Absorbing Daimaru Steel and opening the Kyushu works (1971)

Never use an acquired site in the form you bought it

What Tokyo Steel obtained in this merger was not the company called Daimaru Steel but the right to hold a place in northern Kyushu where steel could be made. It took all the shares first and sat on them for two years and more, secured land next door, then extinguished the corporation — and two months later swapped the equipment out for two 50-ton electric furnaces and two continuous casters. This is an entirely different use of time from the method of running an acquired business as it stands and waiting for the fruit. That it pushed this process through in a year when the market had sunk and its own net profit had fallen to ¥100 million shows Iketani Taro’s yardstick of “getting ten years ahead” exactly as it was.

The four-site layout, on the other hand, does not appear to have been a goal of management in itself. Senju, Kochi and Takamatsu were all closed, or turned into logistics bases, as the pattern of demand and raw material shifted. What remained was not the number of plants but the procedure: replace the contents of the ground you bought with the newest furnace available. The procedure tried out in Kyushu in 1971 was repeated in the same form when Okayama’s open hearths were stopped for 140-ton electric furnaces in 1978, and again with Okayama’s hot coil equipment in 1991.