|The R&D Center that never was
| A special meeting was held in Tokyo early in 1962 to promote the establishment of Soseikai, an incorporated foundation. According to the minutes of that meeting, Chairman Fukuzo Kawahara (and former executive vice-president of Mitsubishi Bank, then-director of Mitsubishi Metal Corp.) proposed that Takeo Fujisawa (then the senior managing director) explain the purpose of establishing Soseikai. Fujisawa began with the following statement:
Fujisawa spent a great deal of time explaining the second Soseikai objective. He stressed that unless the R&D Centers independence was secured and the dignity of research maintained, they would be hard pressed to expect significant results. This meant that the Research Division was to remain independent from the structure shared with other divisions handling various tasks such as manufacturing, sales, and accounting. Fujisawa argued that by using 50 percent of the shares held by Messrs. Honda and Fujisawa as a basic asset for the incorporation of a foundation that could be permanently maintained, a force would be created to counterbalance the gigantic influence of major shareholder Honda Motor. Research centers could therefore expand significantly, Fujisawa said, if such equally strong forces were allowed to bring their independence into full play without interfering with or pressuring one another.
Fujisawa added that such R&Ds independence is ideal for manufacturing companies. He said that in time the public would come to appreciate their worth, and that similar R&D centers would spring up everywhere.
Kawahara, upon listening to Fujisawas explanation, voiced his respect for Fujisawas passion and vision for the establishment of Soseikai. However, he expressed a certain concern regarding the fact that Fujisawa placed such an emphasis on his second goal. He feared that it might invite inaccurate speculation that the aim of establishing the new foundation would really be to enhance the mutual prosperity of Honda Motor and Honda R&D, and that the first goal would be of secondary importance.
After the debate, the prospectus for the establishment of Soseikai and the candidacies for director and trustees of the foundation were deliberated. With Kawahara representing the establishment of Soseikai, an application was to be filed with the Ministry of Education for permission to establish a foundation.
Tasku Date, then the director of Honda R&D and a nominee for the Soseikai directorship, looks back on that time:
With the establishment of American Honda and a string of decisive wins in the Tourist Trophy (TT) races, 1962 opened with Honda ranked as the worlds top motorcycle maker both in name and reality. Moreover, the company was gaining a foothold in the automotive industry. At about that time, the company was preparing to issue ADRs (American Depository Receipts) in New York to procure funding on a worldwide basis. It was the underwriter Goldman Sachs that warned Honda that a plan to convert Honda R&Ds share percentages to 50 percent ownership by Honda Motor and 50 percent by Soseikai might invite suspicion in the minds of ADR investors, and thus precipitate difficulties.
A R&D center should rightfully be a subsidiary of Honda Motor, Date remembered. It was simply unfathomable, and inexcusable, that the research center could exist outside the control of the parent company. As a condition for issuing ADRs, the plan for Soseikai was completely denied.
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