Hall of Fame Inaugural Class

Yoshihiro Inayama

Yoshihiro Inayama helped rebuild Japan following the devastation of World War II. Under his stewardship, Nippon Steel Corp. underwent an economic miracle in the quarter-century following the war, and by 1975 had emerged as the world’s largest steelmaker.

Born and raised in Tokyo, Inayama—who graduated from Tokyo Imperial University—joined Yawata Iron & Steel Co. Ltd. on Kyushu Island in 1928. Known as the Imperial Works, Yawata Steel supplied 85 percent of the country’s steel in the early 20th Century, but was hampered by the island nation’s lack of natural resources, including iron ore and coal. Although Japan’s annexation of Korea in 1910 was done primarily to secure a supply of both resources for the Imperial Works, by World War I, Japan’s rapidly industrializing economy was demanding more steel than Yawata Steel could supply.

Yawata Steel struggled with that shortfall of raw materials throughout the 1920s, and while the Great Depression dampened demand for steel from Japanese industry, the economic upheaval provided the impetus needed for Japan to finally address the structural problems presented by surging demand for steel. At the time, Japan was heavily influenced by ultra-nationalist army officers, who were devising a plan calling for Japanese conquest of much of Asia.

In 1934, in the midst of the depression, the Japanese government merged Yawata Works with six private Japanese steel companies. The merged Japan Iron & Steel Co. Ltd. was 85-percent owned by the Japanese government and supplied more than half of the steel required by Japanese industry.

In the late 1930s, Japan Iron & Steel relocated some of its steelmaking capacity to Korea and Manchuria, both of which had fallen under Japanese domination. By 1939, Japan Iron & Steel had doubled its prewar capacity, and Japan was self-sufficient in all phases of steel production, with the exception of armor plating.

Japan’s attack on Pearl Harbor, however, exposed the country’s economy to the reality that the Japanese steel industry was not equipped to compete with the United States. In 1943, Japanese steel production hit a peak of 12 million tonnes. At the same time, the United States was committing 19 million tons of steel just to build and launch new merchant ships.From March of 1942 when General Jimmy Doolittle’s B-25 bombers appeared over Tokyo until the atomic bombs exploded over Hiroshima and Nagasaki more than three years later, Japan Iron & Steel’s mills were bombed into oblivion.

When the war was finally over in August 1945, only three of the company’s blast furnaces were still functioning. Inayama had lived through that tumultuous period at Japan Iron & Steel and took from it lessons that would help transform Japanese industry in the 1950s and 1960s.

The Allied Occupation broke Japan Iron & Steel into four privately owned steel companies in 1950. By that time, the United States was waging a war on the Korean Peninsula and it encouraged a healthy Japanese steel industry to offset the threat of Communist aggression from China and North Korea. Inayama became a key executive with Yawata Iron & Steel Co. Ltd, which was made up of most of the mills belonging to the old Imperial Works. Fuji Iron & Steel Co. Ltd. comprised the other major component spun out as a result of the breakup of Japan Iron & Steel. During the 1950s and 1960s, it would be a fierce competitor of Yawata Iron & Steel.

Inayama’s influence on Yawata Iron & Steel can’t be understated. During the 1950s, he positioned Yawata to capitalize on the introduction of basic oxygen furnaces, which were far more efficient than the open hearth furnaces of the prewar era. In 1957, Yawata Iron & Steel began to install the LD, or oxygen converter, which consumed far less scrap than the open hearth system it replaced—a sore point for the Japanese, who had gone to war in 1941 partly because of the U.S. embargo of scrap to the island nation.

Yawata Iron & Steel pioneered continuous casting in the 1960s and was one of the first steel companies in the world to convert to computerized controls. By 1960, Yawata Iron & Steel was reporting sales approaching $350 million annually, the lion’s share of which were derived from Japan’s domestic consumer market.

In the postwar era, Inayama was credited with reopening economic ties to China. He first visited the People’s Republic in 1957 to discuss the possibility of bartering Japanese steel for Chinese coal and iron ore.

Inayama had long believed that the ruinous competition with Fuji was preventing both companies from realizing their true potential. In 1969, he and Fuji chairman Shigeo Nagano agreed to merge the two companies. The two shared executive duties at the merged Nippon Steel for the company’s first several years of operation.

Nippon Steel in the early 1970s was the world’s largest iron and steel company, surpassing U.S. Steel Corp. in 1975. Its 80,000 employees produced 47 million tonnes of crude steel annually, four times the amount the entire nation had produced during its record year in 1942. And virtually all of the steel produced by Nippon Steel went for peaceful purposes.

American steelmakers in the late 1970s, however, charged that Nippon Steel was unfairly exporting Japanese steel to the United States, marking the beginning of a two-decade-long fight over trade policies.

Yoshihiro Inayama served as president of Nippon Steel from 1970 to 1973, and as chairman of the company’s board until his retirement in 1981. From 1980 to 1986, he was chairman of Japan’s most influential business organization, the Federation of Economic Organizations. He died in Tokyo of lung cancer in October 1987.

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