After the 4th Corporate War between the oceanic megacorporations OTEC and CINO, instigated by the Eurobank, that turned into the worldwide war between Arasaka and Militech. the world was left in pieces. On the one hand, they had to deal with the aftermath of a worldwide war, that destroyed much of world’s infrastructures including shipping routes, this disruption severely crippled megacorporations as they couldn’t ship and distribute the goods they produced, that added to the economical exhaustion of the war, as most of the major corporations got involved in it on one side or the other; ended, for a period of time, with corporative supremacy.
in the middle of the 4th Corporate War, an Orbital war erupted. It is thought, although not proved, that the event that started the hostilities happened in April 2022, when the master of Netrunners Rache Bartmoss took control of some Arasaka killsats (Satellite Weapons) in Low Earth Orbit and used them to destroy unmanned Arasaka autofactories. This raised a commotion in space, sparking the EuroSpace Agency to impose a 24-hour blockade on all space traffic. The Highriders, the people that work and live in space, didn’t seem to be amused that the war of the dirtsiders would affect them and wanted to declare independence from Europe, which means, from the EuroSpace Agency, as most orbital colonies belong to them. To do so, they started to hit the Earth with suborbital “artillery”, which means, using mass drivers to throw multi-ton rocks on Earth that could destroy small cities, which left no other choice to the US and Japan governments than to recognize the new Highrider government. But this movement of the Highriders to achieve independence, throwing multi-ton rocks on Earth I mean, and destroying things left and right, also had to be added to the rest of the destruction of the 4th Corporate War, and tinted the sky of a pale red, that’s why the times after the 4th are called the Time of the Red.
During the Time of the Red
all America had to be rebuilt, cities shattered, especially Night City, where a mini-nuke exploded, rural areas were destroyed, megacorporations sank, the thing was a disaster. Differently to what happened with the collapse of the American economy in the 90s, now the government couldn’t count with corporate money for the reconstruction, basically because corps needed that money to rebuild themselves, and also governments thought that this was a good moment to get rid of corporate control, like the actual problem with megacorporations wasn’t corruption. Megacorps wouldn’t have that much power and influence if officials couldn’t be bought. But that’s a different subject.
The president of the United States at that time, an ex-military officer called Elisabeth Kress, who was elected a year before the 4th Corporate War erupted, tried her best to keep the States together. She tried so hard that the States became a functional dictatorship. But she didn’t have enough hands to be everywhere and one government couldn’t handle all the reconstruction by itself, which split the nation in two: the East and the West. The Federal Government it’s still located in Washington DC, and effectively rules the west, and they wanted to reincorporate the Free States of California to the States, because they’re wealthy and technologically advanced. In the other coast we have the Pacifica confederation, an alliance of the states of Washington, Oregon, Idaho, Northern California, and British Columbia, a powerful alliance that created an economically powerful region as this was the entry port for what was left of Asia, and also had access to a lot of military power too.
This Pacifica confederation was also responsible for Night City to maintain its status as a City-state. The metropolis started its reconstruction shortly after the end of the 4th, and this reconstruction was long, it recently ended in 2077.
We can even say that it didn’t end in 2077 since the district of Pacifica was left unfinished, but most of Night City was rebuilt by the early 70s. The Nomad family of the Aldecaldos was at the head of the reconstruction of Night City in the Time of the Red, which gave Nomads a seat in the City Council, where also megacorporations that wanted to watch over corporate interests, had a saying, this included Zetatech, Biotechnica, Petrochem and, later, Arasaka, but in a covert way since their activities in continental America were forbidden by the actions of President Elisabeth Kress.
Sides of America: a divided country with a divided government.
President Kress had to give the West a lot of autonomy if she wanted them to collaborate with the Federal Government, so much autonomy that, at one point, they totally escaped the Federal control. And even though the Pacifica Confederation had a powerful military strength, let’s not forget that Militech was nationalized by the Federal Government at the end of the 4th, meaning siding with the East, and Militech was still one of the most powerful military forces in the world and, please, please, CD Projekt RED, put Anastasia Luccessi as the CEO of Militech, Lundee retired ages ago, Antonio Lucessi died in 2077, Anastasia is the person to lead the company.
So, you have a powerful military force in the East, what does the West have again? Oh, that’s fucked up. Se, let’s remember the history lessons we learn at school, what happens when one side with military strength wants something that another side with less military strength has? Colonialism. That’s what happens. So, at one point, the Federal Government decided that it was time to make America Big Again and invaded the Pacifica Confederation, with their beautiful army that included Militech assets. What does the West have? Well, Lazarous group, they’re no match to Militech joining forces with half of American’s Army. But, but, Night City wasn’t going to easily let go of this independence it had, and, quoting the Cyberpunk Red Jumpstart Kit Worldbook page 17:
Kress’s successors are going to be in for a really long and ugly war if they want to take this particular Free Zone back into the fold; they might even ask Arasaka for help if it comes to that.
If there’s something strange in your neighborhood, who you gonna call? Arasaka! Who at that point should be more or less done with dealing with the aftermath of their attempt of a coup in Japan and was divided since the rebel son of Saburo Arasaka, Yorinobu Arasaka, returned. But the Game of Thrones with Arasaka here is a little complicated because Yorinobu’s engram was liberated by Militech. But the other side of Arasaka it’s still ruled by Saburo and I’m inclined to believe that when Saburo returned to Arasaka he unified the Princess and the Bakafu factions although this is not known yet, so it’s only one of many multiple theories.
Rise of the Unification War (2069-2070)
At the end of 2069, the recently elected president Rosalind Myers presented a unification program to extend federal rule over the rogue Free states under the pretense of strengthening the nation. Most of the independent American territories opposed unification. Conflict was inevitable. Night City avoided the fighting, but only barely. Northern and Southern California would up on opposite sides of the war, with the south allying with the United States government, the North attempting to reamin independent from federal rule, and the people of Night City holding their breath as they awaited the invasion by federal troops. In early 2070, an NUS army division advanced to the outskirts of the city, but invasion was prevented thanks to the quick actions of councilman Lucius Ryhne. Capitalizing on contracts made during a decade of service on the city council, Rhyne beseeched the long-shunned Arasaka Corporation for protection.
Following Arasaka's open intervention, the Treaty of Unification was finally signed by the New United States and the Free States coalition, ending the Unification War. The Free states retained their autonomy, but agreed to participate in the new federal government and to cease hostilities among themselves.
Shortly after the war, Arasaka returned to Night City in all its glory, With interesting tax benefits and control over the City Council, and after winning the war, as much as you can win any war, the Japanese Conglomerate built a new Arasaka Tower in the Corporate Center of Night City in the 2070s. The same space that is shared with other megacorps as Militech, Biotechnica, Petrochem, Kang Tao, and Orbital Air. In the Cyberpunk Universe as in real life. All wars have an economic interest that includes the appropriation of resources and where there's money there are megacorporations who want to protect or gain economic interests.
Wars cost a big bundle of money, which meant this Unification War, like all wars, also was economically exhausting, and it caused another economic crisis that affected the economic stability of the government and some corps. Most likely the ones on the losing side. One of the consequences of such a crisis was seen in Night City, as megacorporations had to pull off the funds for the reconstruction of Pacifica, leaving the district unfinished and leaving all workers behind. But, apparently, Night City in 2077 is still feeling the consequences of this depression because even "high zones" like the district of Heywood have an underlying gang problem and, you know, the more extended the poverty and the depression is, the more people who will resort to extreme means to make a living. Except if we're talking about corps, because what they do is not illegal, is contractual, no matter what it is that they do.