Section 6. Postwar Arrangements and Labor Disputes

Item 4. Three New Company Spin-Offs in Association with Business Reconstruction

The Wartime Compensation Special Measures Act and the Business Reconstruction and Adjustment Act were promulgated on October 19, 1946. The former Act provided for the ending of the wartime compensation that the Japanese government had promised to pay during the war (a special wartime compensation tax was imposed for 100 percent of the amount to be paid) and the latter Act prescribed relief measures for companies with worsening financial conditions due to the cutoff of payments. The mainstay of the relief measures was an absorption method for the handing over of an old company's business or assets to a separate company and the dissolution of the old company.

Toyota Motor Co., Ltd., like other companies, was forced to consider plans for reconstruction with the end of wartime compensation. However, as previously mentioned, due to the various restrictions that had been imposed on it (including designations as a restricted company, a company with excessive concentration of economic power, and a war reparations maintenance plant) plans for full-scale reconstruction and adjustments were delayed until after the designation as a company with an excessive concentration of economic power was rescinded on January 21, 1949.

When formulating reconstruction and adjustment plans, the company aimed for the minimum amount of reorganization acceptable under the Business Reconstruction and Adjustment Act, basically to maintain the current position and achieve independent management as soon as possible. As a result, it was proposed that Toyota Motor Co., Ltd. itself would remain as a surviving company, with part of the Nakagawa Plant (formerly the Aichi Plant) located in Nagoya, and the business of the electrical equipment plant and spinning and weaving plant in Kariya-cho spun off to a separate company.

At the time, part of the Nakagawa Plant in Nakagawa-ku, Nagoya manufactured enamelware. The electrical equipment manufacturing section was transferred from the Kariya-minami Plant to the Kariya-kita Plant in Kariya-cho in October 1948, and the radiator manufacturing section was also transferred there at the same time from the Koromo Plant, with both sections together being renamed the electrical components plant. In addition, the spinning and weaving plant located at the Kariya-minami Plant came under the Spinning and Weaving Department in October 1946.

In the context of that situation, Nippondenso Co., Ltd. was established as a separate spin-off company from the electrical equipment plant, the Kariya-minami Plant where the spinning and weaving plant was located was spun off to create Minsei Spinning Co., Ltd., and the enamelware manufacturing section of the Nakagawa Plant was spun off to create Aichi Enamelware Co., Ltd. Application for approval of these adjustment plans including the establishment of the separate companies were submitted to the Minister of Finance and the Minister of Commerce and Industry on April 30, 1949, and approval was granted on November 15, 1949.

Based on these reconstruction and adjustment plans, Nippondenso Co., Ltd. was established with capital of 15 million yen by investment in kind from Toyota Motor Co., Ltd. on December 16, 1949. It was later renamed Denso Corporation and became a core company of the Toyota Group.

Aichi Enamelware was also established in a similar way on December 16, 1949 with an investment in kind from Toyota Motor Co., Ltd. and a capital of four million yen. The company was later transferred from the Nakagawa Plant in September 1951, and was dissolved on November 27, 1951 due to poor business results. The capital from Toyota Motor Co., Ltd. was paid out and the company's management continued the business by establishing a new company, Nissin Enamel Manufacturing Co., Ltd. that concurrently conducted production of automobile stamped parts and other types of business.

The Spinning and Weaving Department was spun off on May 15, 1950 to establish Minsei Spinning. Subsequently, the company was renamed Toyoda Boshoku Corporation in August 1967, and the proportion constituted by the automobile parts manufacturing section was enlarged. In October 2004, the company's name was changed to Toyota Boshoku Corporation.

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