NSK - Company History

It began as the first company in Japan to mass-produce bearings

In November 1916 Nippon Seiko was established in Shinagawa, Tokyo, with capital of ¥350,000[1]. It came into being on 8 November 1916 through the reorganisation of its predecessor, the partnership Nippon Seiko Goshi Kaisha, into a joint-stock company[2], and Yamaguchi Takehiko (山口武彦) became its first president[3]. It was the first company in Japan to begin the industrial production of bearings[4], and it set out as a specialist maker created to produce at home, rather than import, a component that is required for as long as the machines that transmit power keep turning — railways, machine tools, motor cars. In the Japan of that time almost every bearing was an import from Europe, and no mass-production technology had yet taken root in the country. Yamaguchi Takehiko, the founder, had seen through to the structure by which a component as small as a bearing underpins the precision and the reliability of the entire machinery industry[5]. The name NSK, from Nihon Seiko Kaisha, was in use from the founding years, and from the moment of its establishment this was a company that took upon itself the task of supporting, from below, the precision of Japan’s machinery industry.

From the founding through the years of post-war reconstruction, the emphasis lay on stacking up domestic production sites. The Fujisawa plant was raised in 1937, Otsu in 1953 and Ishibe in 1959, one after another[6], and in 1960 the company established Kita Nihon Seiko in Maebashi, Gunma Prefecture. That company was reorganised in later years into NSK Steering Systems[7], and it is the headwater of the steering business that half a century on would be the central actor in a carve-out. A seed planted in the founding years had, in effect, prepared the stage for a management decision in the twenty-first century. Keeping step with the post-war expansion of the car, electrical-equipment and machine-tool industries, NSK added domestic production capacity. It can be said to have consolidated its footing as a bearing maker that held standard and special products together.

In its founding years NSK advanced the domestic production of bearings under a connection with the Navy. Former Navy men stood at the centre of its engineering, and its production plans began under Navy support[8]. The first Japanese-made bearing, arrived at through repeated prototyping, was delivered to the Yokosuka Naval Arsenal, and the first bearing made in Japan for a domestic aircraft was likewise used as an NSK ball bearing[9]. On the civil side, tapered roller bearings were adopted for the DAT of Kaishinsha, the pioneer of the Japanese motor car[10], and the commercial base spread across both the Navy and general industry. Sales offices followed — Osaka first in 1920, then Nagoya, Kokura and Sapporo — extending the sales channels[11], and in 1932 NSK tapered roller bearings were chosen for the axles of the National Railways’ new petrol railcars. These were the first railway-vehicle bearings made in Japan[12]. At the Tamagawa plant, opened in 1935, the company moved to mass production on automatic machinery imported from Europe and America[13], and in wartime it mass-produced bearings for tanks and aircraft at the military’s request[14]. At the end of the war most of its plants were designated for reparations, but Tamagawa and Fujisawa were exempted[15] and remained as the footing for post-war rebuilding.

Going abroad in the 1960s, and a pivot towards car components

Once the post-war high-growth years began, Nippon Seiko started to extend its footing overseas. In December 1962 it established NSK Corporation in New Jersey in the United States[16], and in October 1963 NSK Deutschland in Düsseldorf, Germany[17], setting about building sales networks in the Americas and in Europe at the same time. Germany was the home ground of the bearing major Schaeffler, and placing a local base there was in itself a challenge. Breaking into the distribution networks that the established European and American makers had built was not easy, but NSK put its sales organisation in place in step with the global expansion of the car makers. It was also among the earliest instances of a Japanese bearing maker holding a full-scale sales network abroad, and the layout of overseas bases in the 1960s became the foundation that would support its later position as number three worldwide.

In 1964 it launched NSK-Warner as a joint venture with BorgWarner of the United States[18], deepening its involvement in components for car transmissions. Local production followed sales in stages — the Peterlee plant in Britain in 1974, the Clarinda plant in the United States in 1975[19]. The Saitama plant came on stream in 1975[20] and the Fukushima plant in 1984[21], adding capacity at home and abroad. Keeping step with the growth of the car industry, the company shifted its weight from a pure bearing maker to a bearing maker that also made car components. This change in the business structure became the axis of NSK’s management for the half-century that followed, and it was also the origin of a dependence on the car industry that it would carry as a distinguishing feature and a weakness at the same time.

Groundwork in Korea and China under the Cold War

In September 1987 NSK established NSK Korea in Changwon, South Korea[22]. It coincided with the period in which the Korean car industry was beginning to grow its exports, and NSK held a local manufacturing base there as a Japanese component maker. By the end of the 1980s NSK had laid bases across the main regions of the Americas, Europe and Asia, and had expanded the scale of its sales. At home it established the Fukushima plant in 1984[23], and abroad it had put in place an organisation covering almost every major region other than Eastern Europe and China. Riding the wave of industrialisation that followed South Korea’s economic development plans from the end of the 1970s, NSK raised its presence in the Asian markets and consolidated its international standing as a Japanese bearing maker. The reading that placed local bases just before car production in the countries of Asia got going fed directly into the growth in results in the 1990s.

Through the 1980s NSK was consolidating a leading position in the Japanese bearing market while hurrying to raise the share of sales earned overseas. Bearings are a capital-intensive business in which standard and special products are mixed together, and recovering the investment in plant requires both geographic spread and scale. The rush of base-building in this period created the physical foundation that would support the later global expansion, and it was the run-up to the acquisition of UPI in Britain, the entry into China and the entry into Poland in the 1990s[24]. It was a decade of firming the ground on which to go after large orders from the car industry, and the period in which NSK put in place the base from which to catch SKF and Schaeffler, the two European makers ahead of it. Competition with the European players might be favourable in the domestic market, but abroad the contest was decided by differences in the speed of localisation, and NSK was preparing the ground for the acquisition it would stake on in the 1990s.