To improve efficiency and cut costs, EXXON CORP.'s two subsidiaries are expected to start to merge headquarters functions later this year. ESSO SEKIYU K.K. and GENERAL SEKIYU K.K., over which Exxon gained operating control last August (see Japan-U.S. Business Report No. 336, September 1997, p. 13), will combine their business, general affairs and accounting departments. They also will reduce the size of their boards of directors and their payrolls. The goal is to cut costs by roughly $71.4 million. A formal merger is not planned, both for tax reasons and because each company's service stations likely would object. Together, Esso Sekiyu and General Sekiyu ranked sixth in Japan's oil industry in FY 1997 with an 8.7 percent market share.
An exchange rate of ¥140=$1.00 was used in this report.