They had
8. Weedon afterwards told me that he and Wright were satisfied with the outcome of their talks. been quite prepared to go along with the fiction that the initiative for the approach rested with the British. GEC were themselves convinced that the Japanese could not conceivably complete the contract within the price stipulated given world wide inflation, rising costs of raw materials and of course the energy crisis. Clearly GEC were not going to be involved in any situation which would enable the Japanese to cut their losses at their expense. If however the Japanese for whatever reason wanted to involve the British and GEC could bid for hefty chunks of the contract on terms which were commercially profitable, he could not see that they had anything to lose. Most of the equipment they would be bidding on
We were talking would be on direct export from the UK. about possible figures in the range of £40-£60 million. Even if much more modest amounts were involved, GEC would still be interested always provided there was a profit.
Weedon
9. Weedon was grateful for the help which we had been able to give in setting up these meetings with the Japanese and emphasised once again the highly confidential nature of the whole exchange. They would not be informing Jardine Matheson in Hong Kong though it was for consideration whether they would at some stage put Sir John Keswick in the picture. I told Weedon that I had discussed the matter with the Ambassador whose view was that it would be very wise to carry Keswick along with them. said that Lord Trevelyan was on the boards of both Jardines and GEC and the link was ready made. also mentioned the proprieties of informing their Italian partners, since they were really the leaders of the Anglo- Italian consortium. GEC had many links with the Italians in many parts of the world and would not wish to queer their pitch with them. They had to bear in mind however that the Japanese were obviously not anxious to get involved with the Italians.
Weedon
10.
So far so good. It is not at the moment absolutely clear why the Japanese should have taken this initiative. It is conceivable that MITI wishes to make a gesture to the UK in the context of the official agreement reached during Mr Chataway's visit to establish cooperation between Japan and Britain on investment questions including joint ventures in third countries.
There may
be other motives behind the Japanese approach eg that they are embarrassed at having made a pre-emptive bid which they cannot now honour except at enormous loss and wish to involve the British in order to help them renegotiate with the Hong Kong Government. As they see it however, GEC have nothing to lose by going ahead.
"Yours sincerely
Hamish Méthie
J I McGhie
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