Section 4. Establishment of Toyoda Automatic Loom Works, Ltd.

Item 1. Toyoda Automatic Loom Works Established

Mass production of Type G Automatic Loom begins

A large number of orders for the high-performance Type G Automatic Looms were expected, but the Hioki-cho workshop was small with only about 1,650 square meters of area and was not suitable for mass production. Kiichiro Toyoda's father Sakichi had given instructions, and in February 1926 Kiichiro proposed the construction of a new plant in Kariya.

Sakichi's instructions were to build a plant capable of producing 500 units of the Type G Automatic Looms per month, but Kiichiro carefully considered the opinions within the company urging caution and prepared two proposals for monthly production of 500 units and 250 units.1 A list of orders for machine tools prepared by Kiichiro in June 1926 included special-order machine tools and high-performance imported equipment, and the installation of electric furnaces and molding machines suitable for high-quality casting was considered for the casting facilities. The first phase of construction began in July.

In conjunction with the construction of the new plant, Toyoda Automatic Loom Works, Ltd. (TALW) was established as an automatic loom manufacturing company. Establishment of the new company was proposed and approved at a general shareholders meeting of Toyoda Boshoku Corporation on April 26, 1926, and TALW was established in Kariya on November 18. The basic details of the company are as follows:

Location:
2-1 Aza Yuk, Oaza Kuma, Kariya-cho, Hekikai-gun, Aichi Prefecture
Capital:
1 million yen (250,000 yen paid)
Management:
President: Risaburo Toyoda; Managing Director: Kiichiro Toyoda
Directors:
Akiji Nishikawa, Rizo Suzuki, Risaburo Oshima
Corporate auditors:
Sasuke Toyoda, Tokiya Murano

The Kariya Plant was under construction at the time of establishment of TALW, and as a result, the Type G Automatic Looms continued to be produced at Toyoda Boshoku's Hioki-cho Repair Plant. Later, the second phase of construction, primarily an assembly plant, began in March 1927 and was mostly completed by June.2 Full-scale production with monthly capacity of 300 units began from this.3

Looking back on the entry into the automatic loom manufacturing business, prototypes were first produced at Toyoda Boshoku's workshop followed by integrated production of the Type G Automatic Loom, a completed model, at the small-scale Hioki-cho Repair Plant. Later, mass production (300 units per month) was achieved at TALW's new loom plant, and production was expanded to 1,000 units per month.

This method of increasing production capacity in stages while acquiring production technologies was later adopted at the time of entry into the automotive industry.

To top of page

1
Kiichiro Toyoda's memoirs entitled "The Early Years of the Automatic Loom" (dated March 11, 1952) state the following:
"In contrast to my father's instructions to establish monthly capacity of at least 500 units, others warned that it would not do to produce more than 300 units per month, but later we would not have been able to keep up with orders even if we produced 1,000 units per month." (Toyoda Kiichiro Bunsho Shusei, page 48)
2
Forty-Year History of Toyoda Automatic Loom Works, p. 99
3
The third business report of Toyoda Automatic Loom Works (October 1927 to March 1928) indicates that efforts were made to install plant facilities and raise work efficiency, but shortly after the start of operations the target levels were not yet achieved, causing much regret. The report indicates that on October 21, 1927, "at a general shareholders meeting, approval was obtained to enter into a contract for the purchase of patents and utility model rights from Kiichiro Toyoda and four others for one million yen." It is believed that the contract was for the Type G Automatic Loom patents and utility model rights, and it can be inferred that the five individuals were Kiichiro and Sakichi Toyoda, Rizo Suzuki, Risaburo Oshima, and Akiji Nishikawa. The basis of the one million yen purchase price is not clear, but it is believed that this became the basis of the price when the patents for automatic looms were transferred to Platt for consideration of one million yen (100,000 pounds). The purchase agreement for the industrial property rights concerning the Type G Automatic Loom was never concluded because numerous inventions and designs for improvements were made. Later, a system to apply for and register inventions and designs in the name of TALW was introduced.