."

Distrust grew among locals after they found out that some of the plant's facilities did not meet anti-quake standards. Kobayakawa determined that the root cause was a lack of communication within Tepco. He aims to eliminate the problem -- the adverse effects of the company's vertical divisions -- by forming task forces drawing from different business sections to handle specific problems.

Work ahead

In order to fund the decades-long processes of decommissioning Fukushima and paying reparations, the company will need to develop new businesses. Kobyakawa believes "the energy industry will change drastically" with the spread of such innovations as the internet of things, as well as renewable energy and electric vehicles.

Kobayakawa will assume the presidential post following a shareholders' meeting June 23, joining incoming Chairman Takashi Kawamura, chairman emeritus of Hitachi, to tackle the challenge of rebuilding the company.

At age 53, Kobayakawa is an unusually young choice to head Tepco, but the company has also brought in experienced outside directors like Kawamura. Kobayakawa said he will "consult with the outside directors on the business as a whole," and intends to "ask them for their management and supervision."

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