Divesting steelmaking and mining, and retreating to the forge (1931)

Letting go of the upstream, staying with the forge

To describe this as a tidy-up forced by disarmament is to miss what the separation meant. What Japan Steel Works let go was not an ailing division but the upstream process it had deliberately taken into itself by merging Hokkaido Iron Works in 1919. A blast furnace lets a company supply its own material, but when utilisation falls the fixed cost stays where it is. For a firm whose main line was weapons — orders that rise and fall on a single decision of state — the danger of carrying volatile plant twice over came into the open within a few years of naval limitation. What it kept was the craft of forging steel.

Even so, we can call the retreat a rescue only because we know the shape the company took after surviving on cast and forged steel. Immediately after the separation it moved towards still deeper concentration on guns and heavy forgings, and with defeat every plant was designated for reparations; the postwar recovery was hard going. Of the three fields left in 1931, the one growing fastest in fiscal 1968 was not ordnance but industrial machinery. What divided the outcome was less the decision to narrow than what the company went on forging inside the narrower field.