"Mutual Trust and Friendship"
Communication from the Heart Sustained Honda (1954)


<< 1. Immediately after issuing that declaration, however,...
<< 2. Honda was gradually receiving shipments on ¥450 million...
<< 3. "April of that year, 1954, when the crisis started to hit Honda,...
 


Honda was gradually receiving shipments on ¥450 million worth of imported machine tools, but the products that would make full use of this new capability had yet to be created. However, payments could not wait. Furthermore, the first step would be to sell the huge inventory of 4Es, now that their problem had been solved. In a move to totally reverse the previous measure, Honda now had to cut production.

Fujisawa approached manufacturers who contracted Honda parts and requested their cooperation. He did not try to conceal the trouble that Honda was in as he explained the position to them. Fujisawa's book, Light the Torch with Your Own Hand, contains a passage that describes these events:

"On May 26, I called all of our outside contractors to gather at the Shirako Plant and asked them to accept postponement of part of our payments. 'We can't manage our payments as we have been doing until now. Therefore, we want to add upcoming purchases to our current balance and pay you 30% of that. We will not write any promissory notes, so what this means is that we're asking you please to bite the bullet for a while.' To write promissory notes on top of everything else would be very dangerous. Therefore, if we couldn't get them to agree, we wouldn't receive any more parts. Production would stop. I must say, I did some stuttering as I talked to them. When I managed to obtain their agreement, I was so relieved that I almost felt drained. Two or three of the firms went their own way, but most of them put themselves on the line and bet on the future of Honda Motor Co."

Sluggish sales and continuing customer complaints were also making for a tough battleground for the sales staff.

Nakano recalls:

"From morning till night, I was out running all over the place trying to collect some payments, to the point that at night I dreamed about printing money with a rotary press."

Nakano had joined the company wanting to be an engineer. However, Fujisawa said he wanted people who knew machines to be in sales, so Nakano was transferred over to the Sales Division when the Cub F-Type went on sale. At this time, he was assistant manager of the Kyushu branch office:

"One dealer said to me, 'I'm really sorry not to be paying you after I sold some of your products, but I still have all this inventory. If you really need money that badly, Mr. Nakano, why don't you take all these to a pawnshop? ' I didn't think I could stand it. I experienced insults like that, and I also drove through the rain on a heavy motorcycle at night, freezing, going around collecting on bills. It wasn't only the engineers who worked till dawn to solve problems. The sales side was doing something like that, too," he said, laughing.

Fujisawa went to Mitsubishi Bank, Honda's main bankers, to request assistance for the first time. His book, Light the Torch with Your Own Hand, again describes what happened:

"I told the bank everything. I didn't hide a single thing from them, but laid out all of our worst problems... If they have all the information, then banks can make the proper judgement."

At this time, the manager of Mitsubishi Bank's Kyobashi branch was Tokita Suzuki and the managing director was Fukuzo Kawahara. Their wide judgment resulted in the bank providing Honda with full support.

"The Mitsubishi Bank provided us the definitive assistance in carrying out this surgery, and Honda Motor Co. must never forget this as long as it continues to exist. I particularly want you to remember the name of Branch Manager Tokita Suzuki, who cast himself wholly into convincing the directors to share his belief in Honda. He never wavered in this effort, despite the difficulties that enveloped his task, and devoted himself entirely to communicating his faith in us," wrote Fujisawa in the Honda Company News (No. 12), as published in January of the following year, 1955.

In December 1954, the workers' union had entered collective bargaining over their demand for a year-end bonuses. Kazugo Morii, then secretary-general of the Saitama workers' union, related his memory of that time:

"People say that we had made demands that were unrealistic in terms of the company's position, but that wasn't the case. We weren't hoping to get huge sums of money. At that time, we were all poor. It was the difference between eating and not eating, and there were some people who had to come to work without bringing any lunch. But that's probably hard to imagine, today. It's wonderful to be number one in the world, but we couldn't live only on a dream of the future. Our union hardly had any members who wanted to fight just for the sake of fighting. We were all na?ve young people and ordinary family men and women. That's why, when the union held a general meeting, we quickly agreed to go without the May vacation. When it came to the year-end bonuses, though, the company may not have had much cash in reserve, but they didn't give us any explanation. They simply came back with a very low offer.

We thought that the top management should give us an explanation, and asked to negotiate directly with Mr. Fujisawa. Mr. Honda's attitude was a combination of amazingly fresh thinking, for instance calling the plants and the R&D center 'my place,' together with a traditional boss-man mentality all mixed up together. We understood that, so we didn't ask for Mr. Honda to come to the meetings. We all felt that we didn't want to hurt the feelings of the Old Man, who was such a childlike, innocent person without any selfishness in him. That's how considerate the employees were in dealing with the president. I guess that could only happen with someone of the Old Man's natural virtue."


The year-end bonuses amount that Fujisawa proposed to the union was a uniform ¥5,000 for everybody. The union was asking for ¥25,000. That was the average level at the time.

In the book titled Management has no Ending, Fujisawa wrote:

"I went by myself to appear before 1,800 [union members]. The chairman of the executive committee asked me, 'What do you think of this ¥5,000 figure?' I replied, 'There's no question, it's a low figure. However, what if we were able to pay a little more, and then the company later went bankrupt. When people asked why we hadn't held out a little longer at this point, as a manager, I wouldn't have any excuse to offer them at all. Rather than that, I'd like to hold off until next year. Our products should start selling again by March, and we could negotiate collectively again at that time.' I guess everyone understood what I meant, because the applause sounded like thunder. It didn't stop. The chairman declared, 'The collective bargaining is now over,' and still more applause filled the hall. As I walked out through their midst, I heard people calling out from both sides of me, 'We're counting on you! We're counting on you!" and I couldn't hold back my tears. Really, I wept as I promised in my heart that I would do it no matter what."

Remembering those days, Morii spoke with great emphasis:

"Honda was blessed with wonderful employees. I want that to be remembered. The pure-hearted people who responded in this way to Mr. Fujisawa's persuasion were giving support from below to Honda in its crisis."
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