Retrenchment under a suspended dividend: the “Crisis Breakthrough 2-4 Campaign” and the “0-1-2-3 Plan” (1974)

What do you hold up during three years of cutting?

Nihon Kohden’s missed dividends began before the oil shock: the first lapse came in the 22nd term, ending July 1973, with a $98,540 (¥27m) loss caused by a long strike and intensifying competition. What makes the Crisis Breakthrough 2-4 Campaign striking is that in August 1974, the same month it was pushing through heavy staff cuts, the company also began carving the Fukuoka branch out into a sales subsidiary. The hand that was shrinking the business and the hand that was rebuilding the way it sold were moving at the same time.

That two-handed play did not work immediately. The 24th term produced an ordinary loss of $378,840 (¥111m) and the dividend lapsed again; the works at Tomioka went as far as layoffs. Even in the 25th term, which set out to restore the dividend, ordinary profit came in at roughly half the plan. Only after those two failures did Ogino Yoshio raise the 0-1-2-3 Plan. At the end of three years in which management could speak of nothing but cutting, being able to show an order in which things would be taken back — zero debt, the listing, the dividend, the bonuses — can be seen as the turning point of the recovery.