Company history

Okuma Eiichi, twenty-eight and lately arrived from Saga, opened a noodle-machine shop in Nagoya in January 1898 with ¥300 raised by selling three machines his father-in-law had given him. Six years later he used the cutting and drive-mechanism design he had learned there for something else: with demand rising ahead of the Russo-Japanese War, in February 1904 he began making machine tools. Lathes and milling machines were then imported, so there was room for anyone who could supply them domestically — and that switch fixed the company’s axis for the next century.

The First World War filled the works with army ordnance orders, including a cartridge-loading machine said to be beyond anyone outside London; finishing it made the company’s reputation. It became Okuma Iron Works in 1916 and a joint-stock company in 1918. Eiichi tried twice to escape dependence on machine tools — netting machinery in 1936, and from 1935 an attempt at automobile manufacture, the Atsuta, built with two partner firms — but cost and the outbreak of war with China in 1937 ended the car and sent the company back to volume production of machine tools, employing 10,000 people by 1945.

After the surrender it made wool-spinning machinery under the name Okuma Kogyo while Muraoka Karoku, the works manager since 1906, held it together as president. In 1948 he handed the presidency to Okuma Koichi; the company listed in Nagoya, Tokyo and Osaka in May 1949 and took back the name Okuma Iron Works in 1951.

Okuma Koichi had lectured on machine-industry theory at the University of Tokyo, and his engineering cast of mind produced the company’s defining decision. In 1963 Okuma developed its own numerical control, OSP. The industry was moving the other way: leave control to the specialists and concentrate on the machine. Koichi reasoned that a bought-in control could not be tuned to the character of the machine, and that outsourcing it would narrow how far Okuma could differentiate itself. The Oguchi plant opened in 1969 to concentrate volume production of lathes and machining centres.

The bet did not pay for a very long time. The NC division ran at a loss year after year, and the culture of the 1960s put technical completeness ahead of whether a thing would sell — the company built an early prototype of a flexible manufacturing system and showed it in the United States, where visitors admired it and nobody bought it. Then the 1973 oil shock cut orders from ¥17.5 billion in the year to March 1973 to ¥11.6 billion two years later; losses accumulated to ¥3.6 billion by September 1977. Okuma shed 380 employees — about a fifth of the workforce — sold its company hospital and 40,000 square metres of the head-office site, and was openly discussed in the trade as a company that could fail at any time.

In early 1978 Koichi resigned after thirty years as president, on the same day the union accepted wage cuts and a freeze on increases. His successor Okuma Takeo, adopted into the family and a salesman rather than an engineer, disposed of all six company cars on his first day, made the board’s top decision-making body one that included union officers, abolished the vice-president and senior-director grades so that the president dealt with department heads directly, and sold nearly all the bank shares that had been the company’s hidden reserve. What he changed in the business was the direction of development: from machines that satisfied engineers to machines that sold. When Japanese manufacturers began adopting NC machine tools in earnest that same year, Okuma machines carrying OSP caught the recovery, and the company was profitable again within a year of his appointment — reaching a record ¥5.5 billion of ordinary profit in 1980.

Recovery was followed by localisation: a US joint venture with Mitsui & Co. in 1984, American production in North Carolina from 1987, two West German distributors bought outright in 1988 — taking their customers with them — and a second Japanese plant at Kani, Gifu, the same year. Matsutani Akira, a former deputy governor of Tokai Bank who became president in the late 1980s, called the company’s combination of machine and control kiden ittai, machine and electronics as one, and wanted the town-foundry image gone. In April 1991 the ninety-three-year-old name Okuma Iron Works became simply Okuma Corporation.

The bubble broke almost immediately, and demand collapsed for the second time in seventeen years. Between late 1993 and 1994 Okuma cut 676 people against a plan of 500, and — with union agreement — proposed lowering the retirement age from 60 to 56. No Japanese company had done that, and on 11 January 1994 the Labour Minister summoned president Maeda Yutaka to explain himself. Okuma withdrew the retirement measure, kept the redundancies, and Maeda resigned in March 1994. What the company took from two rounds of cuts was not a technique for cutting but a rule about publicity: restructure as an internal procedure and never raise a flag about it. That lesson would shape how it handled the next crisis.

A Chinese manufacturing joint venture followed in Beijing in 2002. In October 2005 Okuma converted to a holding company — and unwound it nine months later, absorbing the holding company and three subsidiaries back into a single operating company in July 2006, when Hanaki Yoshimaro, a career Okuma man who had led the operating subsidiary, became the eighth president. For a firm in one business, formally separating a group mattered less than running machine, control and casting together.

Sales of ¥167.3 billion in the year to March 2009 fell to ¥60.3 billion the next — roughly a third — with a ¥15.0 billion operating loss, a ¥18.8 billion net loss, and every region in deficit. Hanaki, a little over two years into the job, faced the sharpest contraction in the company’s history. Remembering 1976 and 1994, he held redundancies down and put the money into production instead.

The result was the Dream Site programme: DS1 in 2013 for medium and large multitasking machines and NC lathes, DS2 in 2017 for smaller lathes and grinders, DS3 at Kani in 2019 for machining centres — three integrated plants in six years, each running machining, assembly and inspection under one roof. The point was not extra capacity. Okuma built these factories with its own machines under its own controls, so the 1963 decision to keep control in-house was finally being used at full stretch, and each plant doubled as proof to customers that the machines worked. By the year to March 2019 sales had recovered to ¥211.7 billion with a 13.0% operating margin, and roughly 48% of revenue came from outside Japan.

Ieki Atsushi succeeded Hanaki in June 2019, by which point the US–China trade dispute had already begun cutting orders, and sales fell 19% in the year to March 2020. His message to the company — do not be moved by every swing, strengthen the constitution — was the quiet-rebuilding doctrine of 1994 restated by a new generation. He also named the direction: the Reiwa era as the age of automation, and specifically reasonable automation — machines robust and intelligent enough to be adopted by ordinary shop floors rather than bespoke installations. That is the same design philosophy the company has held since 1963, aimed at a world short of workers. Sales reached ¥227.6 billion in the year to March 2023, near a record, and 3.8 times the 2010 trough.