Section 4. Establishment of Toyoda Automatic Loom Works, Ltd.
Item 3. Downturn in the Cotton Industry and Diversification and Streamlining
The cotton industry turns downward
Following the outbreak of the First World War in 1914, the cotton industries of warring countries including the United Kingdom lost export capacity. Japan took their place and began exporting cotton products to other Asian countries in about 1916, and Japan's cotton industry entered an unprecedented boom.
When the war ended in 1918, however, the cotton industry suffered an economic backlash and took a turn for the worse. The industry struggled with a long-term slump that lasted until 1931 as a result of the Great Kanto Earthquake in 1923, the financial panic of 1927, and the global depression that started in 1929.
During this period, the cotton industry in Japan curtailed production by 20 percent to 30 percent numerous times, cut wages, and reduced workforces. One result was frequent labor disputes, and a dispute occurred when 13 workers at Toyoda Oshikiri Boshoku were laid off on August 13, 1929.1 The dispute was resolved in the late hours of the night of the 14th, but five workers were arrested.2
The economy slumped even further in 1930. At TALW, labor problems broke out after Kiichiro Toyoda completed the contract with Platt and returned to Japan from England in April.3 TALW's sale of automatic looms fell by more than half from 4,004 units in 1929 to 1,992 units in 1930. Domestic shipments in particular suffered, plunging to one-third, from 2,590 units to 859 units.
Toyoda Boshoku also cut personnel in 1930. According to newspaper articles, the procession of events was as follows.
On July 11, 1930 the company announced that all operations would be shut down for two weeks prior to Japan's obon summer holiday and that after the holiday, employees were to wait until they received notice to return to work.4 According to an article on August 45, operations resumed as planned, but the work force of more than 1,300 men and women was reduced to about 700 employees.
An August 22 article headlined "Strike at Toyota Automatic Loom Works Kariya Plant?" reported that workers had rejected the dismissal of 21 employees and requested intervention by the Plant Section Manager of the Aichi prefectural government.6 On August 27, however, an article entitled "Union Approves Company Proposal for Peaceful Settlement at Late-Night Meeting"7 reported that the workers agreed to a company proposal to increase severance pay.
Sakichi Toyoda, president of Toyota Boshoku, passed away on October 30, 1930, and he had fallen into ill health that summer. For this reason, it is believed that he was not directly involved in the labor disputes, and according to a newspaper article on Tojiro Okamoto8, upon hearing the reports of the personnel reductions, Sakichi said, "if there was no other way even after searching for any possible solution, I would share my food when the plant could not support its workers".9
Kiichiro held the same beliefs as his father, Sakichi. No matter what the circumstances, it was difficult for Kiichiro to approve the termination of employees. Kiichiro believed that it was necessary to restore the employee confidence lost as a result of the layoffs and decided to give a portion of the 25,000 pounds received from Platt for the transfer of the patents to Toyoda-related companies. On February 15, 1931, Kiichiro gave money and goods worth a total of 250,000 yen to 6,000 employees at nine Toyoda-related plants to commemorate the 100th-day memorial service for Sakichi.10