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Friday, 9 May 2014

History of Toyota. Part 14 (1936-1937): Construction of the Automotive Department Assembly Plant and Koromo Plant

Establishment of Toyota Motor Co., Ltd. and Construction of the Koromo Plant
Toyoda Automatic Loom Works was licensed under the Automotive Manufacturing Industries Law in September 1936 and became obligated to establish automobile mass production systems. The plan for the Koromo Plant, which called for monthly production of 2,000 units, had to be completed one way or another, but the construction costs were estimated to be 30 million yen, far in excess of the fundraising capacity of Toyoda Automatic Loom Works, which had capital of six million yen. Accordingly, the establishment of a new company with capital of 32 million yen and raising funds from a broader range of investors was investigated. External circumstances created pressure for the rapid completion of the Koromo Plant, however, and as a result, a new company with capital of 12 million yen was established, plant construction rapidly commenced, and the additional construction costs were borrowed.
In accordance with this plan, Toyoda Automatic Loom Works' Automotive Department was spun off and Toyota Motor Co., Ltd. was established as a new company. The new company's inaugural general meeting was held on August 27, 1937, and registration was completed the following day. The company's basic information at the time of the establishment was as follows.

Business purposes:
1)Manufacture and sale of automobiles;
2)Iron and steel making and other refining;
3)Manufacture and sale of aircraft, spindle and loom, and general machinery; and
4)Research and invention concerning the preceding paragraphs and the use of such invention and research
The business purposes were nearly identical to the content of the Articles of Incorporation revised at the extraordinary general shareholders meeting of Toyoda Automatic Loom Works held on January 29, 1934, with the only differences being "powered transportation machinery" changed to "automobiles" and "aircraft".1 Including "invention and research" in the business purposes was carried over from Toyoda Automatic Loom Works, and the stance concerning the pursuit of research and creativity was maintained.

Executive Vice President Kiichiro Toyoda observing the Koromo Plant during construction
Shortly after its establishment, Toyota Motor Co., Ltd. conducted a ground-breaking ceremony for the Koromo Plant on September 29, 1937. At the time, Japan was under a wartime system, and not only was the price of steel extremely high, it was difficult to obtain steel for construction. It is said that Toyoda Automatic Loom Works' Steelmaking Department cooperated with the construction of the Koromo Plant by manufacturing reinforcement bars for use in reinforced concrete.2 The plant was constructed under these difficult circumstances, but the plant was completed through the concerted efforts of the entire Toyoda Group.

Aerial view of the Koromo Plant near completion
A portion of the plant construction was completed in April 1938, and the relocation of equipment from Kariya began. Construction of the entire plant was completed at the end of September that year, and the relocation of machinery and equipment from the Kariya manufacturing shop and assembly shop was finished by the end of October. On November 3, the anniversary of the birth of the Emperor Meiji, a completion ceremony for the Koromo Plant was held with the participation of plant-affiliated parties.
Toyota Motor Co., Ltd. was established on August 28, 1937 (the registration date), but it was decided that the company's founding would be designated as November 3, 1938, the effective date of its start as a company (the date of completion of the Koromo Plant).
Construction of other facilities including a test track and an aircraft research building commenced after November 1938 and were completed by March 1939.
The plant layout drawings for the first phase of construction of the Koromo Plant, which was completed in November 1938, are as shown in Figure 2-1. The site area was approximately 500,000 square meters, and the building area was approximately 200,000 square meters. Total construction costs were 45 million yen.

Installation of equipment at the Machining Plant No. 3 of the Koromo Plant (October 1938)
As can be seen in Table 1-5, the Koromo Plant was an integrated production plant that included all processes necessary for automobile production including casting and forging blank processes, machining, mechanical assembly, stamping, body assembly, painting, and overall assembly. Each process was laid out so they were connected, and the Koromo Plant formed the basis of future plants.
With regard to the continuity of the processes, various transport conveyors were installed in sand processing facilities and casting sand transport systems in the casting plant as well as the painting plant and the final assembly plant with the aim of flow production based on the Just-in-Time system (see Item 5.). Initially, a conveyor system was not installed in the machining shop, but overhead space was provided in the plant building and electric lines and steam and compressed air pipes were placed in underground pits or on poles to avoid interference with other facilities when a conveyor was later installed and secure the space needed for a conveyor.
In addition to these direct production facilities, the plant also included a test track, forging (blacksmithing) shop, maintenance shop, warehouses, a cafeteria, and more. The engineering divisions included the Administration Office (including the Engineering Officers Office), Design Office, Chemical Testing Office, Vehicle Testing Office, Aircraft Research Office, Photo Office (Drawing Office), and Prototype Office. In addition, the site also included a head office Administration Office, dorms, a school (to train technical workers), and other administrative and benefit-related facilities.

Kiichiro Toyoda made the following statement concerning the significance of the Koromo Plant:
“Our mission is to make the car a more complete, more convenient, and more economical product. We have been investigating the question of whether there is a way to make these improvements as quickly as possible without any sacrifices for the past five years. It requires fundamental reforms in plant organization.

We made substantial efforts with the Kariya Plant, but we were unable to make the reforms that we intended. Toyoda did not start making automobiles with the expectations that it would be a major source of income from the beginning. There is no value in conducting a car business with the factory organizations that cannot make progress in reforms. We then moved to the Koromo Plant with completely new facilities and a new organization. If we extended the Kariya Plant, we could have used somewhere around 700,000 to 1,000,000 m2, but the major reforms that we were seeking would not have been achieved, so we decided to try building a completely new plant at Koromo despite the inconvenience. When Koromo Plant was completed, we established an organization that could quickly make improvements with a minimum of sacrifice.

Source: TOYOTA MOTOR CORPORATION

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