Mitsubishi Heavy Industries (MHI)
Corporate History & Strategy

Background: Acquisition of a government shipyard and building a business base in Nagasaki

In 1887, the Mitsubishi zaibatsu acquired the Nagasaki Shipyard — originally established by the Tokugawa shogunate in 1857 as the 'Nagasaki Ironworks' — through a government sale. Mitsubishi's aim was to secure its own domestic shipyard to eliminate the inconvenience of sending vessels all the way to Britain for repairs, a necessity for its core shipping business. This was the zaibatsu's first shipyard, and it began operations under the name 'Mitsubishi Shipyard.' From this point, shipbuilding became MHI's founding business and Nagasaki its birthplace.

Throughout the Meiji era, the Mitsubishi Nagasaki Shipyard built ocean-going vessels for merchant shipping companies as well as naval warships, demand for which surged during the Sino-Japanese and Russo-Japanese Wars. In 1911, the battlecruiser Kirishima was launched at Nagasaki, and with Mitsubishi's lobbying of the government, the shipyard grew into one of Japan's premier shipbuilding facilities.

Decision: Establishing a three-site system and incorporating as a joint-stock company

To further expand its shipbuilding business, Mitsubishi established the Kobe Mitsubishi Shipyard in 1905 as a second site, followed by the Hikoshima Mitsubishi Shipyard in Shimonoseki in 1914, building a three-site shipbuilding system across Nagasaki, Kobe, and Hikoshima. Dispersing operations across multiple sites enabled parallel construction of warships and merchant vessels, expanding order capacity.

In 1917, Mitsubishi decided to operate each business division as an independent joint-stock company, and the shipbuilding division was launched as 'Mitsubishi Shipbuilding Co., Ltd.' The company changed its name to 'Mitsubishi Heavy Industries' in 1934, making it the direct predecessor of today's MHI. The transition from a division within the zaibatsu to an independent corporation increased the shipbuilding business's managerial autonomy and laid the groundwork for subsequent diversification.

Background: Electrical manufacturing as a derivative of shipbuilding

Mitsubishi Shipbuilding's electrical business originated as a byproduct of its shipbuilding operations. In 1898, when the Nagasaki Shipyard completed the European-route passenger vessel 'Hitachi Maru,' it employed cutting-edge technology by using incandescent lights rather than oil lamps for onboard illumination. As 'ship electrification' became decisive, by 1904 the Mitsubishi Shipyard had begun producing marine generators, entering electrical equipment manufacturing as a subsidiary business of shipbuilding.

The Kobe Shipyard, established in 1905, also set up an 'Electrical Division,' which together with the Nagasaki Shipyard's 'Electrical Section' manufactured electrical equipment as a department within the shipyards. However, shipbuilding — centered on assembling steel components — and electrical equipment manufacturing — requiring precision engineering — differed fundamentally in workshop equipment, material procurement, and personnel allocation. The inefficiency of running an electrical business within a shipyard gradually became apparent.

Decision: Establishment of Mitsubishi Electric and separation of the electrical division

In response to these challenges, Mitsubishi Goshi Kaisha planned the independence of Mitsubishi Shipbuilding's electrical division. In 1918, an 80,000-tsubo site was secured in Nagoya, and preparations began for a dedicated electrical factory. In November 1919, as the first step toward independence, the Kobe Shipyard's Electrical Division was separated to form the 'Mitsubishi Shipbuilding Co., Ltd. Electrical Works.'

On January 15, 1921, Mitsubishi Electric Corporation was established. It inherited Mitsubishi Shipbuilding's electrical business and was designated as the dedicated electrical company within the Mitsubishi zaibatsu. The former Electrical Division of the Kobe Shipyard became Mitsubishi Electric's Kobe factory. The Nagasaki Shipyard's Electrical Section, being primarily engaged in producing shipbuilding-related equipment, was transferred to Mitsubishi Electric's Nagasaki factory several years later in 1924.

Result: Establishing the foundation as a dedicated electrical manufacturer

The Kobe factory's product range was diverse, including DC generators, AC generators, transformers, switchboards, and electric locomotives, primarily manufacturing electrical equipment for power companies. Independence from the shipyard enabled the free introduction of workshop equipment suited for electrical manufacturing and the recruitment of electrical engineers, improving both product quality and production efficiency.

In 1924, the long-planned Nagoya Works was established, commencing operations as a mass production factory for general-purpose motors. This was an investment in equipment that would have been impossible had the division remained within the shipyard, and the spin-off of the electrical division provided the impetus for establishing Mitsubishi Electric's growth foundation.

Establishment of Mitsubishi Heavy Industries for wartime military production expansion

Throughout the 1930s, Mitsubishi Heavy Industries intensified mass production of military products for the Navy and Army. In 1934, Mitsubishi Aircraft and Mitsubishi Shipbuilding merged to form Mitsubishi Heavy Industries, becoming one of Japan's foremost military-industrial enterprises capable of mass-producing warships, aircraft, and tanks.

In shipbuilding, the battleship 'Musashi' was completed at the Nagasaki Shipyard in 1938. In aviation, production of the Zero Fighter began in 1943. In vehicles, the Maruko factory was established in Kanagawa Prefecture in 1937 to build a tank mass production system.

Background: Resumption of aircraft production triggered by the Korean War

After World War II, GHQ had completely prohibited aircraft production in Japan. However, following the outbreak of the Korean War in 1950, U.S. policy toward Japan shifted. In 1953, the U.S. government expressed support to the Japanese government for aircraft production (military), and a plan was launched for domestic production of the F-86F 'Sabre,' the U.S. military's primary fighter aircraft.

MHI decided to resume its aircraft business, centered on the Nagoya Works which had handled wartime aircraft production. In 1953, a new factory was established in Komaki, Aichi Prefecture, and preparations began to develop the manufacturing base needed for fighter production. The technology and experience in aircraft manufacturing cultivated during wartime became the foundation for entering licensed production of U.S. military fighters.

Decision: Licensed production of the F-86F and entry into the defense industry

In 1955, domestic aircraft production was formally decided through intergovernmental agreement between Japan and the United States. In August of the same year, MHI received the adoption decision and production order for the F-86F from the Defense Agency. With technical support from North American Aviation, the manufacturer, MHI commenced knockdown assembly production from 1956. F-86F contracts were executed in three phases through 1961, with the company producing a cumulative total of approximately 300 aircraft worth approximately 18 billion yen.

Through F-86F production, MHI built a relationship with the Defense Agency (now the Ministry of Defense) and subsequently secured orders for successor aircraft including the F-104J, scaling up licensed fighter production. By entering early in the market's infancy, MHI secured first-mover advantages, and the domestic licensed production market for military aircraft became an oligopoly shared between MHI and Kawasaki Heavy Industries.

Reunification of the former Mitsubishi Heavy Industries

The three companies separated from the former Mitsubishi Heavy Industries under zaibatsu dissolution — Shin Mitsubishi Heavy Industries, Mitsubishi Nippon Heavy Industries, and Mitsubishi Shipbuilding — began studying remerger. In July 1963, the boards of directors of all three companies resolved to conduct joint deliberations on merger, and in August a merger preparation office was established.

Fair Trade Commission review

Since the merger would create a major enterprise with revenue of approximately 300 billion yen, the Fair Trade Commission conducted a review of whether it would violate the Antimonopoly Act, concluding by January 1964 through an 'attached request letter' that there were no issues except regarding paper-making machines.

Establishment of the new Mitsubishi Heavy Industries

On June 1, 1964, Shin Mitsubishi Heavy Industries, Mitsubishi Nippon Heavy Industries, and Mitsubishi Shipbuilding merged to establish Mitsubishi Heavy Industries, Ltd.