Section 2. The Businesses of Sakichi Toyoda

Item 2. Establishment of Toyoda Boshoku Corporation

Establishment of Toyoda Boshoku Corporation

Having returned to Japan, in October 1911 Sakichi Toyoda leased 9,900 square meters of land in Yoneda, Sakou1, Nakamura-oji, Nagoya-gun (now Noritakeshinmachi 4-chome, Nishi-ku, Nagoya City) and began construction of a new plant.

This plant was completed the following year in September 1912 as the Toyoda Jido Shokufu Plant, and began operation in earnest. Although the plant was capable of housing 200 looms, due to a shortage of funding 92 51-inch (129.5 cm) wide regular looms and eight automatic power looms were installed-only half the number originally intended.

To obtain funding for the required machinery, Sakichi renegotiated the terms of the contract transferring his loom patent rights to Toyoda Loom Company. Usage royalties were negotiated at one third of profits after a 10 percent dividend, but the company had not achieved sufficient profits to pay a 10 percent dividend, and not once had Sakichi received a usage royalty for his patents. As a result of the renegotiation, it was decided that Sakichi would trade all of his patent claims in October 1912 to Toyoda Loom Company for a one-time payment of 80,000 yen. This payment was made in January 1913. Sakichi used the funds to purchase additional looms, bringing the total number of looms at Toyoda Jido Shokufu Plant to 200. The eight automatic power looms were used for testing.

During the research process for the automatic power loom, Sakichi realized that there were problems with the quality of the yarn. At the time, spinning yarn in Japan was made of short threads, and was uneven and had poor tension. This caused the warp thread to break easily, which meant that the original performance of automatic looms could not be exerted, making it difficult to evaluate. In response to this problem, Sakichi decided to establish his own spinning plant, and ordered Akiji Nishikawa, who had just returned to Japan in December 1912, to build it.

Nishikawa asked Tsutomu Furuichi, a friend and former classmate at the textile department of Tokyo Higher Technical School who worked at Takada Shokai, a machinery import company, to provide an estimate for 5,000 spindles of spinning machinery. Although Furuichi created a machinery plan and provided an estimate, Sakichi had also consulted with Kamenosuke Fujino, the head of the Osaka branch of Mitsui, and the discussion took an about turn, with the order going to Mitsui instead. Mitsui also promised to provide Sakichi with funding.

In February 1914, 6,000 spindles from Platt Brothers & Company (hereafter called Platt) were imported, and operations commenced. The facility was powered by electric motors, and as mentioned previously uniflow steam engines provided a private power source. As the plant also conducted spinning operations, its name was revised to Toyoda Jido Shokufu Plant.

At the time, a standard spinning plant had 30,000 spindles, and Sakichi faced strong opposition from those who believed the business would be unable to break even with only 6,000 spindles. However, circumstances changed as World War I broke out in July 1914. Not only were the cotton spinning plants of participant countries converted for military use, lowering yarn production capability, but the war also caused a shortage of shipping vessels and disrupted shipping routes. This cut exports of cotton products from Europe to Asia. To fill this gap, the Japanese cotton industry made inroads to Asian markets and also exported cotton products to England and the United States, enjoying an unprecedented boom.

Toyoda Jido Boshoku Plant also enjoyed strong results, and as a result of subsequent plant expansions grew to operate 1,000 looms and 30,000 spindles in 1916. On January 30, 1918, Toyoda Jido Boshoku Plant was converted into a joint-stock company, becoming Toyoda Boshoku Corporation. The company outline at the time of establishment was as follows:

1716 Yoneda, Sakae, Nakamura-oji, Nagoya-gun
5 million yen (3 million yen paid)
President: Sakichi Toyoda,
Managing Director: Risaburo Toyoda2,
Director: Kamenosuke Fujino3, Auditor: Ichizo Kodama4
Plant Facilities
34,080 spindles (Platt model), 1,008 looms (Toyoda model)
Approximately 1,000

Toyoda Boshoku gave birth to Toyoda Automatic Loom Works Ltd., which in turn led to Toyota Motor Co., Ltd. and Aichi Steel Works Ltd., ultimately leading to creation of the companies which comprise today's Toyota Group. Toyoda Boshoku Corporation was the foundation for the current Toyota Group.

Toyoda Boshoku itself merged as one of the five Toyoda and Toyo Cotton companies in February 1942 to form Chuo Boseki Co., marking an end to the company. Chuo Boseki was absorbed into Toyoda Motor in November 1943, the following year.

The Taisho-era brick building of the headquarter plant of the former Toyoda Boshoku in Nagoya City remains today, and currently houses the Toyota Commemorative Museum of Industry and Technology. In addition, the Kariya Plant of the former Toyoda Boshoku currently serves as the headquarters and Kariya Plant of Toyota Boshoku Corporation.

Furthermore, the Toyoda Shokufu Plant, managed by Sakichi's younger brother Heikichi, was constructed and transferred to Oaza Kitaoshikiri, Kanashiro village, Nishikasugai5 in 1917, the year before Toyoda Boshoku was founded in the same village. This plant was known as the Toyoda Shokufu Oshikiri Plant, and in 1927 a spinning plant was added at the site. These facilities subsequently become Toyoda Oshikiri Boshoku Corporation in 1931, which was merged to form Chuo Boseki (Chuo Spinning) Co. in 1942.

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