The Japanese Sandmen

In the middle of a gloomy, unheated factory building in Yokohama, a group of Japanese and American businessmen solemnly lined up last week behind a white-robed Shinto priest and faced a bright orange-colored power shovel. Waving branches of the sakaki (sacred tree) before a makeshift altar, the priest intoned: "On this felicitous occasion, we pray for the continued magnanimity of the gods in showing favor to this undertaking."

With this ceremony, the first of a new line of earthmovers, excavators and powered dump cars came off the assembly line in Japan. If the gods do look favorably on the enterprise, it will be because of the foresight of Julien R. Steelman, 47, president of Milwaukee's Koehring Co., which supplied know-how and a small amount of capital, and Japanese Industrialists Toshio Doko and Hiroyuki Hayashi, heads of Ishikawajima Heavy Industry, which furnished most of the capital and a plant. Together they formed the Ishikawajima-Koehring Co., to provide Japan with the tools for some of its major construction projects, notably a vast hydroelectric program of the government.

Choosing Partners. When the program was drawn up two years ago, it was only natural that Japan's construction firms turned to Koehring Co. for equipment. Koehring provides much of the concrete-handling equipment for giant dams in the U.S. (the company's estimate: 50% to 90%), as well as earth-moving machines. But Steelman not only knew that it is best to build heavy equipment where it is going to be used, but that the Japanese lacked dollars for large-scale imports.

So he decided to go into business with Ishikawajima, which had built engines for Zero fighters during the war, and postwar had switched some of its machines into the manufacture of textile machinery. Koehring Co. took one-fourth of the stock in the new company and a royalty of 5% on gross sales. In return, it gave its technical help, and undertook to train Japanese technicians in the U.S. Since then, the company has turned out $1,000,000 worth of cement-handling equipment, increased its backlog to $700,000.

Changing Designs. The huge earth-moving projects planned by the Japanese should assure the magnanimity of the gods for years to come. The hydroelectric-program called for adding 3,900,000 kilowatts in five years (equal to 36% of Japanese capacity at that time), by building new dams as well as replacing low dams (that become useless when river waters are low) with high dams. The government also has a $1 billion roads program and plans for a new Tokyo reservoir that will require the sixth highest dam in the world and the biggest in the Orient (480 ft. high, 1,122 ft. long).

To help in these and other projects, the Japanese government has approved 293 technical-assistance agreements, 95% of them with American firms. But Koehring's is the first in the field of earth-moving and cement-handling machines. The Japanese business should eventually mean a sizable increase in the Koehring Co.'s sales, now running about $26 million a year (1952 net: $1,139,991).

For their part, the Japanese are happy. Says Hayashi, managing director of the plant: "They are most understanding and are ready to work out new specifications to fit our needs. This has really amazed us, since most American or other foreign firms do not like to change specifications to meet Japanese demands."

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