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Start with Toyota’s history and the world into which it emerged. It may seem surprising, but Toyota’s success owes a lot to America. It all started when an American naval officer, Commodore Matthew Perry, in 1853 sailed into Tokyo Bay with his so-called black ships to force the Japanese authorities to open up trade. This affront undermined the power of the ruling Tokugawa Shogun ruler, because it demonstrated the weakness of the country under his rule. The ensuing unrest led to the Meiji Restoration fifteen years later, in 1868. This was really a revolution that reinstated the emperor in an effort to make the country stronger and to protect Japan from the “foreign demons.” The capital was moved from Kyoto to Edo, a port city on the east coast, which was renamed Tokyo. Japan started opening up. Under the control of a handful of oligarchs, with the emperor as a figurehead, Japan began importing Western technology in a bid to modernize and build its military power, leading later to wars with Russia and China.

Toyota was founded as a textile machinery business during this period. The car company, Toyota Motor, was not formed until 1938, and made only a handful of cars, on a craft basis, before it was assigned to build various military vehicles during World War II. It restarted car making after the war. By 1950, Toyota had turned out only 2,685 cars over thirteen years, at a time when Ford’s main Rouge plant in Dearborn outside Detroit was making seven thousand a day. Under the occupation rule of America’s General Douglas MacArthur, the economy was kept tightly controlled by credit restrictions to limit incipient inflation. This led to a slump in demand for cars and the need to lay off 1,600 workers in 1949. 

The American authorities had brought in labor laws that gave plenty of power to trade unions as part of the effort to promote democratic institutions after the militaristic imperialism of the previous thirty years. Toyota faced a disastrous strike and factory sit-in that brought the young car company to its knees, as it ran out of bank loans. The solution worked on between the owners, the Toyoda family, and the unions, was for the company president Kiichiro Toyoda to resign, taking responsibility in a typically Japanese manner for the misfortunes that had befallen the company. A quarter of the workforce was fired. Those who remained were promised lifetime employment, but in return they had to agree to do any work that needed doing and to be thoroughly flexible. Thus, the death knell was sounded for Ford’s mind-numbing assembly line, as Toyota gave birth to what is now known as flexible manufacturing.

One huge example of this was the way Toyota started using production workers to perform maintenance and other tasks, such as realigning the production line for changes in product. There is one striking early example that shows the genius of Taiichi Ohno, Toyoda’s personal manufacturing guru, for spotting simple solutions to difficult production problems. Way back in the early 1950s, he made a huge breakthrough when he found a way to change the giant 300-ton presses in the body shops that press out the panels that are welded to form the door, walls, and roof of the basic monocoque car body. With plenty of money for investment, the big manufacturers could afford to have separate press machines for different parts. This meant fewer changes of dies by specialist contractors that usually took a whole day to perform, during which time production workers were standing around idle-wasting time and money. 

Ohno simplified the process by using rollers rather than cranes to maneuver the huge dies. This simplified the whole process to the point where it no longer required specialized contractors, and the production-line workers could be used to perform the work. Before long, they could do in three minutes what previously had taken a whole day. Just as important was the demonstration of the principle of flexible working that was a benign legacy of Toyota’s traumatic strike in 1950. Needless to say, the company has never had a strike since, and flexible working is one of the hallmarks of Toyota assembly lines. MacArthur had by this time done something else to shape the economy of Japan that was to prove even more determinant in the rise of Toyota. He had smashed the formidable pre-war industrial trusts known as zaibatsu that had carved up the Japanese economy among them. Some of these old names-Mitsubishi, Mitsui, Sumitomo-survive in a watered-down form known as keiretsu, but the smashing of overbearing zaibatsu holding companies meant the way was open for young, dynamic companies with names such as Sony, Panasonic, Honda, and Toyota. 

Excerpted from Page 118-121 of ‘Zoom: The Global Race to fuel the car of the future’ by Iain Carson and V Vaitheeswaran