After meeting Trump Japan’s SoftBank pledge $50 billion for U.S. to create 50,000 new jobs !


SoftBank Group recent pledge to  Donald Trump that it will invest $50 billion (5.9 trillion yen) in the U. S. raises the question, what’s in it for Chief Executive Masayoshi Son?

On the surface, the news fits nicely with SoftBank (SFTBF) CEO Masayoshi “Masa” Son’s promise to President-elect Donald Trump to pour money into the U.S. to create 50,000 new jobs over the next four years during a meeting at Trump Tower in New York on Dec. 6..
But it raises further questions about how much of the $50 billion he pledged earlier this month would have ended up in the U.S. anyway.

The big-money decision prompted speculation that it is Son’s attempt to thaw the frosty relationship between Trump and Silicon Valley tech giants, including Apple Inc., with which Son and Softbank enjoy a highly lucrative relationship.

Another theory is that Son is keen to befriend Trump so he can revive his stalled attempt to buy out U.S. telecoms giant T-Mobile, a deal previously thwarted by the U.S. Democratic administration.
The logo of Foxconn Technology Group, the Taiwan-based manufacturer that makes iPhones for Apple in China, appeared next to SoftBank’s on a document Son carried to show to eagerly waiting reporters in the tower’s lobby after the meeting.

The paper suggested that Foxconn will top up SoftBank’s investment with $7 billion.

Both companies have largely grown their businesses by dealing with Apple: Softbank distributes Apple’s iPhones in Japan while Foxconn manufactures them.

However, Trump has criticized Apple for shutting down its factories in the United States and moving production overseas, claiming that products to be sold in the United States should be manufactured in the country in order to protect domestic employment.

During the election, Trump even made remarks suggesting a boycott of Apple products.

A former close aide of Son takes the view that the Softbank CEO teamed up with his close friend, Foxconn’s chairman Terry Gou, to offer a helping hand to Apple by promising investment in the United States.

The investment will be channeled through the provisionally named SoftBank Vision Fund, a private fund for technology investments with the potential to grow to 10 trillion yen, which is scheduled to be set up by the Japanese tech giant in partnership with Saudi Arabia’s top sovereign wealth fund led by Saudi Deputy Crown Prince Mohammed bin Salman.

The Japanese mogul will allocate the funds, based on oil money capital, for investment in the United States while Trump, who will become president in January, has often taken a hard line on Muslims.

The Wall Street Journal reported on Dec. 12 that Apple has discussed with SoftBank about making an investment of up to $1 billion to the fund.

SoftBank, which owns the U.S. mobile carrier Sprint, once aimed to acquire T-Mobile, one of the largest U.S. mobile telecoms companies, but could not clinch the deal due to opposition by the Obama administration.

The U.S. Justice Department and the Federal Communications Commission are not jumping up and down at the prospect of a business merger between two major companies as they say it could prove detrimental to consumers.

That fact is behind the view that the aggressive overseas investor rapidly became intimate with Trump in order to embark on the acquisition again.

Yet, one of Softbank’s board directors brushed aside a question concerning the speculation saying, “It’s most unlikely for Son to suddenly ask such thing to the U.S. president-elect.”

The head of SoftBank group met South Korean President Park Geun-hye in September, promising to invest 5 trillion won ($4.2 billion or 490 billion yen) over the next 10 years.

Concerning the Cambridge-based chip design powerhouse ARM Holdings in Britain, which SoftBank acquired for 3.3 trillion yen, Son promised British Prime Minister Theresa May that he will keep the headquarters of the world’s leading semiconductor intellectual property supplier in Britain and expand job opportunities.

In June, he met with Russian President Vladimir Putin in Russia and proposed connecting a transmission network to exchange electricity between Japan and Russia.

So how is Son able to directly negotiate with world leaders?

The answer lies in his deep-pocketed economic clout and his ability to make prompt assessments to utilize that capital.

Having between 2 trillion yen and 3 trillion yen at his disposal, which he raised or earned through the mobile business in Japan, the billionaire CEO intends to make effective use of the funds abroad, but not in Japan, where economic growth has already slowed.

Commenting on Son’s excess focus on overseas investment, Satoshi Shima, former head of the company’s president office said: “ Son should make more efforts to support young Japanese entrepreneurs because he was brought up in Japan. ”

SoftBank already has considerable business interests in the United States, where it owns Sprint and has long aspired to purchase another wireless giant, T-Mobile. SoftBank in 2014 abandoned a bid for T-Mobile after the Obama administration raised competition concerns with such a merger.

Source: asahi.com