Thirty-five years ago, Nippondenso Co. Ltd. sent a young engineer named Akira Kataoka to scout out possibilities in the United States. Kataoka had no contacts, no contracts, little money.
He persisted, no matter how many hundreds of times potential customers turned him and the Toyota Motor Corp. affiliate away. Early sales to McCulloch Corp. and John Deere Co. paved the way for bigger deals with Ford Motor Co., General Motors and Chrysler Corp.
Last week, 'Andy' Kataoka retired as chairman of Denso International America Inc. The former Nippondenso America Inc. now has more than 10,000 employees and did $3 billion in North American original equipment sales last year. In 1997, General Motors picked the company as its top supplier of the year. Denso is the ninth-largest supplier of OE parts to North America. Products include heating, ventilation and air conditioning parts; electrical and electronic components; filters; and fuel-management systems.
Through the years, Kataoka has headed sales offices, led engineering centers, managed a plant in Tennessee, and served as a board member for the parent company in Japan. In 1987, he returned to his native country. Four years later, he was back in the United States, where he became president of Denso International in 1994.
On the eve of his retirement, an e-mail message from a colleague on assignment in Japan praised Kataoka as the driving force behind Denso in North America: 'Your keen intellect and kind way in dealing with employees and customers are your trademark, which most leaders should strive for but usually fall short.'
This spring, he looked back on his early days in the United States during an interview with Staff Reporter Robert Sherefkin at Denso's headquarters in Southfield, Mich. Edited excerpts:
You were Denso's sole U.S. emissary. You had impediments. You had to learn English. You had a very small budget. How did you make inroads?
Denso looked at Sony. Mr. Morita used to be the Sony chairman. He invented the tape recorder. He was very successful at that time. He was looking in New York for business or technology. So Denso wanted me to go to the United States to look at the business and look at technology.
So at that time, frankly speaking, there were not so many Japanese people overseas. When I left Japan in 1964, everyone thought I was saying goodbye forever. It was a very big challenge. It was very scary for me.
I came to Los Angeles and did not have much money. Japan was a poor country at the time. The government only allowed me to take $3,500 a year out of the country. I did not know how I would survive. I could not afford a rental or leased car, so I had to walk everywhere. I made many friends and asked people to help.
Why did you go from Los Angeles to Chicago?
I was looking to settle in Chicago since it was a business city. On one stay, I looked for the cheapest restaurant; I found Todd's Steak House. For $1.25, I could get one steak, one big potato, cole slaw. Good deal, right? I ate there every day. It was about five blocks from the motel to the steak house. It was in the beginning of winter - very cold and windy. We froze to death walking from the motel to the steak house! I carried a small bottle of whiskey. We would stop and drink to keep warm and walk some more. Then we went in the steak house and ate, and then warmed up. On the way back from the restaurant after one block we would be cold again, so I would stop for a drink of whiskey. So by the time we returned to the motel, the small bottle of whiskey was finished.
In 1969 I moved to Chicago. This was only for the John Deere business - small. In 1971 I tried to close the office - I thought it was enough staying in the United States. But a telegram said move to Detroit. So I moved.
What were your first dealings with the Big 3?
Here in Detroit we used a manufacturer's rep, Angov Rex Corp. They introduced me to the chief engineer of the Ford Motor Co., Mr. Thibodeaux. He suggested that we make a small motor, a windshield-washer motor. This was in the very early stages of mass production for Denso. Later, we supplied Ford 100 percent with these windshield-washer motors.
Gradually, the business expanded. We were working with GM, Chrysler and with Ford. We had contract work, and we tried to make very high-quality products so people knew Denso made very high-quality products.
In the beginning there was still a reputation that Japan did not make quality products. How did you convince the customers?
Here in the United States we tried to educate. In Japan everything was a starting point after the war. We needed something unique, or something good, that the customer would be satisfied with. Otherwise we could not survive in Japan. So, management looked at quality and satisfaction for the customer, then the customer continuously would buy our product.
It took patience over all of those years.
The key is confidence and respect. Then we get the business.
The first time we designed a turbine starter motor, it was only a prototype. No business yet. Then I tried to get business. One hundred twenty-five visits to John Deere purchasing, almost a year and a half. Sometimes I went twice a week to stop by and say hello. That way I made friends.
I asked, 'Why don't you try this one?' They had a very bad quality problem with their starter motor. Then we started to talk with Japan and design them and bring them here. First year, sales increased by 25 percent. Good quality, no problem. Then people requested the Denso product to replace a competitor's product. The competitor had a lot of problems. Denso motor, no problem. Then the next year sales increased by 50 percent. Then the next year, 75 percent. Fourth year, 100 percent.
You worked first with McCulloch Corp. and John Deere. How did you expand with the U.S. automakers?
In the beginning stage we were not superior quality but tried to make the best product and challenge ourselves. At that time, Ford really enjoyed our products. So then Denso built a plant in Battle Creek (Mich.) and Tennessee. Battle Creek made only air conditioning, and Tennessee made many products.
I managed the Tennessee plant. Then I educated the American people to find out when anything is different. For example, you come in the morning and switch on the machine. If the sound is a little different than yesterday, then at this point you should check why there is a different sound. If there is a different sound or vibration or maybe squeaking - once you realize something is different, then you check it for a related problem.
You built your technical center in 1987. How did that come about?
In the very beginning when I came to Detroit, we had a very small, five-man office in Southfield. At that time I was making plans to build a plant and a technical center in the United States. My plan was to design a unique product. Everybody said, 'Andy, you are crazy. Make a plant? Set up a technical center? How are you going to do that?' But this was my dream. This was in 1972 or 1973.
What did your bosses in Japan think of that idea?
The first time I explained my plan to them they thought I was crazy, but I explained many times to them that we needed an office and a technical center. It was most important to build the technical center. The office we could borrow anyplace, but the technical center was not easy.
Local engineering is the key because of what the customer requires. In Japan or in Europe or any other country, no one knows what is required in the United States.