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Recollections by John Mellor

Hideyo Tamura

IN THE month in which we close the last of the car assembly plants in Australia – Toyota and Holden – it is interesting to reflect on a little-known story of how Toyota came to be assembled in Port Melbourne and subsequently Altona, and how it influenced Toyota’s rollout of manufacturing around the world.

As a demonstration of the sometimes fickle nature of some of the big decisions that decided decades of manufacturing activity in this country and elsewhere, few realise that Toyota’s path to becoming the biggest export manufacturing operation of fully built-up cars in Australia began with a conversation between two strangers on a aircraft.

By way of background, in the early 1960s, the Australian Motor Industries (AMI) car assembly operation in Port Melbourne was in deep financial trouble after being severely affected by the 1960 credit squeeze and some dubious product decisions.

Originally owned by Standard Cars of the UK, which made Triumphs, Standards and Vanguards, AMI had become a contract assembler which built cars like the American Motors Rambler Hornet, Rambler Matador and Rambler Rebel.

AMI had also founded Mercedes-Benz Australia and, aside from distributing fully built-up cars, it actually assembled the Mercedes-Benz 220 from completely knocked-down kits.

But the place was a mess.

Toyota Altona plant

At the time the company was assembling the Triumph Herald.

The Herald was a lightweight sedan with coupe and convertible derivatives that Triumph boasted had taken only 18 months from a clean sheet of paper to production. And did it show. When the cars were being assembled in Port Melbourne for Australians to buy, the UK engineers were still doing endurance testing in the Sahara desert.

Indeed, AMI has an unofficial proving ground on an island in the Murray River and on one occasion headed off with five early production cars for testing.

By the time they got to Broadmeadows, all the window glass had fallen inside the doors, some doors were jammed shut and, at that point after a quick assessment, the engineers decided they had enough to go along with and turned back home with more than 50 documented serious design and assembly faults to correct.

Early sales stalled as word about the quality got around and stocks of Heralds piled up. This created a serious cash issue for the company to the point that top management had to front the bank each Thursday and plead for enough money to pay the wages.

The bank insisted they clear the unsold stock or it would pull the pin. Then followed the greatest bargain bonanza ever seen in the Australian car market to that time and, for a couple of months, just about every second car sold was a Triumph Herald because they were so cheap.

But the losses at AMI were horrendous.

So, in 1961, the parent company brought in an Englishman, Ken Hougham, an affable former army officer, to sort it out.

Sayonara: The last day at the Altona assembly plant

One of his first decisions was that AMI needed to find another major partner for assembling cars and Mr Hougham was on the lookout for a new candidate to run down his assembly lines.

So he climbed on a plane to Tokyo with an appointment to see the Nissan Motor Company written into his diary.

Early Nissan Bluebirds had been getting attention in Australia for their robustness during the Mobilgas Round Australia Trials and even pulled off class wins in the late 1950s and Ken Hougham thought such a car would prove attractive to Australians.

But something happened on the plane.

Mr Hougham, in an interview with me years later, revealed that he was sitting next to a businessman, a complete stranger, who was also on his way to Japan to explore business opportunities.

When Mr Hougham told him he was going to see Nissan, the stranger told him that he thought Toyota would make a better partner because it was ahead of Nissan in sales in Japan and was better resourced.

Toyota Tiara was the first Toyota assembled at Port Melbourne

So, when Mr Hougham landed, he made an appointment to go to Toyota headquarters in Nagoya and came back with the contract to assemble the Toyota Tiara in Port Melbourne.

It was a massive achievement because it was the first time the hugely conservative company had allowed assembly of any of its cars outside Japan.

But, for Toyota, it was more than just an assembly contract. The company had some comfort with Australia because it had already been sending fully built-up LandCruisers to Australia; imported since 1958 by Sir Leslie Thiess for use on the Snowy Mountains Scheme.

But Toyota also saw the deal with AMI as a means of learning about building cars in the West.

And when Toyota subsequently built the Altona plant, it was a landmark deal because it was the first greenfield car plant ever built by Toyota outside Japan. And, yet again, a primary role for the plant was to use it as a prototype for building cars within the Western industrialised system.

The senior executive responsible for convincing Nagoya to build Altona, Hideyo Tamura, told me in an interview at the time that a prime motivation was that Toyota wanted to learn how to deal with unions, parts suppliers and governments and how to balance the management in another country between local senior executives and managers from Japan.

Ken Hougham (right) launches production of the Corona in Port Melbourne

Mr Tamura had been a key figure in the planning and expansion of Toyota’s Australian operations and was appointed deputy chairman of AMI in 1980. When he was appointed managing director of Australian operations in 1981 he became the highest-ranking Japanese car industry executive to be a resident outside Japan and took charge of the largest Toyota investment in any overseas market to that point.

And it was all about absorbing knowledge.

He said that when Toyota entered into the joint venture with General Motors in the US building Corollas in the Fremont plant in California, Mitch Inukai, which many will remember as the managing director of Toyota Manufacturing Australia at Altona, was set up in head office in Nagoya where he was placed in charge of the Fremont plant based on his understanding of making cars in Australia.

Mr Tamura, based on his experience at Altona, was eventually recalled to Japan to head up Toyota’s operations worldwide with a specific brief to find and build Toyota’s first greenfield manufacturing plant in the US.

He chose the site in Kentucky which opened in 1986 and now hosts the largest Toyota manufacturing plant in the world.

And it all started with a chance remark on a plane.

Recollections by John Mellor

Toyota Kentucky plant

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