Licensing infrared burner technology from Schwank of Germany (1957)

The man who paid ¥200 million, and the man who took it from there

The character of this decision shows in the size of the fee: $555,556 (¥200m). A company whose annual sales had not reached a billion yen paid a fifth of that for the right to use a method of combustion that had not yet been proved to sell. The man who signed was president Hayashi Kanekichi; the man who later recalled how hard the sum had been to find was Naito Akihito, then still on the engineering side. What was bought was deliberately narrow — the principle of how to burn, and nothing else. Building it into stoves, and the fabrication around it, stayed in-house. The limit of what could be paid and the boundary of what did not need to be paid for appear to have been judged in the same moment.

Buying technology from abroad was, in itself, a common enough choice for Japanese manufacturers in the 1950s. What lasted at Rinnai was less the contract than what happened in the nine years after it: the side that carried the technology became the side that ran the company. Naito Akihito, of the family that had taken charge of combustion development, became president in 1966, and the following year a technical centre was built so that research and productization stood in two stages rather than one. The premise of 1957 — that the part which turns a bought method into a product is filled in by yourself — was reinstalled in the shape of people and organization.