ABSTRACT
In the Introduction, I pointed to gaps in the socio-economic approach to the history of Japanese–German relations. With this in mind, I laid out the themes of Japanese– German ties in the inter-war period based on a business history perspective and, in particular, on their history of international business relations. I would like to draw some conclusions relating to the development of these themes over the nine chapters, looking at the issues from the angle of strategy and organizational structure as well as the results of technology and management transfer.
Chapter 1 presented an overview of the history of Japanese–German business relations. Consideration was given, first, to the special features of the inter-war period, notably the Japanese quest for German technology, the economic competition, and the cool economic calculation that contrasted with warming political ties. Then it showed that, for German companies, the Japanese market was characterized by a trend toward rapid expansion and protectionism, but that Japan remained a free market in relation to international cartels. Note was made also of how German companies continued, as far as they were able, to pursue an export strategy, and when their export strategies were restricted, how they preferred licensing to direct investment. The various forms of inter-firm relations were then examined: in trade, German firms focused on exports of iron and steel products, machinery, and chemical products; while licensing, especially for machinery, was closely linked to the exportation of products. It was demonstrated that most representative German firms were actively engaged in exporting and licensing activities in the Japanese market, while direct investment in Japan by German manufacturers was rare, although trading companies were active investors.
The focus of Japanese–German trade relations in the inter-war period was exportation from Germany to Japan, particularly of machinery and chemical products. Chapter 2 dealt with dyestuffs as a representative chemical product. Representing the international dyestuff cartels, I.G. Farben, the sole German exporter to Japan of dyestuffs, succeeded in concluding a series of specific agreements with individual 219Japanese firms as well as with the Japanese dyestuff industry as a whole. In this way, I.G. Farben hoped to secure a dominant position in the Japanese dyestuff market. However, I.G. Farben and the other cartel members were forced to make successive concessions, and eventually they failed to restrain the ambitions and capabilities of the Japanese firms in developing new products and expanding into the Asian market.
The other two chapters in Part II dealing with export strategy both looked at machinery. In Chapter 3, consideration was given to the competition between Mitsubishi Shoji and C. Illies, major trading companies of Japan and Germany, respectively, for exports of the Rheinmetall anti-aircraft gun. In the end, neither company won this business, the reason being the bottleneck created by both countries’ shortage of foreign exchange; but, in comparing the competitiveness of the two companies in this particular battle, it was concluded that Mitsubishi was the stronger company, and that this strength could be explained for the most part by Mitsubishi’s technology and close government ties.
In Chapter 4, the focus was competition and cooperation between German manufacturing companies. Specifically, relations between Krupp and I.G. Farben were examined, focusing on exports to Japan of Krupp’s high-pressure reaction pipes for synthetic oil. Having received a large number of enquiries from the Japanese military, as well as from Japanese private companies, Krupp and I.G. Farben competed for this business while simultaneously looking for ways to cooperate. Krupp, however, was unable to obtain an export license from the German authorities, even after the signing of the Tripartite Pact in 1940. The main reason for Krupp’s failure was the refusal by the German authorities to grant an export license; but, looking specifically at the competition between the companies, another cause was seen to have been the failure to cooperate with I.G. Farben, whose interests were mainly in licensing.
Part III was concerned with licensing. Chapter 5 dealt with the case of the Krupp-Renn process. This was a success story, although manufacture in Japan was accompanied by technical difficulties. The reasons for this success were the strength of demand from the Japanese side, combined with the leadership exercised by the government-run Showa Steel Works in creating an organized cooperative approach, and, on Krupp’s side, the systematic linkage of exports with licensing.
Chapter 6 dealt with I.G. Farben’s Haber-Bosch process, focusing on the efforts by Taki Fertilizer Works in introducing the process. This also was a success story, although it was accompanied by technical problems as well as by a series of conflicts between I.G. Farben and Taki. The most important reason for this success was, apart from the technological superiority of the Haber-Bosch process, the strong demand from Japanese manufacturers.
Chapter 7 examined I.G. Farben’s attempt to license its process for synthesizing oil. This was a failure, in contrast to the above cases, although I.G. Farben made 220every effort in trying to license its process and export its equipment to Japan. Analysis of the three possible reasons for the failure – that is, the opposition of the Japanese navy, the position of International Hydrogenation Engineering and Chemical, an international patents’ pool organization, and the terms that I.G. Farben could offer to Japanese clients – led to the conclusion that the opposition of the Japanese navy was the most decisive factor; at least, by the middle of 1939, it had had the most adverse impact on I.G. Farben’s fortunes in Japan.
Chapter 8 considered the failed attempt by a Japanese company to license to Germany. In this attempt, a joint-venture company was established in Germany, and the Shimadzu method of making lead powder for batteries was a candidate for licensing to this company. The major reason for the failure was the late time at which patent rights for this method were obtained in Germany.
Finally, Chapter 9 looked at the most important example of German direct investment in Japan: namely, the case of Siemens. The chapter focused primarily on telephone equipment and automatic switchboards in particular. The course of Siemens’ strategic efforts was, first, to persist in a forced export strategy based on an agreement to divide world markets; second, to pursue a strategy of local manufacturing, which was forced upon the firm by the Communications Ministry and Furukawa; and, third, also under duress, the separation of the manufacturing company from the joint-venture company with Furukawa. This led to the gradual elimination of Siemens’ management rights over the subsidiary.
