Authors: Robert Whiting
‘You speak Nihongo?’ he growls in stilted English, waving his pistol.
‘No,’ says the man, quaking with fear.
‘Japan small company,’ says Ando. ‘America big company. You go home.’
‘Y-y-y-y-y-es,’ says the American, cowering on his bed.
Heading for the door, Ando turns for one last admonishment.
‘And when you come to Japan, learn to speak Japanese.’
At the time the movie was made, one must remember, Japan already had the world’s second-largest economy.
For some American companies in Japan, success came ridiculously easy. Encyclopaedia Britannica made a killing in the 1960s and early 1970s selling English encyclopedias to education-conscious parents who believed that owning a set of such exalted English books would somehow help their children get into good universities – regardless of whether anyone in the family could read them or not. One Britannica salesman, arrested for late-night harassment of a recalcitrant customer, sold two sets of the $800 encyclopedias to jailhouse guards during his seventy-two hours of incarceration – a feat that helped him win the Salesman of the Month award.
But the Britannicas were the exception. In all, it took a certain mind-set to make it in Japan that not everyone had – a certain single-minded dedication and a willingness to undertake guerrilla warfare if necessary. Consider the case of one Ed Ransburg. Ransburg owned an Indianapolis-based company, Ransburg Electrostatic Painting; he had perfected and patented a spray paint
gun, using an electrostatic process that caused the paint to wrap itself around an object and adhere to it. Ransburg had invented the process in 1942 and had been selling it to American manufacturers of cars, washing machines and refrigerators. His company charged royalties on the basis of the percentage of the cost of paint saved: 10 percent for a large flat panel, and 30 percent for a round tubular object.
In the late 1950s, when it became possible for foreign companies to do so, Ransburg filed for a patent in Japan. He discovered, however, that many Japanese plants were already using his process, among them Matsushita Electric, Sanyo and Hitachi. Those firms had sent representatives to the United States to see the painting process, they had taken samples of the equipment back to Japan, they’d broken it down, copied it, and began using it, without paying royalties. By Ransburg’s count, there were 400 companies using his process without permission.
He went to see several of the larger firms and asked them to pay. All of them refused and even joined forces to form something called the Household Equipment Manufacturers Association to fight off potential lawsuits. So next the American went to the Ministry of International Trade and Industry. He asked officials there to order the Japanese manufacturers involved to pay a 30 percent royalty – standard in such cases. The MITI men rebuffed him as well. Japan needed to foster as much domestic growth as possible, they explained, and to avoid marketplace ‘confusion’ – a term Japanese government officials were using increasingly more often to justify to their American counterparts what amounted to price fixing and market share allotment. MITI would only consider a figure of 5 percent.
Ransburg was furious. He engaged the services of attorney James Adachi, a Japanese-American from Wyoming who was one of a select group of foreigners granted special permission to practice in Japan. The first thing Adachi did was to talk him out of suing.
‘You can’t bang Japanese over the head,’ he said. ‘You need a
more subtle approach. You can’t hit a Japanese curveball with a big American-style swing.’
Adachi looked around for a Japanese company that might be persuaded to form a partnership with Ransburg, and his eyes fell on a promising young motorcycle manufacturer named Honda, which had been using the Ransburg process to paint its bike fenders and tanks. Adachi paid the management a friendly visit and explained the situation. He appealed to their sense of fair play (something that many American critics of trade with Japan maintained did not exist) and suggested that some kind of joint venture with the American firm would prove beneficial to Honda’s plans for expansion to the United States (and, it went without saying, would avoid possible lawsuits in
American
courts over sales of their vehicles in that country).
After giving the matter some thought, Honda agreed that they had an obligation to the American manufacturer. They agreed that paying a 30 percent royalty was only fair, given the circumstances and said they would be happy to do so.
Legally, however, MITI’s permission was necessary for Honda to make the payments and Ransburg to receive them. Without it, nothing could be done, and Adachi doubted that that permission would be granted, given the powerful ministry’s well known arrogance and intransigence in regard to matters of international trade. Adachi had to develop yet another scheme to deal with that problem, as well.
If a Japanese judge issued a ruling that Honda had to pay Ransburg, Adachi reasoned, then MITI would have no choice but to accept it. Thus, with Honda’s consent, Adachi filed a prearranged suit against the bike maker on Ransburg’s behalf, a suit that Honda, as privately agreed upon, did not contest in court. Instead, the two parties entered into a judicial compromise whereby Honda agreed to pay damages deemed appropriate by the judge hearing the case.
That set up phase 3 of the Adachi plan.
Since there were strict foreign exchange rules in effect at the time in regard to paying dollars and sending money out of the country, Adachi had to establish a Tokyo branch of the Ransburg Co., as required by law, in order to receive money from Honda in yen and then file for permission from the Ministry of Finance for Ransburg Japan to legally accept said funds.
The Finance Ministry was as powerful and entrenched an institution in its own right as MITI. In fact, MOF and MITI often clashed in setting government policy, much to the consternation of the political leaders frequently caught in the middle. When MOF officials examined the court ruling and granted approval, having no real reason not to, MITI was forced to accede to Ransburg’s wishes. In the face of dual opposition from its powerful rival MOF, as well as the Japanese courts, the ministry decided discretion to be the better part of valor.
The members of the Household Equipment Manufacturers Association, publicly shamed by press reports of Honda’s magnanimity toward Ransburg, now suddenly began to experience pangs of guilt. One by one, they agreed they should pay royalties, too. Soon, everyone had fallen in line, and Ransburg was in business.
He bought land in Eastern Tokyo, where he put up an office building and opened testing facilities and an assembly plant. He formed a joint venture with a Japanese manufacturer of shock absorbers, brake drums and auto parts, and used that company to gain an introduction into the market, forming in the process the all-important
jimmyaku
(connections) with Japanese auto manufacturers. All this at a time when the nascent Japanese auto market was supposedly tightly sealed.
In time, the automotive companies became major users of the Ransburg paint spray system, and Ransburg dominated the industry until his death in 1991 – a time when robots were using his spray paint and paint guns. Even after the patents had expired in fifteen years and they were not required to pay royalties anymore, Ransburg’s customers remained loyal (including Toyota,
which had its own paint department, developed through Ransburg technology after a competing company they had owned was put out of business by Ransburg’s patent case; they stayed with him when legally they did not have to).
Adachi liked to tell that story as an example of Japanese fairness and to refute those who claimed Japan was a totally closed country. To others it meant something else.
Thomas Blakemore, the doyen of the foreign commercial legal community, had a client list that read like a Who’s Who of American industry. But even he was basically a skeptic about foreigners in business in Japan because of all the problems. There were just too many areas of the economy the Japanese had locked up, he would tell prospective clients, and they were not about to let foreigners in. He had his own story to tell to illustrate the difficulties of penetrating the Japanese market for potential new investors who came to him for advice: the tale of the Yozawa River Project and his efforts to introduce fly-casting to the Japanese.
Blakemore had been an avid outdoorsman back in his home state of Oklahoma, and sometime during the mid-1950s had fallen in love with a several-mile stretch of the Yozawa River, about an hour’s train ride west of Tokyo and set in a valley among beautiful trees and alpine hamlets.
The only problem with the river was that there were no fish in it, only minnows and fingerlings. Blakemore, a devoted trout fisherman, sought out one of the local village heads and suggested the idea of stocking the river with startup trout and establishing a fly-casting operation. He offered to bear all the expenses himself, and later, when it was all up and rolling, the village could charge admission fees and keep the profits. By this time, Blakemore was already a very wealthy person and, being civic-minded, wanted nothing more for himself than the opportunity to use the stream.
The village head thought Blakemore was out of his mind. Japan was a nation that subsisted on fish. No one in the country had ever heard of fly-casting before.
‘You catch a fish with a fly, not a worm, and throw it back?’ the man asked skeptically.
‘Yes,’ said Blakemore.
‘And you have to pay for it?’
‘That’s right,’ said Blakemore in his Oklahoma-accented Japanese. ‘It’s sport.’
The man walked away scratching his head, muttering that this strange foreigner’s suggestion was the craziest idea he had ever heard of.
Blakemore talked to a few other people in the area about the idea and they thought he was nuts, too. Who wanted to catch a fish he couldn’t take home?
Blakemore went to the National Fish and Game Commission, whose officials had never heard of fly-casting either. He pored over National Fish and Game laws, which offered no help either. So he began a laborious process of persuasion and negotiation with the various villages located along the five-to-six-mile stretch of stream he had had his eyes on.
To get them all together in one group, he arranged for the Daiei Motion Picture Company to show, at his expense, their latest samurai sword-slashing thriller at a local schoolhouse. It required bringing in a generator by truck for the special show.
Knowing how valued the word of a
sensei
, or teacher, could be in such a status-conscious country as Japan, Blakemore had prevailed upon a Japanese diplomat he knew who had been fly-casting with him overseas to explain the sport to the audience. He also recruited a noted Japanese fishing writer who was in favor of the project to follow with a speech of his own.
The movie was well received. There was lots of blood and one good rape scene. But it was all downhill after that. The audience listened to the diplomat describe the joys of fly-casting and to the writer explain the technique. Then Blakemore got up to give his spiel. He related how the operation would be set up, that he would assume all financial responsibility for stocking the stream (making
full use, he emphasized, of existing dams and a couple of natural breaks in the stream of water), and that a fee would be charged to fly-fish. Although in principle, only fly-casting would be allowed, as a special concession to the Japanese village, each person would be permitted to take home one or two fish: the rest, they would have to throw back. All profits would accrue to the villagers until the fish-for-pay enterprise was self-sustaining. At that point, they would take over paying the expenses from Blakemore.
The crowd was skeptical, to say the least. There was immediate opposition from many villagers who feared an invasion of fly-casters from outside. Younger people wondered where they would do their swimming. Women pointed out that Tachikawa and Fuchu US Air Force bases were nearby. GIs there were always causing trouble, brawling, raping and whatnot. What if they started coming around? More than one person thought the whole idea smelled of a scam. What was this foreigner up to?
Said Blakemore, ‘It was like I had dropped out of Mars with this proposal.’
There were other problems. No one person or group was really in a position to control fishing in the stream. There was no one to issue the right to start the operation. There was no satisfactory answer as to who owned the fifteen-mile-stretch of stream because the question had never been asked before. There was no local government organ that covered fishing there because nobody had ever fished there before.
As it turned out, there was, oddly enough, a local Fishing Society, even though there were no fish in the river. But the society, Blakemore was told, never went fishing. It existed for the sole purpose of a sake bust once or twice a year. Nevertheless, Blakemore tried his luck there. He visited the Fishing Society and proposed giving them 10 percent of the gross receipts if they would confer the right of use of one section of the stream – even though they in fact had no authority to grant such rights. The board of the Society readily agreed, and finally the ball got rolling.
An association with no controlling legal authority gave permission it had no right to give in return for money it had no right to take.
Ultimately, the elements began to come together.
The five hamlets along the stream each designated a representative to form a governing body to run the new Fly-Casting Enterprise. However, Blakemore kept having to agree to pay additional costs: wages for a ticket seller, a salary for a night watchman and security guard, reimbursement to village youth for unloading a weekly stock of fish brought in by truck. He also had to agree to sponsor an annual Fishing Festival when the May–September fishing season was over, in which fishing prizes would be awarded – all bought and paid for, of course, by Tom Blakemore. Blakemore submitted a list of prizes but the villagers adjudged it to be too short, since it was regarded as inconsiderate not to have something for everyone. Thus, the list grew to include additional awards in such esoteric categories as the oldest woman to catch a fish and another for the best blindfolded fisherman, until there were enough to go around for all.