Splitting the wire business out of the copper works (1911)

What it means to carve out the division that is losing money

Read as a natural separation to keep pace with rising demand, this decision loses its centre. For the three years before the split, the cable shop had been losing roughly ¥50,000 every year. As one division of the rolling works it could have gone on quietly, its hole filled by earnings from copper sheet and rod. That Sumitomo chose otherwise and cut it out as a works of fewer than two hundred people suggests Yukawa Kankichi’s intent to end dependence on imports. The more a division loses, the more it needs to be moved into a unit where responsibility and profitability are visible.

Independence, even so, was only half real. Casting and rolling into copper rod stayed with the rolling works, and Sumitomo Densen Seizosho paid a fee to be supplied; offices and packing areas remained shared. Output of about ¥700,000 in 1912 was less than a fifth of the leader, Yokohama Densen Seizo. Specialisation would not show in the numbers until the demand of the First World War and the Onkijima plant of 1916. Whether carving a business out succeeds is decided not at the moment of the carve-out but by how much investment follows it.