Oral-History:Den Fujita

About Den Fujita

Den Fujita developed a successful export business during the postwar period and became the president of McDonald’s (Japan) in 1971. In this interview, Fujita discusses his early interest in electronics and his work with General Electric and other American companies as an exporter. Fujita moves on to discuss the development of his own company in which he exported Japanese radios to the United States, among other products. He also reflects on past perceptions of Japanese quality and early American knowledge of electronics.

About the Interview

DEN FUJITA: An Interview Conducted by William Aspray, Center for the History of Electrical Engineering, May 20, 1994

Interview #204 for the Center for the History of Electrical Engineering, IEEE History Center, The Institute of Electrical and Electronics Engineers, Inc.

Copyright Statement

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Request for permission to quote for publication should be addressed to the IEEE History Center Oral History Program, IEEE History Center, 445 Hoes Lane, Piscataway, NJ 08854 USA or ieee-history@ieee.org. It should include identification of the specific passages to be quoted, anticipated use of the passages, and identification of the user.

It is recommended that this oral history be cited as follows:

Den Fujita, an oral history conducted in 1994 by William Aspray, IEEE History Center, Piscataway, NJ, USA

Interview

INTERVIEWEE: Den Fujita

INTERVIEWER: William Aspray

DATE: 20th May 1994

PLACE: Tokyo

[Dr. Yuzo Takahashi of Tokyo University of Agriculture and Technology was also present at the interview]

Canned Voice, Japan's First Transistor Tape Recorder

Fujita:

[Pointing to his shelf] Mr. Toshio Niimi was making a transistor tape recorder. He said, "First tape recorder made in Japan, the prototype." Almost forty years ago he gave it to me, but I forgot. I put it over there, and the other day Professor Takahashi came here, so I remembered. I don't know if it's working or not. If you put in the battery here, this goes like this, and then runs the tape. But today we call this kind of machine a walkie-talkie, well advanced, nothing like this, you know. This is a really early prototype. But still, this type made people very surprised. This is the "canned voice."

Aspray:

Canned voice?

Fujita:

There was no name for the tape recorder, so we called it just "canned voice." Mr. Niimi gave me it for the memory, so I just keep it. Early prototype. I was handling a tape recorder, and transistor because in 1950 I was a Tokyo University law student. I started my own company. I contacted Telefunken, in Germany, just after the war. Telefunken preferred to sell vacuum tubes, and radios to Japan, so I bought this size of radio operated with tubes. Also I imported a picture tube from Telefunken, fourteen inches, and I sold it to what is today the Sharp company, a fourteen-inch picture tube from Telefunken. At that time the company was not called Sharp, but the Hayakawa Radio Company. They made the first TV in Japan, using the Telefunken picture tube. Then after that, in 1955 I think, lots of small manufacturers started. The Sony people made the transistor radio of this size and all over Japan Toshiba and other manufacturers started to make transistors.

Takahashi:

Sanyo.

Fujita:

Sanyo. Many people. The price at first was so high, but within two or three years the price went down. Six transistors, one band. Lots of manufacturers in family-type businesses. A small house. They hired the part-timers to assemble the radios. They were buying transistors from Toshiba, Sanyo, and others. That was 1955. Then in 1960, lots of people exported the transistor radio. I exported the transistor radio under the name of DEN-O because my name is Den, you know. "Oh" means "king." So Den King. Well, one day I went to New York. I was very surprised because in my hotel, I saw my radio was in the wastebasket. So I asked the boy, "What happened? Who threw out this radio?" He said, "This is a junk radio, you know. We are importing from Japan, and if you put in the battery, maybe two or three hours later, it will stop. It doesn't work, so it's thrown out. "Then I think MITI, the government, decided to make some export inspections. Otherwise, all the junk stuff would go to the United States. Inspections were very poor because before we had inspections we invited inspectors to the factory and gave them food and drink. We talked to them. The next day we are going to testing. The inspectors said, "Okay." The next day the inspector doesn't want to do any testing, just to put the stamp here, "Passed, passed, passed."

Japanese Radio Exports

Fujita:

But for me that was a golden age because our export amount was very big. One radio cost five or six dollars apiece, so most of our American buyers placed ten thousand, twenty thousand, a hundred thousand dollar orders. At that time I was buying agent for General Electric. I was exporting earphones to GE. I forget the exact date, maybe between 1955 and 1960. GE people came to Japan. They said, "Mr. Fujita, we would like to buy the material for radios from Japan. By the way, how about earphones?" At that time nobody made only earphones. Only one guy, Inada made them, and Inada-san was making one thousand pieces a month. But the GE people said they needed one million pieces a month. So immediately both our factories became big companies. But today, you know, there are Mitsumi Denki, and Kataoka Alps, many manufacturers. Everybody rapidly became big companies because GE bought a huge quantity. They wanted orders of a hundred thousand, two hundred thousand, half a million, one million pieces. So Japanese manufacturers immediately became bigger.

I think in 1965, most exports were stopped because Sony and Toshiba made much better transistors and they started to export by themselves. Especially Sony. All the junk manufacturers had to fade away. There were maybe a hundred transistor radio exporters in Japan between 1955 and 1965. There were a hundred exporters in the Ginza area, but today, the only exporter still in Ginza is my company. The hundred other companies were bankrupted. I was exporting transistor radios on the one side, but on the other I was importing. I was representative of Christian Dior, handbags and shoes. There were French and Italian haute couture manufacturers. I was their representative. I was losing money on exports, but making money on imports. So I could stay there. Of course there were many small manufacturers, one hundred people only, part-time only.

Aspray:

Did very many people manufacture as well as export, or were they just traders?

Fujita:

They didn't speak any English, so they must use exporters like us. Manufacturers can start very easily because they go to Toshiba and place an order: "I am going to make radios. Sell me transistors." Other components they can buy from the manufacturer and pay later. If the merchandise is safely delivered to the warehouse in Yokohama, we paid them money.

Aspray:

It seems like a long distance from handbags to electronics. How did you get into the electronics business?

Fujita:

As I told you, I was buying from Telefunken, picture tubes at first. I was also buying radios from Telefunken, Germany, so I had an interest. At that time all over Japan, nobody had a good radio. Before 1955 there was no transistor radio you know. The transistor radio came to the market in 1955, I think. Before that only tube-radio existed. I look at Japanese history from a hundred years ago. Then in Japan nobody became rich in the export business because the European civilization was more advanced than the Japanese civilization. If I import something, I pay three times the regular amount. If I buy from Europe I pay three times the retail price. I think in 1960 everything had become free, but before that import licenses were not free, so we had to do barter deals. I exported a lot of things to Volkswagen in Germany; then I could get an import license from MITI. Whenever I imported a Christian Dior handbag, I could sell it within one hour for maybe three or four times the higher price. People bought them.

Aspray:

I see.

Fujita:

When I was thirty-five or thirty-six years old, I already carried a huge amount of selling cash. [Laughter].

Aspray:

Until the big Japanese manufacturers started exporting for themselves, could the small trading firms make money?

Fujita:

Yes.

Aspray:

In their export business?

Fujita:

Yes, but most everybody lost money.

Aspray:

Why was that?

Fujita:

Because we made contracts, for six transistor radios at eight dollars. But two months later, when we completed the merchandise, the transistor price had gone down, so most of the buyers said, "Mr. Fujita, I gave you eight-dollar contract. Now you must give me seven dollars fifty cents instead because the cost of stock went down." Transistor stock, day by day, went down like this. It was like chips today, you know.

Takahashi:

Integrated circuits, ICs.

Fujita:

IC prices are now going down, a very similar situation. A hundred exporters were located in the Ginza area, but now nobody exists except me. Everybody was bankrupted.

Aspray:

Did American firms that you exported to make money in their resale of these products?

Fujita:

Yes. At that time we called jobbers. Many jobbers were located in the New York and Chicago areas, mostly Jewish people. I never saw non-Jewish people. They came to Japan, and we called the buyer. Most buyers are Jewish; very sharp, they made money. No risk, you know. They placed orders with us. For example, I sent two engineers to Montreal, Canada, to repair my exported radios. This Hungarian Jewish guy always asked me to send the engineers. Two engineers stayed over there. It's very funny. I sent about twenty young boys, engineers, in the last ten years. Nobody came back to Japan. Everybody married these French girls over there in Montreal. So after that, in 1965 or something, I went to Montreal. I met this young boy. He said, "Mr. Fujita, you pay me two hundred dollars a month, but after two years, if I work for another company, they will give me one thousand dollars because I am an engineer." In Montreal there are lots of good-looking French girls, so they marry the French girls. If they came back to Japan, they would be very poor engineers. They cannot have any life like they can in Montreal. So everybody was very happy over there. I was very surprised.

Aspray:

Did the companies such as General Electric, RCA, and all the others who sold radios in the United States get their radios from the same jobbers?

Fujita:

They bought components from Japan.

Aspray:

They would buy only components?

Fujita:

Assembled over there [i.e. in the USA]. And they said, "Mr. Fujita, you are exporting components only, but why don't you buy from General Electric?" So I said, "Okay, I can." At that time I could buy big, how do you call —

Takahashi:

Console? Hi-fi system? Hi-fi stereo?

Comparison between Japanese and American Exports

Fujita:

Hi-fi stereo. Like a coffee table, the big ones I imported. But always the door was not fixed, or something was funny. Then I went to Ohio, to the General Electric factory, and I met the general manager over there. "This stereo, you know, it looks good, but there is a door you put in there which is not fixed." He said, "Mr. Fujita, are you buying the door? Or are you buying the stereo? We are sending the stereo to you, not the door." But the Japanese do care, you know. Of course the machine must be good, but the Japanese also care for how the outside looks because they put this in the living room, to demonstrate to their friends, "This is made in the United States. General Electric." The door was like this. It's very ugly. Then I imported one hundred big machines, but most of them I couldn't sell because of the ugly face. So I threw them out in the Tokyo bay. I told my friends, "I'll give you this free." But still they didn't want them because they were a bit ugly. Most of Japanese products even today look very good. Sony now is doing very well, for one reason. The shape of the Sony tape recorder, radio, everything, is very good-looking. This is one important factor for selling. We call it merchandizing.

Aspray:

Yes.

Fujita:

But unfortunately, the American people don't care. Today the American government says, "Buy more American cars." But most American cars drive at the left hand. Japanese use the right hand, but the American people don't care. They tried to sell us left-hand. Of course, there are left-hand car such as Mercedes Benz, Porsche and German cars that are left-hand, and that they sell in Japan, but the Japanese like right hand. So if the American people made a right-hand small automobile, they can sell them in Japan. Also, instruction books: when we export transistor radios to the United States, we make English instruction books. They are in very poor English, but still we make English instruction books. Today if I buy something from America, everything is written in English. So people cannot read it.

Aspray:

When the jobbers would buy these radios, were they looking for certain things? Would they tell you that they wanted this kind of feature, or that kind of feature?

Fujita:

Always. Sometimes they said, "We are importing a six-stone one band radio, but American sales say eight stones putting dummy stones. Actually they are six stone, but we packed another useless two stones inside. American buyers say, "Eight. One band, eight transistors." This is fake, cheating, but your government and my government didn't say anything, so I said, "Okay." Actually, there was not a big difference. Junk is junk!

Aspray:

What about the colors of the machines, or the casings?

Fujita:

Mostly black. American buyers said, "Make red and black." I think that, in 1960, there was an invention, a hot stamp to stamp silver color. After this technology came out, American buyers always said to put the hot stamp here. They wanted good hot stamp design.

Aspray:

What about the shape of the machines? Was it always the box like this?

Fujita:

Always like this.

Aspray:

Just like this little tape recorder?

Fujita:

Yes. I was talking at that time to a German company called Quelle. Quelle is a mail order company, and the manufacturer of the Japan Radio Co., Nihonmsen, one of the larger manufacturers in Japan. Quelle makes a thick catalog. While they put on this thick mail, they cannot change the design. Quelle always is buying old style. American buyers said almost every month, "Change the design, change the box." But Quaylay always asked me for the same design.

Japanese Radio Exports (Contd.)

Aspray:

Did you over time try to improve the quality of your products you were exporting?

Fujita:

No, at that time this depended on the transistor stones made by Toshiba and so on. Normally, we exported for six or eight transistors and stones only. In about 1965 Amoco, the American Oil Company, asked me for a big radio. I have a sample in my office, over there. That was maybe twenty stones. Amoco gave me a sample, but we could not make it. The technology was poor. In the meantime, Hong Kong people started to make small radios. They bought transistors from Toshiba, from Japan, and they make the radios over there, in a company named Sylvania. They produced huge quantities, so I bought from Hong Kong and shipped to U.S. oil companies such as Sonoco or Amoco. One year I was maybe selling ten million pieces from Hong Kong. I was very surprised how they sold. They just gave them away. If you bought the gasoline, they gave you the Hong Kong radio.

Aspray:

Were there other small electronic products that were starting to be exported as well?

Fujita:

No, only radios at that time.

Aspray:

None of these tape recorders?

Fujita:

Yes, or this kind of tape recorder. This is junk, you know.

Takahashi:

How about transceivers?

Fujita:

I also sold transceivers. There was a company called Yuko Denshi, but this guy was almost a crook. He claimed eight stone transceivers that were actually six stone! He is a jobber. He said, "Put on a stamp, eight stone." Today, if I do so, maybe I would have to go to jail. At that time people didn't know.

Aspray:

What can you tell me about the difference in the business practices here and in the United States?

Fujita:

Audio File

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As I told you, I was exporting, but on the other hand I was importing lots of products. One day I was the largest diamond importer from the Chicago and New York areas. Harry Winston is the largest diamond dealer in New York. I used to buy huge quantities of diamonds. One day I went to Chicago, and there was a diamond dealer named "Masterpiece,” a Jewish guy. I went there and he said, "Please wait one hour." So I was waiting one hour, then he came out. He said, "Sorry." He had a customer. He said, "Mr. Fujita, today's customer bought a very small diamond. I spent more than one hour to sell this stone. Maybe you are laughing at my selling a small stone and letting the Japanese wait one hour. But, this is a business, you know. If you sell a small stone today, maybe this couple next year will come back again and buy another large one. So if you try to hit a home run, like in baseball, you fail, see. These days you must go step by step. This is the business." At that time I was very young, so I was dreaming big business. He said, "Don't try to make a big business." He said, "Dream, okay, but for actual business you must go step by step."

So I learned a lot from Jewish businessmen in America. I was born in Osaka, and Osaka is very well known for business practice, but Jewish practices are certainly different from the Japanese style of business. I learned a lot from the United States Jewish people, how to make more money, you know. For example, in Japan we make a contract, and on every contract we put a big stamp. The Emperor's stamp a big stamp. But if you don't try to keep the contract it means nothing. In Japan people always say, "A contract is a contract, but my son got married, my son is sick, my wife is sick, something else happened. I cannot keep the contract. Please forgive me, or cancel the contract." This happens always. But once you make a contract with these American people, you cannot say sorry, very strict. Many times I paid a big penalty because I promised that I was going to ship ten thousand pieces of radio on some date, but the manufacture was delayed. I sent a cable to the United States, "One month delay." So they said, "Okay, pay us the penalty." This kind of thing we learned from the United States. Today everybody knows it, but many years ago the Japanese were different. They broke contracts easily.

Aspray:

Were the Americans you dealt with fair to you?

Fujita:

Mostly fair. Sometimes we called them Banzai dealers. They come to Japan looking for some bankrupted merchandise. They come to ask for bargains, low prices. I don't deal with this group, but there are several people always buying bankrupted merchandise in Japan.

Aspray:

I see. Did you need to have any technical knowledge to run this business, knowledge about electrical engineering?

Fujita:

No. I didn't know it. Of course I had engineers, but not so good engineers.

Aspray:

What would the engineer be doing? What would that responsibility be?

Fujita:

Mostly we ask the manufacturer, who have engineers.

Aspray:

So your engineer would just have to evaluate the products you were thinking about purchasing?

Fujita:

Right. Also American buyers are also not good engineers. They just think that if they press a button and the sound comes out, everything is okay.

Aspray:

I see.

Fujita:

Very primitive.

Aspray:

Was there any move over time other than putting this extra number of transistors in it — say to have features on machines that you could sell them for a higher price?

Fujita:

No, mostly it depends on the buyer, the American jobber. I think every idea came from the buyer. After 1965, all the buyers went to Hong Kong and Korea. Most of these Japanese cheap manufacturers faded away.

Aspray:

Are there other things that you would like to tell me about this?

Fujita:

As I told you, Sony and Toshiba sold to the United States, so they became big companies. If American companies did not buy anything, then the Japanese economy would still be poor. Mr. Moribe died three years ago. He was the president of Mitsumi. I knew him from the beginning, really. He started with a very small company, only four or five people. His son and my son were in the same primary school. So I met him always. By the way, he changed wives four times. When he made money he divorced his wife. The more money, the more divorces! It's a very common practice all over the world!

Interactions with Jewish Americans

Aspray:

How did you move from being a law student to being a businessman?

Takahashi:

Maybe you'll explain your background because your career reflects the time before or during the war, or just after the war.

Fujita:

I lost my father when I was young, so I had to work. Also we lost the war, so everyone had to work. When I went to Tokyo University law school, I had to work. I went to General Mac Arthur's office and worked as an interpreter for almost three years. Then I saw many Americans, but I thought Americans were one race. But actually there are black people, and Jewish people, a lot of people. Jewish people are very smart. I talked to a sergeant, a Jewish guy. Very sharp, you know, very smart. I asked this man, "Why are you so sharp?" He said, "Because I am Jewish." He was lending money, and on payday he collects money back. He made big money, and he had a Japanese girlfriend, and small house. I often went there, looking. Other American soldiers lived very differently. This sergeant was living higher than an officer's life because he was very smart. After that I tried to contact the Jewish people, to study. They said that a contract is a contract, so whilst you make a contract, don't break it. If you break it, then nobody trusts you anymore. I was lucky because when I was a university student I met these American people, and I learned a lot from them. Most people didn't know American businessmen, but I knew some already so I started earlier. This was good for me.

Miscellaneous Business Activities

Aspray:

Did your law background help you?

Fujita:

A little bit, because — you know McDonalds? McDonalds is now in seventy countries, and its president is a former lawyer like me, who is doing very well. Maybe business and the law have the same structure. But unfortunately, in this small transistor radio manufacture, everybody was bankrupted. I think you said you met Inada —

Takahashi:

And also a person Mr. Tanabe who lives in Hachioji —

Fujita:

Ah, Yashima Denki. I was exporting his radio to Russia. In Switzerland, there was another guy, this guy's Jewish. He opened trade from Switzerland to me and said that we should get ties to Hamburg, Germany. From Hamburg we told the Japanese government, "This merchandise goes to Germany." This is okay, but we cannot ship to Russia. The merchandise arrived in Hamburg. He re-shipped it to Russia, and he buys shoes from Russia, which he is selling all over Europe. So he is making money selling radios and buying shoes. After that, he went to the United States, and he died. Now his son is doing the business. At that time the Japanese six-transistor, one-band radio sold all over the world: Russia, America, South America also. The transistor itself is a big invention. It completely changed human life. But I wonder who made money. Everybody lost money. I think only American buyers made money out of it. On the Japanese side, everybody lost money. Because we were stupid!

Aspray:

As either an importer or an exporter, did you have any dealings with electronic goods after 1965?

Fujita:

No. I don't like machines because machines need after-service. I told you about when I imported big stereos from GE. One day a buyer came from Sendai from Tokyo. He bought a big machine. We shipped to his home. He called me, "Mr Fujita, my machine doesn't work. Send an engineer." I sent an engineer to him. The machine didn't work because he didn't connect the electricity! What utter nonsense. Another customer far away said: "The turntable doesn't work. It cannot make any good music." This was very difficult. I decided it was better not do any machine business because you need after-service. The handbags need no after-sales service. You just sell them. Hamburgers. Very quick and no after-service

Comparison between Japanese and American Business Practices

Aspray:

There's so much talk these days about the differences between American and Japanese business practices. Do you want to make any comments about this?

Fujita:

Here is a good example. We import Lincoln and Cadillac automobiles, and the Toyota and Nissan are improved. Small automobiles, but so many areas improved. I think the Japanese inventions themselves are a bit inferior compared to the United States, but the Japanese improvement is better. Even in my hamburger business, we develop many new hamburgers in Japan. The teriyaki hamburger didn't exist before, but we sell teriyaki hamburgers very well. I think the Japanese have the knowledge to improve something. Education is important; if you teach someone nicely, he can improve. It takes ten months to make rice. After you put the rice in the field, you need water. So for ten months you have to look after the water. If the water goes out, this rice becomes faded. So you must take care. We have done this for two thousand years. In 1945, when the Second World War ended, at that time sixty percent of the total population was farmers. Today they are only ten percent. For ten months they must work every rainy day or hot day. Basically the Japanese are very hard workers.

Takahashi:

How, Mr. Fujita, how did you come to work with the occupation force? How and why? Maybe because of money to live, but —

Education and Employment with the American Occupation

Fujita:

There was advertising in the newspaper. Just after the war nobody understood English, so every day they advertised. "If you can speak English, come to General Mac Arthur's office." I went there; there was an American Nisei. He asked, "What time is it now?" I said, "Oh, ten o'clock." So he said, "Okay." A very simple examination! I went in the camp, but I didn't understand what they were saying. Nothing. Then I asked them, "Can I stay here? Can you give me a small bed? I will stay here for twenty-four hours. In the daytime I will go to school, but at other times I will stay here. I live with you." They said, "Okay. No extra money." I said, "Okay." Then I took one space, you know, one bed. I stayed with the soldiers, listening, and six months later I understood what they were saying. But still their English was very bad. Soldier's English is very bad.

Aspray:

How had you learned English in the first place?

Fujita:

My father was also an importer, so he often went to Europe and the United States. When the war started he said, "One hundred percent, we will lose the war. No chance. After the war we will need English. We have to study English now." At that time I was a high-school boy. I studied. I had a very strong father. My father gave me lots of dictionaries, but everything was burned by air raids. He said that the United States had a much greater production capacity. I was working as a so-called part timer. I worked in General Mac Arthur's office, and I talked with Jewish people. I thought if I graduate, from the Tokyo University Law School, I could go to the Ministry of Finance, the Ministry of International Trade, a big company, or so on. But I thought maybe I would do better by myself. These Jewish people were much, much smarter than the Japanese government officers, I took the examination, for higher government officers and I passed it. I got a letter that said, "Come to work at the Ministry of Finance." The Japanese examination has a ranking. They said, "You passed at number seven." I think maybe five or six thousand people applied, and maybe four or five hundred people passed. Then they said, "You go to MOF, you go to MITI, blah, blah, blah." Of course, I didn't go. Many of my friends had failed the examination. They said, "You'd better go to work at MOF." But I said, "No." Many friends went to MITI or MOF after that, but I started my own business when I was twenty-five years old. I never worked for other companies. Other people are very happy when they see their bonuses, but I'm happy when I pay the bonus!

Would I work with the government? Maybe, or some big bank, or so on, if I did not know about American life. But when I worked in General Mac Arthur's office, I was so shocked because it was air-conditioned. We did not have air conditioning. When summer comes, we have a kaya something that protects us from the mosquito. But U.S. people had the screen window and air conditioning. I was very surprised at air conditioning, cooling the entire room. No flies. I think there's a quality of life that's so different. If I had always worked for a Japanese company, maybe this would not be true. I preferred the U.S. lifestyle. Most of the Japanese did not find out. Even today the Japanese home is very small. Maybe ten years ago, I had a Chicago office, and I hired an American manager. My son went to Chicago. He said, "Father, it is very funny because this Chicago branch manager has a big home on one acre of land. He has a big home, but my home is very small." I said, "This is a different life." Today we have lots of U.S. dollars, and the company is very rich, but actually we don't feel rich because our house is small. We have to make big homes. There are many regulations. We must change regulations because in the city of Tokyo you can build to a ten-meter height. In farming land you can do bigger buildings, there are lots of regulations. We have to change.

Aspray:

Thank you very much.

Fujita:

Okay.