Reckoning

by David Halberstam

Tanaka knew nothing of automobiles and had had no interest in them until that moment, but he would have done whatever Professor Hayashi wanted anyway, and the fact that the job was in Tokyo clinched it. He came to Tokyo and was interviewed by four Nissan executives, including Takashi Ishihara, the future president of the company. Are you interested in the auto business? one of them asked. Oh, yes, said Tanaka, it is something I care about a great deal. Can you drive a car? the man continued. No, said Tanaka, but I can learn. He thereupon enrolled in a driving school and some two weeks later emerged with his license. He also went to work for Nissan. The men who interviewed him had warned him that they had plenty of able men and that advancement would probably be slow. But he did not mind. He was doing what his professor had told him to do. Hayashi was much more pleased with this assignment for Tanaka than he was with the one at Niigata. There was going to be more chance for the young engineer to experiment, he was sure. Besides, he thought, automobiles were a more appropriate challenge for the true Japanese engineer. Japan was small, and much of its landmass was not really usable. Thus the Japanese engineer must be skilled at dealing with the limits of space. Almost everything that was built in Japan had to be smaller and to use less space than would be required anywhere else. Autos were much smaller than ships, so Nissan was a much better place than Niigata for so talented a protégé as Tanaka.

  As he placed men like Tanaka at companies like Nissan, Professor Hayashi was also aware that something very important was happening. Because Japan had no defense industry, he knew, and not even an airplane industry, the best engineers of a generation were being funneled into other, seemingly more prosaic sectors, like automobiles, for example, and steel. These industries, which in America were having increasing difficulty competing for top engineers, were getting the absolute cream in Japan. This advantage in talent was already making a considerable difference, Hayashi believed, as Japan’s heavy industries began to compete in the world’s markets.

  16. THE FIRST VICTORY

  AT THE TIME OF the Nissan strike, Yutaka Katayama was a rising young executive in the company. He was a conservative young man of upper-class origins. His grandfather had been a rich landowner in Saitama prefecture, a man with some seventy acres of land, an immense plot in Japan, and some thirty tenant farmers. The grandfather had been an exuberant and enlightened man. Whatever was new, whether it was a bicycle, a car, or some device for the kitchen, he had to have it. He insisted that his sons go to college, even his first son, which was unusual in Japan, where the duty of the first son was to stay behind and work the land and learn nothing that would make him restless with his destiny. Yutaka Katayama’s father went to Keio, one of the country’s elite colleges, and then, instead of returning home as his father wished, pleaded for one year in business first. He loved business and the world of the city and never returned. That was somewhat shocking, a minor footnote to the steady urbanization and modernization of Japan.

  The family name was not Katayama but Asoh. When it came time for young Yutaka Asoh to marry—he wed the daughter of a man who worked for the Bank of Tokyo, a good marriage—he took his wife’s family name, Katayama, since there were no sons in that family. The Katayama family was Christian, so in the process he became a Christian too, though not a very religious one. His friends later thought it might have made him broader, less insular. He himself suspected it made him a good deal more aggressive, less accepting of fate, than most Japanese. Certainly travel had broadened him. His father had been posted to many different places, and wherever he went, the entire family went too, along with two or three maids. Later, as the head of Nissan in the American West, Katayama liked to check into Denver’s Brown Palace, a wondrous old-fashioned hotel with a huge central atrium. Standing in the lobby, one could look up and see ring after ring of balconies all the way to the top. Asked why he loved the Brown Palace, he explained that when he was young, his father had sent him to China to further his education, both intellectual and social. The Brown Palace reminded him of happy youthful days at an old Chinese whorehouse; you simply went in, clapped your hands, and girls would come running out of the rooms onto the balconies to greet you.

  Most Japanese in the years after the war wanted to forget the past, but Katayama, who had been excused from military service because of weak eyesight, still savored it. He was in no way burdened by the war. Unlike most Japanese, who came to regard the changes wrought in their society by Douglas MacArthur and the bright liberal young New Dealers around him as a major force for good, Katayama in many ways longed for the old order. MacArthur, he sometimes thought, was responsible not so much for Japan’s rise but for its decline. The three things that MacArthur had perpetrated from which Japan would never recover, he claimed, were women’s suffrage, the coming of management consultants, and the legalization of labor unions. Katayama’s family had lost almost all of its valuable land under MacArthur’s land reform. They had been able to keep two acres and the farmhouse. All else was gone. He never complained about this; he knew that this was right and humane, and that his family’s good fortune in the prewar years had been at the expense of many poorer people.

  Katayama’s privileged childhood had made him somewhat different from other Japanese. For one thing, it had given him a desire for a higher level of independence. For another, it had made him an absolute car nut. He had grown up with classic cars in his family. His father had owned two very sporty cars, an Erskine and a Star Durant. In the postwar years when everyone else was preoccupied with finding a place to live and something to eat, Katayama was obsessed with finding a vintage car to drive and a place where the roads were not so bad that they would destroy it. He organized the first postwar auto sports club in Japan. Its members were Japanese with fond memories of other days and a handful of American officers; their cars were a few treasured MGs and some prewar roadsters lovingly reconstructed. It was his love of cars that had brought him to Nissan. His fellow workers saw Nissan as a big company likely to expand. Katayama chose Nissan because it was about cars, and he was about cars, and he not only wanted to build them, he wanted to drive them. At one point in the early fifties, frustrated with the politics of Nissan, he tried to start his own company. He and a friend tried to design their own car, an ultralight car for people in a poor country where gas was expensive. The Flying Feather, Katayama named it. They built the prototype in the second story of a Tokyo building, then found they could not get the car out the door. Finally it was taken out through the window. He was, he decided, an insufficiently practical man to run his own company.

  That did not diminish his love of cars. When he was not working at Nissan, he was out driving a car as fast as he could. In a nation filled with laws and restrictions and inhibitions, racing around in a sports car was to him the highest form of personal freedom. Years later when he became the head of Nissan on the American West Coast and purchased a house in Palos Verdes, California, he continued to speed. It was said of Katayama that he had more speeding tickets than anyone else in town. At first he passed himself off to the local traffic cops as a simple Japanese businessman who knew no English, but the cops soon caught on. One of them would chase after him, catch up with his car, and say, “Good morning, how are you today, Mr. Katayama? And by the way, here is your ticket.” By the end of his tour he had a chauffeur, since if he had gotten another ticket he would have lost his license.

  At Nissan he was always anti-union. During the worst of the 1953 strikes, when the Masuda union had surrounded the plant and sealed off a few lonely management people inside the building, Katayama had taken great pleasure in slipping through the lines, bringing the semihostages not only food but movies. In his perfect world, there would be no unions. Managers would deal with their workers in a traditional, honorable Japanese manner that reflected well on both labor and management and that accorded both sides dignity and honor; in a slightly less perfect world where there had to be unions, management would make decisions, and labor could go through the motions of pretending that it had foug
ht valiantly to improve things. That kind of relationship he could understand. Masuda was anathema to him. But his troubles did not end with the fall of Masuda. He soon ran into trouble with the second, or Miyake, union and with the idea of labor as an extension of management. It was something he could not understand, and he resisted the new union stubbornly, with considerable detriment to his career. He resented the fact that people with union connections were getting the plum assignments within management, whether they deserved them or not. His friends warned him to keep his mouth shut, pointing out that the deed was done, that the right side had won, and that even if the union was abusing its victory, he ought to at least play it smart. Do not, one of his more senior friends warned, worry about what is good for the company; worry for once about what is best for Katayama. He never listened. When almost everyone else in middle management was joining the Miyake union, Katayama stood on the sidelines. “I was a conscientious objector during the war,” he said later. For that he was not forgiven. He eventually (belatedly, it was decided) joined, but he was never considered a loyal member. For one thing he turned down repeated requests from Miyake to run for union office. Each time he turned Miyake down, he knew he was cutting another part of his career off and throwing it away. “We have our friends,” Miyake once said to him, “and we have our enemies.” There were constant pressures and threats like this. Miyake had expanded his power greatly and was quite ruthless in keeping people in line. The Emperor Miyake, others in the company had begun to call him. Early on, Katayama had made another critical mistake. He had complained bitterly to members of the board that the union knew of important board decisions long before most people in management. This, he said, was unacceptable in a real business.

  He and a handful of others like him felt they were in a no-man’s-land in the company. Clearly the power of the union as a force within management, and as an agent of Kawamata’s personal control, was becoming stronger every year. The union and the personnel section of the company were virtually one and the same thing. Those who had challenged the new union—the management people who were uneasy with its new powerful role—were quickly pushed aside. Some quietly left the company. Subsidiary companies such as Nissan Diesel, which made trucks, became a refuge for these irreconcilables. Others were pushed out of the mainstream, and told to take jobs as Nissan dealers, a demotion of the first order. Katayama himself was desperate. His attempt to develop his own car had failed. He began to think seriously of leaving the company. He was not alone in his unhappiness. Good young executives were now leaving the company, not because they were afraid of being fired but because they did not want to work in a company that was run upside down.

  In those days Katayama was already a serious reader of all auto magazines; he did not speak English well, but he read it, and he read it to keep up with his beloved world of sports-car racing. That world, he realized, was a fantasy world, and his job at Nissan the grim reality. He had just about decided to leave Nissan when in early 1958 he read about an upcoming rally in Australia, a grueling nineteen-day run of ten thousand miles over rugged terrain. The Japanese, he thought, might just win a race like this. Their cars were not very good—in fact, they were graceless cars of questionable performance. But the one thing they were—and had to be, given how bad the roads were in Japan—was durable. The Australian rally would be over rough, rocky, often muddy roads; that was the only kind of road the Japanese knew. Nissan auto bodies were strong, and they had, whatever else, endurance. Japanese auto construction, Katayama knew, was not very sophisticated, not very original, but it was very solid. It was quite possible that Nissan could enter the competition and do well. It might not win, but it could surprise some people.

  On his own Katayama took the rules, painstakingly translated them into Japanese, and brought them to the board of directors. Almost no one else in the company was interested. There was, he thought, a pervasive inferiority complex to the Japanese in those days, and it extended to almost everything they did. His superiors, he believed, were afraid of entering. If they entered they might lose, and if they lost they would bring dishonor on their country, their company, and their careers. One of the most powerful forces in Japan, Katayama believed, was the fear of failure. When his superiors argued against it, Katayama always responded that if they were ever to enter any kind of competition, now was the time, because they had so much to gain and so little to lose. If they entered and lost, no one would blame them, and they would lose no prestige. After all, they had no prestige to start with. They were like invisible men, he said. That seemed a compelling argument, and eventually he won his case. He was a little old for the rally himself, because it was so arduous. Besides, someone had to be in charge of the team. But he knew some good drivers at Nissan, and he assumed that he would be able to put together his own team.

  He was soon disabused of this idea. There would be two sedans and four drivers, and the drivers would be picked by Miyake and the union. Katayama was appalled when the four union men showed up. They knew nothing about sports-car driving. They had been chosen for their political loyalty rather than for their driving ability. For a brief moment he considered bailing out of the project, and then he realized he had one great advantage. It was not that he was the head of the team or that he had a higher rank; these young men knew that they were better connected within the company than he was. It was that he, however primitively, could handle English, and they could not. They would be Japanese in a foreign land without any preparation for it. The moment they reached Australia they would be completely dependent upon him. He found that thought wonderfully comforting.

  He plunged ahead in preparation. It was not always easy. There were no test tracks to work out on, and the speed limit in Japan was sixty kilometers or roughly forty miles an hour. He and his drivers were often stopped by the police for speeding. They tried to explain that they were preparing for a race in Australia. Japanese racing in Australia? the police would ask in disbelief, barely able to hold back their laughter. Katayama would try to explain, but by then the police would simply wave them on. The police had no desire to arrest madmen.

  It went as Katayama expected. When the drivers, who had been hostile, arrived in Australia, they soon became terrified. It was a world without Japanese, where no one spoke Japanese. They pulled back inside themselves, clung to him, and listened to his every word as they had not back in Japan. Katayama was also right about the little Datsun car. It was rugged—built really like a small truck with a truck’s suspension. It was a poor man’s car from a poor man’s country. It lacked acceleration, it lacked comfort, its brakes left something to be desired, its steel was too thick because the Japanese steel industry was not yet sophisticated enough to deliver what the auto industry wanted. But it was perfect for this competition. It was a small tank disguised as a car. (Two of the drivers were, fittingly enough, former tank drivers.) It was supposed, once built, to last forever, and this rally was a challenge to durability rather than grace.

  Australia turned out to be a pleasant experience. Everyone was very nice to the Japanese. We are seen as the poor little gentlemen of Japan, Katayama realized; we have lost the war, rather badly, and everyone feels sorry for us and wants to help us. He was amused by that, and wondered how long it would last. The Volkswagen people were particularly friendly, and he was in awe of them, even more than he was of the Americans. The Americans were rich and powerful, but here was VW, fewer than ten years after the war, thousands of miles from home, and it was doing everything right. Its logistic base—the ability to repair what it sold—seemed especially strong, and the Volkswagen name was all over Australia.

  At the same time he tried to prepare for an upset. Every night Katayama took his own drivers out for beer. At these sessions he played on their nationalism, the Japaneseness of them all; they were all in this together, in the land of the gaijin driving against all these gaijin. Gradually they became a team, and gradually he took command of it. Then the race began, and he was surprised. He had th
ought the Datsun would do well, but not this well. The rugged Datsun held up; the one Katayama had named Fuji won, and the other finished well up in its field. In Japan, desperate in the postwar years for any kind of cheer, Katayama overnight became a national hero. He had given Japan a major victory. Upon his return, Kawamata, the president of Nissan for a year now, and most of the board of directors came out to Haneda airport to greet his plane. There was a huge procession into town, and thousands of people lined the way to hail him.

  For a year Katayama was a celebrity. He was also a man without a job. While he had been off in Australia his old post as advertising manager had been taken. By whom? he had asked, somewhat puzzled by this odd reward. “By a very active union member,” a friend told him. His disloyalty had not been forgotten, but for the moment his heroics were more important, and he spent the year going all over the country talking as modestly as he could about the triumph of Japan in Australia. He was intrigued by the response within Nissan. No longer denigrating their product, his superiors had now decided they were among the world’s best auto producers. He was amused by that. The Japanese had certain strengths, but only in manufacturing. What they knew about cars, and what they cared about cars, was almost nothing.

  Katayama enjoyed his celebrity for a while, but he soon became bored. He was also aware that it did not solve his real problem, which was whether or not he had a future with Nissan. Indeed, he realized, it might have added to his problem: In the past there had been powerful people who had disliked him; now that he had become something of a national figure, it was likely that those same people hated him. Now, more than ever, he was a marked man.

  So it was, after the triumph in Australia, that the people at Nissan began to think seriously about exporting cars. They had always known that they would have to export. They had delayed the decision for as long as they could, because theirs was so fragile and primitive a company. But if they were to win and dominate in the domestic market, then they would have to export cars as well, for the ability to export would greatly expand their volume and cut their costs. That would be crucial in securing a healthy share of the domestic market, which was what really mattered to them. Every car that they sold overseas would cut their costs at home. They knew that their workers were as good as those in America and Western Europe, perhaps even better, and they were paid less. Still, they were nervous about exporting to America. They had done some limited exporting, mostly trucks and buses, into Southeast Asia. But it was one thing to sell buses or trucks to the Thais and another thing to sell cars to Americans. Whoever made the decision to export into the United States would be blamed if the venture did not work. Careers were at stake.