Reckoning

by David Halberstam

  He had come from accounting, not engineering, and the esteem he inspired among the company’s best engineers was marginal. His strength was that he knew money and had the confidence of the men who ran the bank, and yet, unlike Kawamata, he had not come from the bank, so was not viewed by his executives as an outsider. His imposing size also had helped—he looked like a man of industry. But the principal dynamic of his success was ambition; he was zealous in the pursuit of his own interests, as befit a man who had waited so long in another’s shadow. “There is nothing more ambitious in Japan,” said one of his friends, “than a man who reaches sixty and has not yet attained his goals.” His life was the company, nothing else; he thought of virtually nothing but his work. That single-mindedness surprised some of his colleagues. It was not just that Ishihara and his wife did not have any children; it was that unlike most very successful Japanese they did not adopt any, even children from other members of their family, until late in their lives. A nephew of Mrs. Ishihara, named Tadashi Yoshikawa, came to live with them when he was a student and eventually went to work at Nissan. Only when he was about thirty did the Ishiharas adopt him. To the men around Ishihara, that was extremely puzzling.

  Ishihara was sixty-five when he succeeded Kawamata, and in Nissan the tales of his maneuvers were many: stories of his doing deals directly with West Germans or Italians and not only cutting out the local Nissan people but never even mentioning the deals to them; stories of his competing with Katayama in the United States, undercutting the deals that Katayama had worked out with International Harvester for Nissan engines. It was not that his behavior was unusually self-interested for a Japanese executive; it was that he so nakedly wanted the credit. Within the company some who might normally have been his allies, finding they could make no connection with him, pulled back from him as he seemed to pull back from them. The Island, that was what some men called him.

  Now Ishihara, like the heads of other Japanese companies, was under mounting pressure to become more international, to deal with foreigners in ways he had never done before, and to open plants overseas. That entailed an immense challenge for Ishihara, who for all his success in America was basically an isolationist Japanese businessman, filled with the normal prejudices of his generation. What he would be seeking was a new kind of relationship with foreigners, which one American who closely monitored the auto industry in Japan called “no-fault internationalism”: Nissan would flirt with places so desperate for a new factory that they would give Nissan exceptional benefits. For as the Japanese had become richer and more powerful, they had changed: They were no longer the supplicants in the world economic order; they no longer had to ask Westerners for favors. Westerners now asked them for favors. That change was reflected in the new attitudes of Takashi Ishihara and Nissan.

  Among the first to notice the change was Pat Greathouse, who handled international affairs for the UAW. Greathouse was an old friend of Ichiro Shioji, and he had started visiting Japan in 1973, returning often. During his visits Greathouse began talking to the Japanese about their responsibilities in America: If they were selling that many cars there, they should start thinking of generating some jobs there as well. Obtaining a Japanese factory in America had surfaced as a major UAW objective. Greathouse, in fact, believed that Nissan had given him a commitment rather early on, and that the only unanswered questions were about what type of plant the Japanese would build and where they would build it. If it was an assembly plant, he gathered, it would be on the West Coast; if it was a manufacturing plant, it would likely be located near Kansas City.

  In those early meetings Greathouse was pleased with the way things were going; he thought he was developing rapport with Masataka Okuma, who was the executive vice-president. Okuma, as far as Greathouse was concerned, made it clear that the Japanese were coming to America and that when they did, theirs would be a union plant. Someone better versed in listening to Japanese businessmen might have understood what Okuma was saying quite differently, realizing that it was what he was not saying that mattered. But the UAW people, like most Americans new to dealing with the Japanese, heard the answers they wanted to hear. In 1978, on what he hoped would be a decisive trip, Greathouse was warned by his friend Shioji to be less optimistic. Nissan, he confided, was pulling back from its original plans for an American factory. The mood was shifting, he said, and because of personal conflicts with Ishihara, his own ability to help Greathouse was declining. Greathouse therefore spent a fair amount of time warning the Japanese executives he met of a rising tide of protectionism in America, and that the best way to defuse it was to build a plant in the United States. At the end of his trip he and Shioji held a joint press conference at which they both endorsed the idea of Japanese production in America. Almost off the top of his head, Greathouse suggested the 250,000-car rule; A company that sold more than 250,000 cars a year in the United States should build its own factory there. The figure was based on the optimum production for a two-shift, sixty-cars-an-hour factory.

  Greathouse felt that the Japanese were toying with him. Ishihara, for example, was always extremely polite, but he was not as forthcoming as Okuma. An evening would end pleasantly, but when Greathouse later tried to assess what was promised, there was nothing tangible. Besides, Greathouse sensed for the first time that underneath the courtesy was a disdain for America. Ishihara left him with a feeling that he, Ishihara, considered himself the representative of a superior culture talking to a man of a lesser one. Greathouse, as a representative of a powerful union in a dominating industry in the world’s richest country, was not accustomed to the disdain of anyone he met, let alone foreigners.

  Shioji, with his strong connections to the UAW and men like Woodcock, Greathouse, and Fraser, his friends and sponsors, wanted a plant in America, he wanted to make autos, not trucks, there, and he wanted it to be a union plant. The UAW had supported him when the Japanese auto industry was small and fragile, and now that it was strong he owed them comparable support. Besides, a union plant in America would enhance his own position as an international labor leader. What was particularly frustrating for Shioji, and was probably responsible for some of the extreme bitterness he was now exhibiting toward Ishihara, was that on this most crucial issue he, for so long virtually the most powerful man in Nissan, was unable to deliver. Shioji was always sure that no matter how wary Kawamata would have been on this issue, if he were still president, Shioji could have brought him along. Now with Ishihara heading the company, not only was his own influence diminished but his weakness was being revealed. Shioji’s position was awkward, Greathouse thought. More than anyone else in the company he was committed to an American plant, and among people as chauvinistic as the Japanese, that position could easily be used against him. An alliance with the Americans, once a major asset in Japanese life, was now something of a liability.

  Ishihara had always regarded the United States as a place of customers rather than workers. He had a fairly typical Japanese businessman’s attitude about a pluralistic, multiracial society with aggressive, highly independent unions. Despite his years of doing business in the States, he had no ties to America. Once when an American reporter asked him for a list of his American friends, Ishihara had not even paused to reflect. “I have a few counterparts that I do business with,” he said, “but I have no friends there.” In private he had always derided the skills of American workers and the quality of their products, his criticism bordering on contempt. When he visited American factories, he said, he always found them dirty; the workers, by comparison with Japanese workers, looked indifferent and always seemed to be taking a break. America, which was such a paradise in which to sell, was as far as he was concerned something of a hell in which to produce. Since he did not know America in any depth, he feared it and so was uncertain about which way to go. The issue had been before the Nissan board, in one form or another, for almost ten years, and everyone was leery of it. The solution had always been to delay the decision.

  In the days a
fter the oil shock, the equation changed. Now the pressure to build a plant in America mounted. Because the American industry was so clearly in trouble, protectionist feeling began to increase in America, and those feelings were always magnified in Japan. Because of the intense nationalism of Japanese society, a nationalism reflected in even the best of Japanese journalism, every incident in America, whether it was a congressman complaining about Japan or Detroit workers smashing a Toyota, was amplified in Tokyo. To the Japanese it seemed that what they had always feared was now beginning to happen; they were being resented for their success—and their race. None of this, in Ishihara’s view, made his decision any easier. Ishihara also feared that if he made a huge commitment to produce cars in America, the Americans might then put their companies back in order, produce cars of excellence again, and strand the Japanese on American shores. That was not a singular fear; Toyota, which was even more nervous about moving into America, was troubled by the same scenario.

  What made the negotiations more difficult still was that they coincided with the growing feud between Ishihara and Shioji. The antagonism between the two men went back more than twenty years. Ishihara had always regarded the relationship between Kawamata and Shioji with misgivings; in 1957, during the move against Kawamata, he had not only stayed on the sidelines but been prepared to step into the vacuum the coup might create. Like many senior managers he came to resent the union’s influence in the higher levels of the company and the fact that Shioji often seemed better informed about what Kawamata intended to do than the board did. Indeed, it was said, Ishihara had first heard of his own promotion to the presidency when Shioji, stopping him in the hall outside of Kawamata’s office, said, “Congratulations—he’s going to name you president.”

  When Ishihara became head of the company, it should, he felt, have been his to run. Kawamata had become chairman, and normally in Japanese companies chairmen let the presidents do the actual running of the company. But Kawamata refused to let go of his power. He had in fact become closer to Shioji than ever, for now, more than ever, they needed each other. Their alliance, based on opposition to Ishihara, strengthened. For Kawamata, now somewhat removed from the fray, Shioji was a link to the active daily company life and a brilliant source of information. As long as Kawamata was allied with Shioji, it would be hard for Ishihara to move against either of them, hard for him to make the company his own. For Ishihara it was terribly frustrating. By 1977 he had been with the company for forty years, and yet he still could not put his own mark on the company. He groused to friends about the difficulties he was having, about Kawamata’s stubbornness, and especially about the malign power of the union. “It is like a cancer growing right in our body,” he would say. Of the ability of Kawamata and Shioji to dominate decisions at every level of the company, he once told a colleague: “It will take us thirty years to undo what they have done in thirty years.”

  What started as a territorial rivalry with Shioji became a fullblown feud. Though the basic issues that divided the men were often real—Ishihara’s desire to control all personnel decisions, Shioji’s desire to locate a Nissan plant in the United States—what truly divided them was ego and love of power. People who knew them both thought them too much alike. Both were domineering. Neither knew how to share power. Each felt he was the rightful heir to Nissan. Each thought he would never be able to hold the power he craved as long as the other was there. So the struggle, ever more ferocious, went on for some eight years. There was no doubt that it damaged the company, if not to the naked eye in America, where Nissan seemed strong and successful (though with increasingly dull cars), then certainly in Japan, where it began to slip well behind Toyota. At the height of the tension between the two men, one of Shioji’s old friends, a writer named Saburo Shiroyama, stopped to talk to him one day. “How long can this go on? Things are getting very bad.”

  “They might get worse,” Shioji answered.

  “Can’t you work things out?” Shiroyama asked.

  “No,” said Shioji. “Ishihara must quit.”

  That reply did not surprise Shiroyama, who believed that if he had asked the same question of Ishihara, he would have gotten the same answer.

  Thus in addition to the other problems they were encountering with Nissan, the Americans inadvertently were running into this one as well. Their principal ally was Shioji, and what Shioji wanted, Ishihara almost certainly did not want. That did not help Pat Greathouse, who continued to visit Japan regularly. He began to identify two potentially dangerous and conflicting currents in nations that were supposed to be allies. In America, where the auto industry was showing early signs of decline, he sensed a growing resentment against the Japanese and a rising protectionism, not on the part of the UAW leadership, which was still essentially internationalist, but on the part of the workers themselves. At the same time, he detected in the Japanese something approaching cockiness. Things that they really thought about America but had once kept veiled they now were expressing more openly. It was as if now that they were making better cars than the Americans, they were sure that they had a better society. One reflection of that was a decreased interest on the part of Nissan in building a plant in the United States. It was not surprising then that by 1980 Greathouse was thoroughly tired of dealing with the Japanese.

  That February, Doug Fraser, president of the UAW, was scheduled to go to Japan as part of a special group of American leaders who had been encouraged by U.S. Ambassador Mike Mansfield to meet with their Japanese counterparts and solve some of the vexing mutual problems. Greathouse kept warning Fraser that dealing with the Japanese was different from dealing with other foreigners. Their manners were better than their follow-through, he said. At Fraser’s first meeting with Ishihara, however, good manners were not the problem. The UAW people brought up the subject of how difficult it was to export goods to Japan, and Ishihara said that the Japanese market was open. That immediately severed the bonds of civility, for the UAW people would not tolerate a polite ceremonial dustoff; they were offended by the implication that they were so stupid that they did not know how intricately protectionist a society Japan was. The meeting went downhill after that. Fraser tried to talk about the impact of the flood of imported cars on America’s economy, and he became furious when in his opinion Ishihara juggled the figures. Fraser insisted on the figure that had become the generally accepted one, roughly 360,000 cars a year from Nissan alone. But Ishihara seemed determined to use the figure adjusted for the slowdown that took place in those months just before the crisis in Iran. Have I really come all the way to Tokyo to have this man cook the books on me and treat me like an idiot? Fraser wondered. Soon they were shouting at each other.

  “Your problem in America,” said Ishihara, “is of your own making. It is your work force—it is your whole American system. Nobody wants to work.”

  To Fraser this was a surfacing of the scorn that he had always suspected men like Ishihara felt for America. “You wouldn’t understand America,” he answered, “because you’re so undemocratic a man, and you come from so undemocratic a country. But if I had to choose between the two countries, even with all of our problems, there would never be any problem. You wouldn’t even know how to exist in a free country.”

  Greathouse, sitting in on the meeting, wary of whirlwind American visits to Japan, felt that Fraser’s very anger would only confirm in the minds of the Japanese how contentious the union was. Fraser, on his part, believed that Greathouse had been too soft on the Japanese. The Nissan and UAW groups were supposed to go to dinner together that night, and for a time it looked as though the dinner would be canceled. It was finally held, and the atmosphere was a bit more relaxed, and two days later another meeting was called, and at this meeting the Japanese said they were going to construct a plant in the southern part of the United States. A few months later Nissan announced that it would build a truck factory in Tennessee. The commitment that Pat Greathouse thought he had won, that the plant would be a UAW one, was clearly n
ot a commitment at all. This plant, if Nissan had anything to do with it, would be nonunion.

  The episode was a bitter one for Shioji. Later he apologized to Fraser. He said that he had tried as hard as he could to make sure that the factory was in the north, but that from the start, despite his promises, or his seeming promises, Ishihara had no intention of dealing with the UAW. Of Ishihara he said, “He looks like a lion but he has a heart the size of a pea.”

  Fraser was at first somewhat pleased by that outcome, although he never knew whether his burst of anger had helped persuade the Japanese to build the plant or had killed any chance of its being union. But any job, he believed, union or nonunion, that went to an American was better than one that remained overseas. The more Fraser learned about the Tennessee plant, however, and the degree to which Nissan intended to resist the UAW, the angrier he became. Anger was not his style. More than almost anyone else in the union Doug Fraser was regarded as unflappable; his trademark in the rough world of American unionism was his ability to get along with almost anyone. It was not surprising that he was the first UAW member to sit on the board of directors of one of the Big Three auto companies or that his fellow board members often spoke of him with greater fondness than they spoke of each other. But from then on, when he referred to Ishihara he did so with genuine venom, not just because Ishihara had insisted on a nonunion factory in America but because Ishihara, who had delayed so long the decision on building a plant in the States, was now pushing as hard as he could to place a factory in England. Even worse, Ishihara had said that Nissan would be willing to deal with British labor. For Fraser that was a particularly personal affront, like a slap in the face. “It’s such a goddam double standard,” he said, “I really can’t control my anger. I can understand that the American model is hard for the Japanese, that it is a very different kind of labor relationship. I can almost accept that argument, though it is hard for me not to argue with it. But to go to the United Kingdom! To deal with five unions there! Five British unions! What the hell kind of excuse is there for that? Just what the hell kind of excuse is there for that?”