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

Item 2. Patent Transfer Agreement with Platt

The First World War caused tremendous changes in the industries of the United Kingdom, one of the victor countries. Heavy industries including automobiles, aviation, electrical equipment, and chemicals (explosives, dyes, etc.) rapidly advanced, and the main industries prior to the war including coal, textiles, and ship building lost their prominent positions. In the Chinese and Indian markets, which Britain's cotton products had been dominating, cotton industries were developed using domestic capital, and cotton products from Japan also entered the markets, and Britain's spinning industry urgently needed to recover lost ground.

TALW's Type G Automatic Looms were highly acclaimed even outside Japan, and 205 units were installed in weaving plants in India. A. Platt and Company, a British loom manufacturer, decided to purchase patents from TALW to protect its key markets and sent [name] Chadderton, a corporate officer, to Japan.

Chadderton visited the Mitsui & Co. Ltd. Nagoya Branch with [name] Dorman from the Mitsui London office on June 7, 1929 and met with Sakichi and Kiichiro Toyoda.1 Later, Chadderton negotiated with TALW through Mitsui for transfer of the automatic loom patents, and it was decided that Kiichiro would travel overseas to sign the contract in September of that year.

Kiichiro also planned to sell the automatic loom patents in the United States during his journey to England and headed to the U.K. via the U.S. However, he entrusted the sale of the patents in the United States to a staff member accompanying him and instead focused on investigating the automotive industry and machine tools used for automobile manufacturing. He arrived at Platt in the United Kingdom on December 21 and signed the automatic loom patent assignment agreement.

The scope of the patent transfer agreement with Platt included the patents relating to the shuttle-change automatic loom invented by Kiichiro. The agreement called for total payment of 100,000 pounds to be made in four installments of 25,000 pounds (approximately 250,000 yen) each year, but ultimately, the unpaid amount of 61,500 pounds was reduced to 45,000 pounds (for total payment of 83,500 pounds) in July of 1934.

Kiichiro, who long dreamed of manufacturing automobiles, observed the changes in industrial structures in Europe and the United States during two overseas trips and was keenly aware of the need for an automotive industry in Japan. According to Akira Haraguchi (TALW managing director) and Tsutomu Furuichi (Mitsui employee), who both accompanied Kiichiro on his trip, Kiichiro was preoccupied with observing Ford's automobile manufacturing plants and researching machine tools.

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