(1) Starting Off from the Yamabe Plant [From October 1938 To September 1965] - Company Developments -
It has been said that businesses continue developing if they can successfully ride the trends of the times.
While Ashikaga flourished before the war as a textile town producing Ashikaga Meisen that was known nationwide, there are now hardly any sawtooth roofs that are emblematic of textile factories.
In 1938 under the military regime, the company commenced operations in Yamabe (Yamabe town, Ashikaga county) as a manufacturing plant for airplane jigs and parts. With the shift to peacetime industry following the war, we started out with the production of goods such as household sundries.
We then found the means to expand our business through scooters and bicycle parts, and we expanded from a molds and jigs manufacturing plant to a production plant focused on pressed parts while the conflict was ongoing in Korea.
Around 1959, auto manufactures successively entered the market with small cars, marking the beginning of motorization.
Trade with Fuji Heavy Industries Ltd. and other automobile manufacturers grew steadily, and due to space limitations we had to move from the Yamabe Plant to the Mikuriya Plant.
[For more details on this period, please see the previously published "The 50 Year History of Fukai."]
(2) Expansion of Mikuriya Plant [From October 1965] - Company Developments -
Founding President Yoshinobu Fukai, anticipating the trends of the automobile industry, moved the head office and plant from Yamabe where we had operated and grown familiar with the environment for a period of 27 years since foundation to Mikuriya (Fukutomishincho, Ashikaga city) in 1965 in order to launch the first plant in the Mikuriya Industrial Park developed in Ashikaga City in response to these upcoming trends.
Dramatic growth was experienced as a result of this move to Mikuriya, as in addition to automotive components, business was commenced with Kubota Iron Works (currently KUBOTA Corporation) for agricultural machinery parts in 1969 during the era of agricultural modernization.
Founding President Yoshinobu Fukai passed away after a ten-month struggle with hypopharyngeal cancer in 1981. Subsequently, Tomi Fukai was appointed as President and Takeshi Fukai was appointed as Representative Director.
Although the company's economic environment was strong due to post-war reconstruction and subsequent high growth, following the rice acreage-reduction program commenced in 1970, the oil shock in 1973, and the automobile export controls for the US in 1981, the future looked uncertain as the company marked its fiftieth year.
[For more details on this period, please see the previously published "The 50 Year History of Fukai."]
(3) Achievement of Long-Awaited Goal of Sales of 10 Billion Yen [From 1988] - Company Developments -
1) Together with Legacy
Fukai held its fiftieth anniversary ceremony in 1988 when Fuji Heavy Industries Ltd. commenced production of the first generation sports wagon called the Legacy. The economy was also very strong during this year, as evidenced by the opening of the Great Seto Bridge and the completion of the Tokyo Dome.
The product release meeting where the birth of the Legacy was announced was held on January 23, 1989, and the Legacy series was subsequently released on February 1.
At Fukai, the Legacy accounts for over 20% of sales as the main model, and it has affected company management in many ways as it has maintained its position as the main model for a period of 18 years since release.
As mentioned in the "The 50 Year History of Fukai," self-regulation on exports to the US were carried out over a three year period from 1981 to 1983, and Fuji Heavy Industries Ltd. adopted local production in the US. SIA (Subaru Isuzu Automotive Inc.) was founded and commenced operations in September 1989, and initially sales were grown by sending Legacy parts from Japan by ship and freight cars over a period of approximately 40 days.
The Legacy went through several model changes, and the fourth generation Legacy that was released in 2003 won Car of the Year, in recognition of it being one of Japan's most renowned cars in both name and reality.
2) Launch of the Ota Plant and Nitta Plant
Excluding the war period, it is no exaggeration to say that Fukai has grown together with automotive components and agricultural machinery components for a period of fifty years since its foundation.
Following the war, we received orders for scooter components from Fuji Kogyo Ltd. (forerunner of Fuji Heavy Industries Ltd.), and we subsequently commenced business with Prince Motor Company Ltd. (subsequently merged with NISSAN MOTOR CO., LTD. in 1966). We then received orders for agricultural machinery parts from Kubota Iron Works Co., Ltd. in 1969 and conducted business activities based on these three pillars.
The company's sales grew steadily as strong performance in agricultural machinery parts compensated for the deterioration in business performance cause by the first and second oil shocks until 1980.
However, in the automotive industry, automotive exports to the US grew dramatically, and as a result export controls on Japanese cars to the US were agreed to in 1981 and an export quota of 1.68 million units was set (export controls on Japanese cars to the US were continued for a period of three years from 1981). Meanwhile, in the agricultural machinery industry, following the implementation of the rice acreage-reduction program in 1970, rice acreage decreased year by year and a recovery in demand for agricultural machinery did not appear likely. In terms of sales, while there were temporary increases in sales due in part to orders received from Kanai Sharin Kogyo Co., Ltd. (currently Ring Techs Co., Ltd.) for disk wheels and orders received from Kubota Iron Works Co., Ltd. for grain tanks in 1985, this did not lead to a steady increase in sales every year.
Against this backdrop, it became necessary to cover for the slump in sales and it was decided to expand into industrial machinery including construction machinery and large-scale air-conditioning equipment.
Because there are differences between development methods, facilities used, the timing for work proficiency development, and management methods for automotive parts and agricultural machinery parts compared to industrial machinery, and also for the purpose of ensuring that profit and loss management would be clarified, the Ota Plant (Ota city, Gunma prefecture) and Nitta Plant (Nitta town, Gunma prefecture) were acquired in addition to the Mikuriya Head Office Plant from 1988 to 1989. Operations were launched and a three plant system was adopted.
3) Achievement of the long-awaited goal of past presidents
Achievement of sales of 10 billion yen had long been the company's goal. This was mentioned in "The 50 Year History of Fukai," in which Founding President Yoshinobu Fukai stated that "the 100 strategy aimed annual sales of 10 billion yen has been deployed" in 1974. As it also states that sales for the 35th fiscal year (April 1972 to September 1973) were approximately 2.5 billion yen, setting such a goal must have taken extraordinary determination.
Based on a growth strategy consisting of three plants including the Ota Plant and Nitta Plant that had been added, business was recommenced with Hitachi Construction Machinery Co., Ltd., Komatsu MEC Corp. (business commenced in 1978 with our affiliate Hand Work Kogyo), the Omiya Plant of Fuji Heavy Industries Ltd., and Sanyo Electric Co., Ltd. for industrial machinery from 1988 to 1991 as the number of clients grew considerably.
On the other hand, sales grew considerably in our mainstay automotive components, thanks to strong sales of the Legacy model released in 1989 and orders received from Subaru Logistics Co., Ltd. for containers (crates) for sending Legacy parts to SIA.
In business with Yamakawa Industrial Co., Ltd. (currently Unipres Corporation), new orders were received for G50 (luxury car) torque converter covers and component orders were received for F31 (transfer from the Oppama Plant to the Tochigi Plant), Y32 (main car model ordered by Nissan), and H41 (a small truck) as full model change from 1989 to 1990.
Thanks to the hard work of all of our employees over the long years in this manner, and supported by the strong economy in 1989 when the Nikkei Stock Average reached 38,915.871 yen in December, we were able to achieve our long-awaited goal for two consecutive years as we recorded sales of 10.2 billion yen in 1990 and 10.6 billion yen in 1991.
The long-awaited goal of sales of 10 billion yen was achieved 16 years following the announcement of the 10 billion strategy and nine years following the death of Founding President Yoshinobu Fukai.
(4) Construction of the Otsuki Plant in an Aim for Order Expansion and Even Further Growth [From 1989] - Company Developments -
1) Rush to increase ordered parts
A three plant system aimed at even further growth was established in 1989 following the passing away of Emperor Hirohito, and the plant launching proceeded according to plans. The Ota Plant was used for agricultural machinery parts, while Nitta Plant was used mainly for industrial machinery parts, and after not long there was nearly no workspace at both plants.
At that time, the agricultural machinery parts for Kubota that had taken up one corner of the west side of the assembly area at our core Mikuriya Head Office Plant were moved to the Ota Plant and the assembly workspace became free. As a matter of course we were actively working to get orders for automotive components, and as a result we received orders from Fuji Heavy Industries Ltd. for the Alcyone and Impreza as new vehicles and from Yamakawa Industrial Co., Ltd. for the Nissan car Infiniti (Q45) that was the talk of the times. At the same time there was a launch rush as many orders were received for large-scale full model changes or transfer of control for models including the Vivio, Cedric, Atlus, and March in this period.
Note that in 1990 the development period until the launch of mass production was about 23 to 24 months for standard passenger vehicles and 20 months for minicars. The product drawings had been provided by clients and apparently clients were in the process of holding CAD/CAM training.
2) Construction and launch of the Otsuki Plant
From 1989 when 3% consumption tax was introduced to 1990 when minicar regulations were revised (displacement of 660cc or less), a line was established for the succession of new orders and full model changes in the open workspace at the Mikuriya Head Office Plant accompanying the transfer of agricultural machinery parts to the Ota Plant. As the assembly workspace became smaller and smaller, the completed parts storage space at the north side of the assembly area was gradually converted into an assembly workspace.
Assembly workspace was still insufficient, so a lean-to roof was added for crate production and a prefabrication warehouse was installed to the south of the Mikuriya Head Office Plant in order to support shipments to SIA.
At this time, the Uekino Warehouse was also being rented by the Asakura Warehouse (Fukuicho) and Ota Plant. Of course, the increase in assembly workspace also meant an increase in the number of employees and the need for parking spaces for these employees. In response, the parking lot was expanded south of the Mikuriya Head Office Plant and service molds were discarded for the second time for the south parking lot in July 1991, although this was done after the decision to acquire land in Otsuki. There was also a shortage in rest areas, so the second floor of the cafeteria that had also been used for storing equipment had to be opened during lunch break.
Against this backdrop, after giving consideration to converting the Mikuriya Head Office Plant into two floors and the introduction of other industrial parks during the location selection process, due to the lack of the site area desired, the final decision was made in April 1991 to acquire a former mine site in Otsuki town, Ashikaga city being brokered by Ashikaga city.
Plant Manager Kimishima was the person responsible for the construction to the launch of the Otsuki Plant. Senior Managing Director and Plant Manager Kimishima originally worked for Honda Motor Co., Ltd. and was invited from Ogiwara Ironworks Co., Ltd. for appointment at the same time as the acquisition of land for the Otsuki Plant in 1991. Plant Manager Kimishima nearly news-worthy guidance consisted of management meetings from 7:00 every morning and immediate thorough improvements through 5S management.
Plant Manager Kimishima's concepts for the construction of the Otsuki Plant included unmanned operations, using of robots for the tandem press, and direct conveyors for the assembly line. The plant was completed during the summer vacation of 1993 based on these concepts, and the inauguration ceremony was later held in October of that year.
3) Struggles with hiring difficulties
Although we had secured sufficient work during the first half of the 1990s, it was difficult to secure workers during this economic boom period. According to a statement by the General Affairs Manager at a morning management meeting in March 1992 that was a regular meeting at that time, the jobs-to-applicants ratio was 1.9 times in Tochigi prefecture, 2.03 times in Ashikaga, and 6.79 times among technical occupations.
At that time the buzzword the "3Ks" (kitsui, kitanai, kiken, or hard, dirty, dangerous) was popular among young people, reflecting an inclination to stay away from manufacturing jobs that were deemed as unfavorable.
This meant that of course midcareer hiring and the hiring of new graduates was difficult and the company had to rely on outsourcing. We naturally came to rely on people of Japanese ancestry from Latin America from companies such as Kyowa Parts (formerly Jaburasu) and Yamato, and signs written in both Japanese and Portuguese were displayed at the workplace.
Under these circumstances, efforts were made to secure regular employees through periodic recruitment. Efforts included the issuing of an in-house publication named Quest, the launch of the Appealing Company Establishment Committee, and a shift from the long-familiar gray uniforms to new green-based uniforms in 1991.
(5) Sales Reductions Due to the Collapse of the Bubble Economy and the RE Plan [From 1991 To 1999] - Company Developments -
1) Acceptance of secondees from clients
The number of staff members was low due to preparation for the construction of the Otsuki Plant and business expansion, so five secondees from Fuji Heavy Industries Ltd. were accepted for the period of three years from 1991 to 1993. Subsequently, there have been replacement secondees up until the present day, as these secondees have fulfilled a central role at Fukai.
2) Sales reductions
The collapse of the bubble of high economic growth became a reality for Fukai with the fall of the scrap price (6 to 7 yen/kg) from November 1991.
During September of that year, work was being conducted during lunch breaks due to increased production for the Legacy by Fuji Heavy Industries Ltd. and the Cedric and Gloria by NISSAN MOTOR CO., LTD. Although the Economic Planning Agency announced also in that September that the economic expansion lasting for a period of 58 months since December 1986 had exceeded the Izanagi boom (a period of rapid economic development from 1965 to 1970), Fukai began to suffer from the economic slowdown two months later.
The collapse of the bubble economy led to a decrease in production of the Legacy and Leone by Fuji Heavy Industries Ltd in February 1992. Annual sales were also sluggish for NISSAN MOTOR CO., LTD. during this year, as holidays were increased in October and November and work ９days were transferred to February and March.
Amidst this increasingly difficult environment, return use was adopted from February 1992 for crates that had been delivered to Subaru Logistics Co., Ltd. due to environmental problems, causing a drastic decrease in a business that had accounted for at least 7% of total sales. The full model change of the second generation Legacy was conducted in 1993, and as calls were made for export control on automotive components to improve trade frictions between Japan and the United States, local procurement was adopted for SIA production parts and it became no longer necessary for the company to send parts to the United States.
Due to a change in production responsibilities at NISSAN MOTOR CO., LTD., production of the Pulsar at the Tochigi Plant was transferred to the Kyushu Plant in March 1995, and the company's line was transferred to Katsuyama Press Kogyo (currently Unipres Kyushu Corporation).
Although under this background the entire company worked together to expand sales as can be seen in the appendix "New Business Partners List," Fukai could not compensate for the decline in automotive component sales, and sales decreased as seen in the appendix "Sales Trends".
This was one of the most difficult period of Fukai's history of a little over fifty years.
3) The RE Plan and creation of profitable structure capable of sales of 7 billion yen
Operations commenced at Otsuki Plant in August 1993. The plant started off with approximately 250,000 square meters of land and a plant building with a size of 18,560 square meters (116m x 160m). Because the plant is located on the side of a mountain, when operations were initially launched there were many rhinoceros beetles when going to the company in the morning as well as mushrooms that could be harvested in the fall as it was a plant with a rich natural environment.
However, the construction funds for the Otsuki Plant were bank loans. The interest on the large amounts of construction funds was a considerable burden for the company.
As noted earlier, in terms of earnings, there had been a reduction in the number of units sold by automobile manufacturers due to the collapse of the bubble economy and a decease in sales due to the adoption of local procurement by Fuji Heavy Industries Ltd. and SIA, combining to put the company in an extremely difficult position in terms of both earnings and sales.
In order to overcome this situation, the first streamlining plan call the RE (Re-engineering) Plan was launched as a management plan. As described in the appendix "Overview of the RE Plan," the RE Plan was composed of parts I through V for implementation as a medium-to long -term management plan over a period of 5.5 years. The basic aims and goals of the plan were to create a profitable company capable of sales of 7 billion yen and implement activities to prevent losses through large sacrifices such as wage cuts and employment adjustments.
The successes of the RE Plan were later leveraged in the medium-term management plan and were no doubt thanks in part to the efforts of all employees.
4) Integration with Otsuki Plant and head office relocation
One of the measures of the RE Plan was the consolidation of plants, which in turn had three major objectives. The first was to empty out plants and sell them to reduce debt and the second was to reduce wasteful expenses required for transporting parts between plants. The third was to reduce the wastefulness that occurred due to managers at the top of the organization working at multiple plants, causing a significant waste of time for movement between plants.
As the first step aimed at improving this situation, Fukai consolidated the Ota Plant and Nitta Plant into the Mikuriya Head Office Plant, which had open space due to the transfer to the Otsuki Plant, from 1994 to the following year. The workplace layout consisted of Kubota parts such as tractor rotary covers that had been moved from the Ota Plant to the east assembly area of the Mikuriya Head Office Plant and parts for Ogihara Corporation (US) such as OAC that had been transferred from the Nitta Plant to the west assembly area.
At this time the Mikuriya Head Office Plant press workplace still had TRF160t, 600t, and tandem A, B, and C lines in operation, as well as B6 blanking and PRG300t equipment, and machined parts were mainly sent to the Otsuki Plant.
In terms of social trends, after the 1955 System collapsed in 1994, the Hata Cabinet (Shinseito) and Murayama Cabinet (Social Democratic Party of Japan) got their start.
While a buyer was being sought for the Mikuriya Head Office Plant in order to reduce debt, Achilles Corporation that was located just across the road commenced talks on the purchase of the Mikuriya Head Office Plant a few months following the integration of the Nitta Plant with the Mikuriya Head Office Plant. The talks went smoothly, and in June 1996 it was decided to vacate the plant by March of the following year. While the initial transfer of control of Otsuki during summer vacation of 1993 had been a transfer of the assembly workplace, this transfer of control would constitute the closure of Mikuriya Head Office Plant, consisting of the relocation of the previously mentioned Ota Plant and Nitta Plant and the transfer of large-scale machinery such as the transfer press for the press worksite and all machinery for machining worksites. A very tightly-scheduled transfer project was commenced and the work was finished without any major issues while holding regular meetings with Achilles Corporation.
The headquarters was relocated from the Mikuriya Plant to the Otsuki Plant on January 1, 1997.
All of the company's employees began to work together again at the same workplace for the first time in twenty years or since 1977 when Hand Work Kogyo was spun off as a specialized factory for non-mass produced parts.
(6) From Defensive Management to Offensive Management (From 1999 To 2004) - Company Developments -
1) The A21 Plan and profitability improvements
The Japanese economy experienced a slowdown from the collapse of the bubble economy at the beginning of the 1990s, and even after ten years had passed in 2000 the economy had yet to recover, as land prices fell and the overall unemployment rate hovered between 5.5% to 5.9%.
In terms of interest rates, an unprecedented zero interest rate policy was launched, and bank problems materialized as a result. Our main bank Ashikaga Bank underwent bankruptcy in November 2003 and was nationalized.
In this operating environment, our business performance began to gradually improve in the second half of the first streamlining plan (the RE Plan) as the second streamlining plan (the A21 Plan) took over. While sales continued to decrease from the 54th fiscal year (year ended September 1996), sales stopped at 7.1 billion yen in the 58th fiscal year (year ended September 1996) in the middle of the RE Plan and began to gradually improve as the various efforts of the A21 Plan (see the appendix "Overview of the A21 Plan") led to strong results in the 66th fiscal year (year ended March 2003), the final year of the A21 Plan, when profitability was improved sufficiently and sales of 13.6 billion yen were achieved.
The positive results of the A21 Plan appeared in various areas.
One area in which these results were seen was the receipt of Comfortable Workplace Certification from the Prefectural Labor Bureau, the receipt of a Contribution Award and Quality Excellence Award from Fuji Heavy Industries Ltd., and the receipt of a Special Award from Unipres Corporation.
In addition, President Fukai was asked by Fuji Heavy Industries Ltd. to serve as chairman of the Materials Press Components Boards, a duty which he devoted himself to fully. The company was visited in November 2002 by Chairman Tanaka of Fuji Heavy Industries Ltd. and in May 2003 by Chairman Terada and President Toriumi of Unipres Corporation, during which we received strong words of encouragement.
2) Being a technology-based company
"Being a technology-based company" was expressed as the management activities slogan by the President in April 1998, marking the final year of the RE Plan.
It has been said that our manufacturing is based on our origins. Although origins contain a variety of things in a broad sense, they can be narrowly defined as product design, process design, and production equipment. The base of our origins is composed of various technical capabilities, and everything depends on whether aspects such as our quality, cost, and productivity are good or bad.
Meanwhile, sheet metal parts companies in our automotive components industry get orders by receiving diagrams from manufacturers and using technology to make components according to these diagrams. Marketing activities depended on how many more diagrams you could get compared to competitors.
Amidst these industry trends, automobile manufacturers began to submit product design requests to components manufacturers likes us due to a lack of man-hours as result of an increase in cars developed and cost reductions. With this development, parts manufacturer engineers called guest engineers would be seconded to automobile manufacturers and conduct product design. The first guest engineer was sent to Fuji Heavy Industries Ltd. in 1994 for new vehicle model support. Subsequently, from 1996 guest engineers became essential for getting orders for components, and a period began in which marketing activities were conducted by stationing engineers at automobile manufacturers and components manufacturers such as Fuji Heavy Industries Ltd. and Unipres Corporation.
In addition, we began to actively conduct presentations on new technologies, new methodologies, and new products as a proposing company.
Against this backdrop, we continually hired around eight science and engineering graduates every year starting from 1992 when performance was suffering. We steadily developed these human resources, and as a result we archived strong results in the CAD Inspection Department of the Skills Olympics of Fuji Heavy Industries Ltd. from 2001.
3) SPS Activities and FPS Activities
SPS (Subaru Production System) Activities are activities of Fuji Heavy Industries Ltd. aimed at supporting improvements to the productivity of local companies and strengthening their business structure. The activities that were started in January 1991 began with initiatives focused on productivity improvements, quality improvements, and inventory reductions.
During the year that SPS Activities were started, Fuji Heavy Industries Ltd. had been commissioned with the production of the Pulsar by NISSAN MOTOR CO., LTD., and we were delivering Pulsar components to Fuji Heavy Industries Ltd..
Our participation in SPS Activities was delayed by about one and a half year, and our participation started from the third year report meeting. While concrete activities initially covered factory tours and cell unit workplace improvement guidance, this was gradually expanded to include business management.
On the other hand, FPS Activities is a naming for the company's activities adopted in response to SPS Activities, referring to the Fukai Production System based on the Toyota Production System. FPS Activities were established at the same time as participation in SPS Activities, and we strongly promoted these FPS Activities as one of the three pillars for our medium-to long term management plan, the A21 Plan.
SPS Activities provided us with the opportunity to study words we had never heard before such as the money-making 5Ss, three actuals + principles approach (gogen shugi), 5 form management, LCA, and moving equipment closer to workers for better efficiency. and to also study process design and process control.
These results of these activities were not only extremely useful for productivity improvements, but also quality improvements, inventory reductions, logistics, and standardization, which in turn made a significant contribution to increased sales and improved productivity.
(7) Efforts to Strengthen the Business Structure and Achieve Sales of 15 billion Yen [From 2004 To 2007] - Company Developments -
1) The S-5 Plan and strengthening the business structure
Looking back at the company's past two medium-term management plans, first there was the RE Plan that aimed to improve the business structure to a profitable one, and we achieved this goal by producing profits during the final year. The A21 Plan that followed consisted of a shift from defensive management to offensive management, and the company was able to advance considerably as technology development resulted in new technologies being adopted by clients and contributed significantly to sales and quality improvements, productivity improvements, and inventory reductions were made through FPS Activities. The business results for these measures were profits that always exceeded the targets.
Against this backdrop, the next medium-term management plan called the S-5 Plan was launched in April 2004 in an aim to further strengthen the business structure. There were several large earthquakes during this year including the Niigata Chuetsu Earthquake in October, and the Great Sumatra Earthquake and the Indian Ocean Tsunami in December, resulting in over 230,000 deaths.
The good news was the winning of the Nagoya International Women's Marathon in March of the following year by Yumiko, the second daughter of Yoshio Hara of the Assembly Section, which brought excitement and joy into the company.
In addition, as part of the aim of the S-5 Plan to achieve highly efficient management and become an industry leader, executive training was held for a period of six months and the completely new sales goal of 15 billion yen was deployed.
2) Organization of idle assets
When the S-5 Plan began in 2004, the global economic situation had changed considerably. As previously stated, while Fukai MFG Co., Ltd. recognized the collapse of the bubble economy by the fall of the scrap price to 6 to 7 yen/kg, there were talks of prices of 20 yen/kg in March 2004, and in May the company could also have talks of increases in raw materials prices. The reason for this is that the high growth of the Chinese economy lead to the revitalization of the global economy including Japan.
With this improvement of the Japanese economy, there was some response to the idle assets we had offered for sale. First, a former single dormitory site along Japan National Route 50 that was offered for sale during the RE Plan was sold through a major real estate company in September 2005 and became a housing display site. After this, the sale of idle assets continued, as sale of a recreation facility in Gochi, Niigata prefecture was decided on in November 2005 and sale of the building and land of a recreation facility in Sarugakyo, Gunma prefecture was decided on in November 2006. As a result, we were able to sell three idle assets in a period of about a year. Furthermore, our affiliate Sun Transport sold an office and land at the Noda Truck Lot in Ashikaga city in February 2006.
While the disposal of idle assets had been a management issue from the RE Plan, the achievement of disposal ten years later during the S-5 Plan through the various efforts of everyone involved and the changes in the economic environment ten years made a significant contribution to the improvement of our financial position.
3) Initiatives for the future
The company's performance stabilized at the end of the A21 Plan and sales hovered at around 13 billion yen. However, we continued to receive requests from clients to reduce costs, and as we struggled to respond we needed initiatives aimed at achieving future growth.
First, as a human resources initiative, an executive officer system was introduced in October 2006. The purpose of the introduction was to foster the development of the next director candidates. In education, the Education Committee was established based on the idea that human resources are what make companies possible, and after a little over two years of studies, major revisions were made to the internal education system in 2007.
Furthermore, from October 2004 we started holding in-house English courses that continue to this day in response to the globalization of the business environment and the increase in overseas business trips. In addition, as a measure to improve the level of work-site operations, we commenced initiatives aimed at increasing the number of national skills test certifications, and there were employees that became certified in the following year as a result.
In terms of facilities, a 2700t transfer press was installed in December 2005 as additional equipment for high tensile steel in line with the further reduction in vehicle body weight that is anticipated in the future. As it was a high-priced investment, it was necessary for all employees to work to achieve full-scale operations as soon as possible.
In addition, in response to the lack of assembly workspace, in October 2005 the Komaba Plant was acquired, and at the same time the assembly workspace for equipment and jigs that was at the west side of the Otsuki Plant was transferred to the Komaba Plan where operations were subsequently launched.
In the future we must continue to work to achieve business management that takes the initiative to address issues from every angle, including both tangible and intangible aspects.
4) Strengthening of the business management system through the introduction of a quality management system
With the ongoing culling of redundant companies and the contraction of secondary industry, we would like to first thank our customers for allowing us to have reached our 70th year as a manufacturer. Valuing customers is not only reflected in the company policy of Fukai of "3 Highs and 3 Joys," it is also the starting point of our quality management system.
The company's first quality management system was ISO9000. In response to the spread of global standards, Fuji Heavy Industries Ltd. requested that we introduce such a system at the time of the briefing for 1995, and activities aimed at acquiring certification were started from the following year.
Guidance began with studying inputs and outputs with a consultant. In our struggles to adopt, maintain, and improve ISO9000 compliance we made efforts to achieve QS9000 as a first step, but QS9000 was subsequently abolished, forcing us to take on the further challenge of TS16949 adoption. It was through these efforts that the company's business management systems were steadily improved. Our current business management system remains one that is based on the quality management system TS16949.
However, the fact that there are always many suggestions in the external audit by the certification body TUV Rheinland Japan Ltd. indicates that there are still many issues. Our current aims include the prompt achievement of the further pursuit of studies by each and every employee involved in system operation and a system in which operations are implemented by all employees without over reliance on only some employees.
(8) Towards New Goals  - Company Developments -
With the passing of time, our company became 70 years old in 2008.
A space base that was thought to be something from the world of science fiction 70 years ago became a reality, and Japan established its first manned space facilities called Kibo.
In the same month, the newspapers reported that our main bank Ashikaga Bank that had been temporary nationalized had been transferred to Nomura's management.
During this 70th year, the fourth year of the medium-term management plan called the S-5 Plan was underway. While the main management goal for the S-5 Plan was securing sales of 15 billion yen, as a result of efforts during this fourth year including technology development, sales promotion activities, and new vehicle launches (Impreza, Forester, Accord, etc.), sales of 16.8 billion yen were achieved one year ahead of schedule. At the same time, our business structure became improved through knowledge accumulation and diligent efforts, and it became possible to steadily generate profits.
In terms of global developments, the global economy that had been strong until around the mid-point of the previous year began to slowdown due to the subprime mortgage problem in the US, and there was the strong sense that the global economy was beginning to become integrated.
In addition, the world was becoming more complex both overseas and Japan as a result of global environmental issues, falling birth rates, and the rise of the BRICs (Brazil, Russia, India, and China).
It is difficult to predict the future during any era. However, it is necessary to accurately identify global trends, prioritize customer satisfaction, and for the entire company to move forward towards our goals. [Going concern]