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For Businessman Charlie McDermott, It’s Business Unusual in Year 2000

By: Julio Barthson

Date Posted: 1999-12-24

Twenty-two years on Okinawan soil, and still going. Every new day on the island seems to represent a fresh beginning, symbolic of an ever interesting sojourn for the man who now heads American business interests in this part of Japan. When Charlie McDermott stood up to campaign for the Chairmanship of the American Chamber of Commerce in Okinawa (ACCO), he knew very well that it would not be long moments of relaxation for his wife, kids and himself if he won. Yet he went through the process smoothly, and won the confidence of his peers with quasi-acclamation, and now has the mandate to invent another opening in his business career that caters for more needs and ambitions than just his.

Born in Altona, PA, in 1953, the elegant bearded entrepreneur joined the US Air Force from 1971 to 1975. He first came to Okinawa in 1977 after having been stationed in Taiwan and after having completed college. Business was always his thing. He says that he left the forces and came to Okinawa with the intention of making a living that way. “I was very interested in exploring the military market, as well as the local Okinawan market in the long term. I was sure it would last for long,” Charlie McDermott told Japan Update during a recent interview.

His business acumen took the time it needed to evolve through several stages with more or less success. First, he was with the H&R Block, a financial unit specialized in customs, tax and investment issues. Then he decided to open his own business in 1980 by setting up the Ace of Clubs, a partnership members’ club which he says was a “nice drinking spot” at the time. One year later, that partnership produced the pioneer video rental business on the island. By 1982, McDermott decided that the video rental business was lucrative enough to warrant full attention. He therefore launched his own American Video Services, which became the video rental of reference for quite a while on Okinawa, Misawa and Yokota bases. He computerized the video rental system in 1983, a novelty at the time in Okinawa. “Competition from AAFES, by the use of its usual predatory tactics, killed the project,” McDermott laments. “But that was fair game. If I had AAFES muscle, I’d do the same thing.”

Still believing in himself, Charlie McDermott then went into Computer Services, offering repairs, maintenance and spare part supplies. He later delved into full scale sales and retail in that domain. Now, he owns a company registered both in Delaware and Chatan City, Okinawa that offers network support services to several clients on the island. However, the bulk of his American Computer Services’ deals are done with the US Military. “We are mainly a US Government contractor,” he says. “But most American businesses on Okinawa are just that. Without the military presence here, most of us would close shop immediately.”

This sort of honest talk seems to occupy a good part of the man’s briefcase as he prepares to set out onto a New Millennium full of challenges for foreign businesses in Okinawa. He is the leader of the only foreign Chamber of Commerce in Okinawa, representing over 200 American, Japanese and other foreign entrepreneurs whose companies are registered with the ACCO. In that capacity, he will have confront Japanese Government authorities and Okinawa Prefectural authorities to negotiate better commercial conditions for foreign businesses and investments in Okinawa. At times, he will be going through extremely laborious negotiations in which the parties may represent completely divergent interests. However, McDermott seems ready for the task, and claims that he will ride on the good winds and standard momentum created and set by his able predecessors.

“Previous administrations of the ACCO did all the good preparatory work. They paved the highway for us,” McDermott says. “Now, our task is to make deals. The new ACCO bureau’s duty is to put vehicles of success on the road.”

He hopes that the American Chamber will participate fully in making of Okinawa a very attractive spot for American businesses during the next year and beyond. According to him, that involves coming out strongly in favor of deregulation so as to allow the island’s economy to be competitive within the context of trade globalization. The entrepreneur explains his next move: “I believe that Okinawa is the one place in Japan that has a unique opportunity to go into the United States and bring back investors. However, many American businesses are still scared of coming to do business in Japan. My priority is therefore to find ways and means to get present and future American businesses to multiply the sales of tangible and intangible products to Japan through Okinawa.

“My strategy is simple,” McDermott continues. “First, set up some real coordination structure with the Prefecture; then campaign for new businesses coming into Japan to move to Okinawa, then we help all new businesses get better knowledge of the terrain by facilitating access to, and understanding of, the market structure through a package that we’ll design in collaboration with the Prefecture. Finally, we would then be helping both the American businesses and the Okinawa Prefecture to prosper by reducing the rugged bureaucracy that frustrates so many potential investors.”

However, the ACCO Chairman is not expecting an easy fight. There are still problems with the Japanese Visa administration and banking system that hamper optimum foreign investment, and these will not go away so soon. “I believe even Bill Gates would not have had a visa to do business in Japan some years ago, because he didn’t just meet the conditions required by Japanese authorities for a foreigner to start business here,” he contends.

Among those stiff conditions are huge collateral guarantees and sponsorship that Japanese banks require, and the subtle, officious requirement to be married to a Japanese national before one can obtain a visa to do business in Japan.

“Even after 22 years in Japan, the banks still won’t lend my company money without a huge guarantee, and such is the case with many others,” McDermott regrets. “Many Japanese businessmen who settle in the States do not have to go through the same hurdles when they have viable projects. However, Japan will finally have to open up, and Okinawa will be the place to benefit most from it.”

Charlie McDermott and his team at the ACCO therefore have a real daunting task ahead, especially in this Year 2000, with all the apprehensions over how the Y2K bug may affect American businesses in Okinawa. But, on the other hand, there is good news. The G-8 Summit of the world’s most powerful nations will be coming to Okinawa, hence offering a unique occasion for the Chamber to showcase its strength in numbers and efficacy. Charlie McDermott told guests during a recent ACCO President’s Ball that, “So far, Okinawa has enjoyed an enhanced political presence. What every one of our members hopes is that in the aftermath of the G-8 Summit, Okinawa can find it’s place on the economic scene as well.”

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