The History of the Mitsubishi Group

The Founder

Iwasaki Yataro
(1835-1885)

An ambitious young man named Yataro Iwasaki launched the first Mitsubishi
company–a shipping firm–in 1870. Japan had just emerged from centuries of feudal
isolation and was racing to catch up with the West. Yataro’s business grew rapidly
and diversified into a broad range of manufacturing and commerce. World War II
brought an end to Mitsubishi as an integrated organization. But independent
companies that trace their roots to the old Mitsubishi are active today in nearly
every sector of industry.

Yataro Iwasaki was from the city of Kochi on the island of Shikoku,
which was the home of the powerful Tosa clan. He worked for the clan
and distinguished himself in managing its Osaka trading operations.
In 1870, he set up his own shipping company, Tsukumo Shokai, with three
steamships chartered from the clan. That was the beginning of Mitsubishi.

Origins of the Famous Emblem

Three Tosa leaves join three stacked rhombuses to become three red jewels.

The name of the new company changed to Mitsukawa Shokai in 1872 and to Mitsubishi
Shokai in 1874. Yataro chose a corporate emblem that combined the three oak leaves of
the Tosa crest and the three stacked diamonds of his family crest. That emblem is the
source of the name, Mitsubishi, which means “three diamonds.”

Yataro made a public display of patriotism in 1874, providing ships to carry Japanese
troops to Taiwan. That earned the gratitude of the government, which rewarded him with 30
vessels. Yataro changed his company’s name to Mitsubishi Mail Steamship in 1875, when
it inherited the employees and facilities of a mail service disbanded by the government.

“Mitsubishi” and the Famous Three-Diamond Mark

The name “Mitsubishi” refers to the three-diamond emblem. “Mitsubishi” is a combination
of the words mitsu and hishi. Mitsu means three. Hishi means water chestnut, and Japanese
have used the word for a long time to denote a rhombus or diamond shape. Japanese often bend
the “h” sound to a “b” sound when it occurs in the middle of a word. So they pronounce the
combination of mitsu and hishi as mitsubishi.

Yataro Iwasaki, the founder of the old Mitsubishi organization, chose the three-diamond
mark as the emblem for his company. The mark is suggestive of the three-leaf crest
of the Tosa Clan, Yataro’s first employer, and also of the three stacked rhombuses
of the Iwasaki family crest.

A perennial subject for speculation is why Yataro chose not to put his own family name on his
new company. If he had, we now might speak of Iwasaki Heavy Industries, Iwasaki Electric, and
Bank of Tokyo-Iwasaki. But he opted for a different name.

Whatever Yataro’s reason for refraining from using the Iwasaki name, it surely wasn’t
modesty. Yataro was a bold and aggressive leader. Still, he might have felt some deference
toward the Tosa Clan. Support from the clan was instrumental in launching his inaugural
venture in shipping. And putting his own name on that venture might have seemed overly
impudent, even to Yataro Iwasaki.

Rapid Growth. Then Adversity

Mitsubishi Mail Steamship inaugurated service to China and Russia and enjoyed a
virtual monopoly on overseas routes. But the political winds shifted against Mitsubishi
in the early 1880s, and the government sponsored the establishment of a competitor. The
ensuing competition nearly bankrupted both companies.

Government intervention produced a temporary truce. But cutthroat competition resumed
when Yataro died in 1885 and was succeeded by his brother Yanosuke. The feud ended with
a government-arbitrated merger in 1885, which created Nippon Yusen–today’s NYK Line.

Beyond Shipping

While competition was escalating on the sea, Mitsubishi was diversifying ashore.
The company purchased the Yoshioka copper mine in Akita and Takashima coal mine in Nagasaki.
It leased the Nagasaki Shipbuilding Yard from the government in 1884 and later engineered
Japan’s first domestically produced steel steamship there.

Mitsubishi continued to grow and diversify under the autocratic leadership of Yanosuke
Iwasaki. He bought up more mines to provide resources for Mitsubishi and Japan’s growing
industries. And he dropped “Steamship” from the company name. He also paid the equivalent
of approximately US$1 million for 80 acres of swampy marsh next to the Imperial Palace in
1890. Ridiculed at the time, Yanosuke’s investment today is worth many billions of dollars.

Modern Management

Yataro’s son, Hisaya, assumed the presidency in 1893. The University of Pennsylvania graduate
restructured Mitsubishi to support increasingly diverse business operations. He set up divisions
for banking, real estate, marketing, and administration, as well as for the original mining and
shipbuilding businesses.

Some of Hisaya’s private investments are part of today’s Mitsubishi companies. He purchased
the Kobe Paper Mill, which is today’s Mitsubishi Paper Mills. And he backed the founding of
Kirin Brewery. His cousin Toshiya founded Asahi Glass, Japan’s first successful manufacturer
of plate glass.

Mitsubishi management modernized further when Yanosuke’s son Koyata succeeded Hisaya
as president in 1916. Koyata, a graduate of Cambridge University, incorporated the divisions
as semiautonomous companies. He steered Mitsubishi to leadership in such sectors as machinery,
electrical equipment, and chemicals. The companies that later became Mitsubishi Heavy Industries
developed automobiles, aircraft, tanks, and buses. And Mitsubishi Electric became a leader in
electrical machinery and in home appliances.

Beyond the Family

The Iwasaki family relinquished some of its control over Mitsubishi
through a public offering of shares in the core holding company. By the end of World War
II, outside investors held more than one-half of the equity.

Koyata Iwasaki encouraged his managers and employees to stand above the xenophobia that
swept Japan during the war years. “We count many British and Americans among our business
partners,” he reminded Mitsubishi executives shortly after the outbreak of hostilities.
“They are our friends who have undertaken projects together with us and who have shared
interests with us. Should peace come again, they should again become good and faithful friends.”

Separate Paths

After the war, the allied occupation forces demanded that Japan’s big industrial
groups disband. Mitsubishi Headquarters disbanded on September 30, 1946, and many of
the Mitsubishi companies split into smaller enterprises. The trading arm fragmented
into 139 companies. Mitsubishi Heavy Industries became three regional companies. Most
of the Mitsubishi companies abandoned the name and emblem under pressure from the
occupation forces.

On the outbreak of the Korean War, the occupation policy shifted to an emphasis on industrial
and economic reconstruction. Some of the Mitsubishi companies reconstituted themselves, and
most began using the name and emblem again. But they retained their autonomy. The companies
achieved far more individually and independently than they ever could have accomplished as
a single organization. At the same time, they benefit from the shared sense of community
that accrues from a common history and corporate culture.

Mitsubishi Electric Genealogy

Mitsubishi Electric Corporation was founded in 1921 when Mitsubishi Shipbuilding Co.
(currently Mitsubishi Heavy Industries, Ltd.) spun off its marine electric motor factory in Kobe.

Subsequently, Mitsubishi Electric firmly established itself as a diversified electric equipment
manufacturer, branching into nearly every sector related to electric equipment.

The time-line chart of Mitsubishi Electric