Life of Automobile, The

by Parissien, Steven

  As late as 1954 the steel needed to make Japanese cars still had to be imported from the US. And when the Japanese did venture to make their own cars, the results were often disastrous. The tiny, appallingly built Subaru 360 of 1958, for example, was marketed by Malcolm Bricklin in the US under the refreshingly honest slogan ‘Cheap and Ugly Does It’; but the few Americans who were attracted by Bricklin’s campaign were soon dissuaded by Consumer Reports magazine’s verdict that the 360 was ‘the most unsafe car in America’.

  It was not until the late 1960s that Japanese car makers were able to export reliable and popular cars to the rest of the world on a significant scale. The first Toyotas reached Britain in 1965; the first Hondas and Datsuns three years later. Under pressure from the Americans, the Japanese government liberalized their protectionist trade arrangements, raising the quota for imported engines and automotive parts, and lowering the punitive tariffs on imported cars. By 1973 it was even theoretically possible for a foreign company to own a Japanese car maker. (GM had already bought a 34.2 per cent interest in commercial vehicle manufacturer Isuzu in 1971.) But in return for these concessions, Japanese car makers won invaluable toeholds in the world’s most lucrative market, the United States. In 1968 the Toyota Corolla became the first Japanese car to be manufactured in the US.

  Western car makers were suddenly apprised of a major challenge on their doorstep, and were painfully aware that Japan’s car makers enjoyed several important advantages. Wages were lower and productivity levels higher in Japan (most Japanese workers still worked a six-day week in the 1970s). And the highly efficient, just-in-time, Japanese supply system, which avoided stockpiling vast numbers of components and finished cars, meant that firms did not have a large proportion of their assets tied up in parts or unsold stock.1 It also meant that suppliers, and not car makers, were responsible for much of the quality control. This abdication of responsibility was to rebound on Toyota during the recall scandals of 2009, while the downside of the just-in-time philosophy was dramatically revealed after the earthquake and tsunami of May 2011, when many Japanese plants worldwide were forced to close.

  Japanese cars were also thoroughly tested before they were unveiled to the public, and were not, as was becoming increasingly the case in America and Britain, hurriedly released to customers in a misguided effort to maximize sales before faults had been properly identified and ironed out. Japanese automotive workers were also more flexible than their Western equivalents – able and happy to undertake a variety of tasks, rather than sticking to just one. The result was that manning levels at Japanese plants were far lower than in America and Europe. However, it is a myth that these hard-working car workers were better represented at senior management level than their Western counterparts. Workers were routinely represented on senior boards in Germany and Sweden; in Japan, however, their place was definitely on the shop floor.

  The first Japanese car maker to make significant inroads into Western markets was Nissan, which first marketed its cars under the Datsun marque. The car maker was effectively born in 1914 as DAT, an acronym derived from the three partners: Kenijiro Den, Rokura Aoyama and Meitaro Takeuchi.

  In 1931, DAT produced a small car, shamelessly plagiarized from the Austin Seven (already made under licence from Austin), which was given the anglophone name of Datson – ‘Son of DAT’. Two years later, the last syllable was changed to ‘sun’, as DAT’s management belatedly realized that ‘son’ in Japanese meant ‘loss’.2 But by the time the first Datson rolled out, DAT’s founders had been bought out. In 1931 the industrial entrepreneur Yoshisuke Aikawa, head of Japanese Industries – Nippon Sangyo, soon shortened to Nissan – took advantage of the Depression by buying up DAT and subsuming it into his huge industrial combine, or zaibatsu.

  Yoshisuke Aikawa was born in Yamaguchi City in Japan in 1880. He graduated from Tokyo Imperial University in 1903 and went to study cast-iron technology in America. Hugely impressed with what he had seen there – America was then the world’s largest producer of iron and steel – on his return to Japan he established a company, which he named Hitachi Metals. By 1931 this single firm had become a giant zaibatsu, with constituent companies ranging from DAT cars and Isuzu trucks to mining concerns and marine and life insurance providers.

  Aikawa, like most of the great car makers of the period, also began to dabble in rightwing politics. He was accordingly very well placed when, in 1937, the Japanese government sought to industrialize the fake client state, Manchukuo, which Japan had carved out by force following its invasion of northern China.1 Aikawa became Manchukuo’s industrial supremo and de facto ruler. The wily industrialist even managed to secure American bank loans to support the fledgling economy of Manchukuo, a state the US government refused to recognize.

  Aikawa was quick to acknowledge American expertise in the auto industry. On incorporating Kubota tractors into his vast zaibatsu, he found he had also acquired Kubota’s influential chief designer, American expatriate William R. Gorham. Aikawa soon transferred the talented Gorham to the far larger enterprise at DAT and, under Gorham’s direction, all of Dastun’s machinery and vehicle designs were bought from America. Shortly before the Japanese bombing of Pearl Harbor in 1941, Gorham took Japanese nationality; unsurprisingly, he remained in Japan after the war’s conclusion, being regarded in the US as a rank traitor. He died in 1949, revered by the Japanese and reviled in the country of his birth.

  While Gorham escaped retribution from the occupying Americans in 1945, Aikawa did not. The industrial magnate was arrested by the American military government and imprisoned for twenty months as a Class A war crimes suspect, largely due to his leading role in the rapacious Manchukuo administration. Aikawa was freed before his case came to trial, but not before his Nissan zaibatsu had been forcibly dissolved. In later years he successfully resurrected his business career, but preferred to concentrate on oil rather than automobiles, serving as president of Teikoku Oil and the Japan Petroleum Exploration Company. Yet he lived long enough to see his creation finally come of age. In the year of his death, 1967, Nissan took its first independent step and introduced its first viable home-grown car, the Datsun 510 saloon, powered by Nissan’s own, highly advanced, fourcylinder L engine. Two years later Nissan used the L engine as the basis for its first international success, the 240Z sports car.1

  The late 1960s saw phenomenal growth in Japanese car production. By 1968 Japan was manufacturing over four million cars per year, and exporting six hundred thousand. In that year American imports of Japanese cars more than doubled, from 82,035 in 1967 to 182,547 in 1968. The Datsun 510 was partly responsible for this outstanding success in America; badged as the Bluebird, and redesigned to a more crisp silhouette by the Pininfarina studio (although Nissan insisted that the Italians had to remain silent about their role), the 510 made substantial inroads into the compact car market, a sector that Detroit’s Big Three were still not taking seriously. In 1969 Nissan also introduced the 240Z to the US market, to great acclaim; the model was even voted Sports Car of the Year by America’s Road Test magazine. By 1970 Toyota was America’s second-largest importer of foreign cars (after Volkswagen) and Datsun the third-largest.

  As we have seen, Japanese car makers responded to the oil crisis of 1973 with a series of small, economic models which, while they lacked excitement and originality, offered what the customer wanted: compact build, guaranteed reliability, fuel efficiency, and fewer emissions. As a result, Japanese car exports to Western Europe and, particularly, America soared. By 1975 both Nissan and Toyota had overtaken Volkswagen to become, respectively, the largest and second-largest exporters of cars to the US. Japanese compact and midsize cars such as Toyota’s Corolla and Camry were soon serving as the default option for families and taxi fleets alike. Nor was Japanese success limited to America and Europe; Japanese car makers also penetrated worldwide markets that had previously been regarded as the preserve of the Big Three. As historian Daniel Yergin has observed, in the later 1970s, ‘The prolife
ration of Datsun pickup trucks in Saudi Arabia was a sign of the times’ – the Fords and Chevrolets that the Saudis had previously preferred having suddenly disappeared following America’s overt support for Israel.

  Japanese marques came to dominate the small sports car market which British manufacturers had so abjectly ceded. Nissan’s Z cars, descended from 1969’s groundbreaking 240Z, went from strength to strength; while the Toyota MR21 of 1984 was a clever composite of European and American forms and systems which not only freely borrowed elements from the Lancia Beta, Pontiac Fiero and Fiat X1/9 but also officially enlisted assistance from the men at Lotus, whose engineer Roger Becker helped design the MR2’s suspension and handling. Mazda responded to the MR2 with the MX5 of 1989,2 which Mazda publicly acknowledged was based on the Lotuses of the 1960s, and later built on this success with a more affordable sports model called (confusingly) the MX3. Where Jaguar, Lotus and MG once reigned supreme, Nissan, Toyota and Mazda now ruled the roost.

  In 1981 Japan became the world’s largest producer of automobiles, overtaking the US only thirty-six years after the country’s wartime defeat. Yet the initial response of the American automotive industry’s top brass was dismissive and condescending. The combative, arrogant and pasty-faced CEO of General Motors, Roger Smith – a name that was, as we shall see, to become synonymous with the appalling mismanagement of the US car industry in the 1980s – derided the Japanese as myopic mimics. ‘What did the Japanese invent in cars?’ he mocked. ‘The only thing I can think of is that little coin holder.’ But Smith stopped laughing when the Japanese manufacturers began making substantial inroads into GM’s market share. In response, the Americans tried to forge a series of quick alliances with a variety of Japanese companies. Chrysler started marketing Mitsubishi products under the Dodge name, while Smith’s GM agreed to a partnership with Toyota. GM even began to make assembly-line robots in association with the Japanese robot manufacturer Fujitsu-Fanuc. Unfortunately, the robots malfunctioned and the project proved a disaster; the vast amount of money wasted on the robot venture could, GM’s finance director later admitted, have been used to buy both Toyota and Nissan outright.

  European manufacturers were similarly forced to swallow their pride and cosy up to Japanese partners – firms that, a mere decade or two before, they had dismissed as imitative parvenus. As early as 1979 Honda entered into a partnership with British Leyland, which proceeded to sell rebadged Hondas as Triumphs and Rovers. By the end of the 1980s even the Germans were bowing to the inevitable; in 1989 Toyota entered into a partnership with Volkswagen to build a small pickup truck in Germany.

  Japanese car makers subscribed to a very different business ethos from their new Western partners. Each Honda employee, for example, carried a credit card-sized summary of the company philosophy – centred on principles of equality, teamwork and personal initiative – as enshrined in what the company’s founder, Soichiro Honda, termed ‘the Three Joys’: the joy of buying (i.e. of owning), the joy of selling, and the joy of creating. Toyota’s corporate creed was explained to its employees in a similar vein via the five principles of the Toyota Way: challenge, improvement (kaizen), genchi genbutsu (literally, ‘go and see’), respect and teamwork. And unlike many Western car makers, Japanese auto manufacturers concentrated on building the overall brand or marque as a reliable and trusted entity, rather than spending millions on promoting individual models. While the names that Japanese companies applied to their cars were often (quite rightly) criticized in the West as unmemorable or arbitrary, such censure missed the point. The Japanese preferred to foster the reputation of the overall manufacturer – Nissan, Toyota, Honda or Mazda – in order to create a guarantee of reliability and quality that could be extended to any model the customer bought, rather than to nurture the brand value of a model that would only have a limited lifespan. In the long term, their policy was to be proved right.

  While Nissan established the first foothold in Western markets, and Toyota grew to become the world’s largest auto manufacturer, it was their smaller but nimbler rival, Honda, that became the first Japanese car maker to make major inroads into the West. In 1979 Honda opened the first Japanese-owned motor plant in the US, at Marysville, Ohio.1 Marysville initially focused on making motorcycles, but in 1982 Honda took the plunge and began to produce midsize Accord cars there. Following Honda’s lead, Nissan erected an American plant at Smyrna, Tennessee, to build trucks; while Toyota not only opened a joint venture with GM in Fremont, California, early in 1984 but soon began work on a new factory in Georgetown, Kentucky. As journalist Paul Ingrassia has commented, in the 1980s: ‘It was the Japanese … who showed that American workers could build quality automobiles, and thus stripped away Detroit’s excuses.’

  From 1990 until 1993 the Honda Accord was America’s bestselling car, relegating Dearborn’s Ford Taurus to second place. (This was the first time a Japanese car had earned that accolade, but it was not to be the last.) By 2002 the Marysville plant where the Accord was made – and which Honda had originally promised would hire one thousand people – boasted a workforce of fourteen thousand. In that same year, Honda, which had just opened a second US plant outside Birmingham, Alabama, and had become America’s biggest importer of foreign cars,1 earned more money than GM, Ford and Chrysler combined.

  Honda was a latecomer to automobile manufacture. Famous for its motorcycles, the firm only started making cars in 1962. But it soon sought to outpace its larger rivals, Nissan and Toyota, by pioneering new technology and promoting international partnerships. As a result it was Honda, not Nissan or Toyota, that built the first Japanese plant in Europe, erecting a factory outside Swindon in 1985. (Once again, Honda’s rivals followed in its wake: Nissan opened a factory in Sunderland, the first single-union car plant in Britain, in 1986; while Toyota’s Burnaston complex, near Derby, opened in 1992.2) Honda’s new-look, fourth-generation Accord saloon of 1989, along with the refreshed V30 Toyota Camry, dominated the midsize car market in America during the ensuing decade. In 1998, too, the Honda Odyssey compact minivan3 became the first product to challenge Chrysler’s early lead in this valuable new sector. Soon even Honda’s bilingual robot mascot, Asimo,4 had become as familiar in America as in his homeland.

  The Toyota Motor Corporation sprang from an unlikely parent, the Toyoda Loom Works, established by Sakichi Toyoda in 1926 to make automatic textile looms. In 1933 Sakichi’s son, Kiichiro, set up a subsidiary to manufacture automobiles, which became formally independent of the main company (although still part of the Toyoda zaibatsu) four years later. At the same time, the decision was taken to change one letter of the brand name, to Toyota. This was not just easier to pronounce than the family name; ‘Toyoda’ is Japanese for ‘fertile rice paddies’, which was hardly an auspicious brand name for a would-be car maker.

  During the Second World War, Toyota made trucks for the Japanese army, but it found the transition to peacetime production difficult. Virtually bankrupt by 1950, the firm was only saved from disaster by the outbreak of the Korean War which prompted a timely order for five thousand military vehicles from the US Army. In 1957 the Toyota Crown became the first Japanese car to be exported to America, and in 1963 the firm established a factory in Melbourne, Australia. Yet it was not until the 1970s that the company began to witness rapid growth, as its small, reliable, if bland, cars found ready export markets abroad. The small four-door compacts of 1970 – the Carina, the Celica, the second-generation Corolla and the fourth-generation Corona – had a worldwide appeal, and did increasingly well in America after the oil crisis of 1973.

  In 1980 Toyota felt confident enough to replace the Corona in America with the larger and more powerful Camry, the first car the firm had specifically targeted at the American market. The Camry earned its curious name from an anglicization of the Japanese word for ‘crown’, kanmuri, variations on which had been used for most of Toyota’s previous models. The company’s ever-cautious American dealers had wanted the new model to be called the Crown, to
o; but there was already a car of that name in Toyota’s line-up, so Camry was chosen as an easily pronounceable compromise. The Camry was, like most of its stablemates, tame and dull – a ‘vanilla’ car, its Western critics asserted. But it was also reliable and well equipped, and held its residual value well, unlike most of its Big Three competitors. Since 1997 the Camry (which, like the Honda Accord, grew from a compact to a midsize vehicle) has been the bestselling car in the US and American manufacturers have been left floundering in its wake.

  …

  Japan was not the only nation to emerge as a global force in the car industry in the 1970s and 80s. In the aftermath of the Second World War, mechanic Chung Ju-yung set up Hyundai Engineering (hyundai simply means ‘modern’) in the sleepy Korean fishing village of Ulsan. In 1967 he moved into car manufacture, assembling British Ford Cortinas supplied in kit form. As yet, no one outside Korea (or Dagenham) took much notice.

  The scene now moves to Britain in 1973. In that year the former Ford executive John Barber was appointed Lord Stokes’s deputy, and effective successor, at British Leyland. Barber was a man who, like Stokes himself, believed strongly in the need to keep British Leyland much as it was: a centralized conglomerate with a diverse product line, ranging from the Mini to the Jaguar XJ6. In contrast, Barber’s principal boardroom rival, George Turnbull, wanted to break up British Leyland so that its constituent parts could flourish separately in the market. Subsequent events suggest that Turnbull was right and Barber wrong; but it was Barber who reflected his master’s voice and won promotion. Turnbull thereupon surprised the British motor industry not just by resigning from BL but by moving to the other side of the world, to South Korea. There the ambitious and shrewd Chung Ju-yung made Turnbull vice president of Hyundai, responsible for manufacturing the firm’s first locally made car.