Catchee Mitsubishi

Murray Sayle

Tokyo Everybody in the data-processing busi- ness admires the inventiveness of Inter- national Business Machines, the giant American manufacturer of giant com- puters, and no one, it would seem, more sincerely than Hitachi and Mitsubishi, IBM's almost as gigantic Japanese com- petitors. How else to explain the pre-dawn visit, last November, of Japanese computer engineer Jun Naruse to an aircraft engine factory in Hartford, Connecticut, specially to see and photograph a brand-new IBM machine in action?

Naruse-san was accompanied, it appears, by one Alan Garretson, of Glenmar Associates, a California firm specialising in `industrial research'. Arriving at the plant of Pratt and Whitney at five a.m. the pair collected spurious company identity badges, which persuaded the armed guards on duty to admit them to the research and development section of the works, normally barred to outsiders. Hiding in a darkened room while a guard opened a combination lock, Garretson and his oriental companion entered an inner sanctum where an IBM 3380, still on the classified list, was searching its memory over a problem in tur- bine blade design, floppy discs whirring and neon tubes blinking in deepest electronic thought.

As he raised his Nikon, Naruse-san was warned by Garretson not to include any of the Pratt and Whitney background in his photographs, which might reveal where they had been taken. The inquisitive pair then left, and three days later Garretson produced maintenance manuals for the computer, for which Naruse paid him $7,000 cash, departing for Japan soon afterwards with his snapshots and pur- chases.

Only a week later Garretson had a letter from Naruse's boss, Kenji Hayashi, chief design engineer of the Hitachi factory at Odawara, near Tokyo, enclosing a 'con- sultation service contract'. Hitachi, as en- thusiastic users of Japanese products will know, is the biggest electronics firm in Japan, and according to the Japan Com pany Handbook is 'closely following IBM

in the heavy-duty computer area'. How closely emerged in Hayashi's letter: what particularly interested Hitachi, he explain- ed, was the 'architecture' of IBM model 3081, IBM's very latest super-secret machine. There followed a series of telephone calls and meetings in Las Vegas, Hawaii and other romantic places, at which Hayashi, after some haggling, agreed to pay $525,000 for Garretson's 'research' into IBM's forthcoming products.

Meanwhile, what of Mitsubishi Electric, rival of both Hitachi and IBM in the cut- throat big computer game? Being Japanese they had, inevitably, not been idle. In fact, while the Hitachi men were busy buying IBM data, a certain Takaya Ishida, com- puter planning group chief of Mitsubishi, seems to have arrived in Santa Clara, California, on a similar shopping trip. San- ta Clara is, of course, in the famous 'Silicon Valley', the heartland of the American ad- vanced electronics industry. Here the Mit- subishi man met the same ever-helpful Gar- retson and explained that he was also in- terested in the IBM 3380 model, already (unknown, of course, to Mitsubishi) the subject of Hitachi's early morning photography session. More meetings followed, in which the Mitsubishi side reportedly offered a 'large sum of money' and Garretson said that the required infor- mation could be procured through 'shady `Sorry, son, you can't come in — you're under 40.' channels' for $75,000. The Mitsubishi men offered to set up a dummy company to con- ceal the payments, and $6,375 was in fact paid and another $19,500 promised for last week.

How, readers may be wondering, do we come to glimpse such fascinating vig- nettes of 20th-century business life, sharp and clear as if they had been caught on a Japanese video-tape recorder? The answer is, it seems, they were. 'Alan Garretson' is an agent of the Federal Bureau of Investiga- tion, and `Glenmar Associates' is the San Francisco headquarters of the FBI, the local cop-shop, in fact, for Silicon Valley. And, according to FBI agent Kenneth Thompson in charge of the case, the meetings, letters and money payments in- volved were bugged, microfilmed and videotaped both for posterity and for the grand jury which is due to begin hearings in San Francisco this week.

It was the cash payments by both Japanese companies last week that seem to have convinced the FBI they had enough evidence to proceed to arrests. So far, nine suspects have been taken in, all Japanese or Japanese-Americans. They include the engineer Hayashi from Hitachi, picked up in his hotel, and a computer designer frog] Mitsubishi, one Tomizo Kimura, who was arrested by FBI agents aboard a Tokyo. bound Japan Air Lines plane waiting to take off from San Francisco airport with, according to the FBI, a suitcase 'crammed with IBM data' cradled on his knees. In ad. dition, -the FBI has issued a list of twelve wanted Hitachi and Mitsubishi employees currently in Japan. All have been charged with the same offence, conspiracy to transport stolen property, namely plans and documents belonging to IBM, to Japan. Another giant Japanese-American scandal. in short, is upon us.

The FBI conduct of the investigation has a familiar ring. The decoy is, of course, as old as Delilah, but, along with such tried police techniques as the third degree, the rubber hose-pipe and the frame-up, the use of the agent provocateur has often led to uneasiness. While the old-fashioned finger' print, informer and courtroom confessioo leave little room for doubt, entrapment cases often wind up in arguments about e%' actly what was said, and in what tone of voice, who seduced whom, and whether the accused had genuine guilty intentions, of just thought he was following local custom, The videotape recorder, in which Japan has a world monopoly (Hitachi alone makes 100,000 VTRs a month) has revolutionised the strategy, by enabling jurors to view the guilty man, as it were, on the job, and t° judge by his demeanour whether he thought he was doing wrong. It was the courtroom appearance of American Congressmen on the screen, taped in the act of accepting bribes fron' fake Arab 'sheikhs', which enabled the FI31 to secure convictions in the celebrated `Abscam' trials of 1980, and the burea0 would seem to be relying on the same mix' ture of show business and electronic wizar- dry in this case. The papers (even in Japan) are already calling it `Japscam'. Predic- tably, perhaps, the first Japanese reactions have been to deny all guilt, to argue that the Japanese engineers were innocents let loose in the jungle of American business, and to hint that the FBI was in league with IBM to discredit Japanese competition. According to the Daily Jomiuri, the next step may be for IBM to seek an injunction against the sale of computers made with stolen infor- mation, in the paper's view a real below- the-belt blow to Japanese industry.

Tokyo police, refusing extradition of the wanted men from Japan even before the de- mand has arrived, have made a point which is sound in logic if not in Anglo-Saxon law: if the data was stolen from IBM, why have the FBI agents themselves not been arrested and charged? And if IBM merely lent it out for the purpose of setting up semi-innocent Japanese, then how can the stuff properly be described as 'stolen property'? We can see a legal defence taking shape here. Unfortunately, under the law of con- spiracy, an ingenious 17th-century British invention, it doesn't matter whether the stuff was actually stolen or not. Whichever way the verdicts go Japan's reputation, carefully burnished over the decades, as a veritable fountain of dazzling new technology, has clearly taken a heavy blow. The suspicion, never far away, that the Japanese owe their present prosperity to systematic stealing of other people's ideas will doubtless surface again, with the 20 million currently unemployed in Europe and the United States all too ready to listen.

Japanese business ethics have certainly

enjoyed an appalling reputation over the centuries. In the days of their haughty hegemony over all Asia, the Chinese used to call their island neighbours 'monkey thieves', partly because of Japanese short stature (by comparison with northern Chinese) and predeliction for piracy, partly because of a legend that the Japanese na- tion descended from a Chinese princess who had been stolen by a sea-going monkey, thus explaining the great similarity and Puzzling differences between the two cultures.

Certainly history shows few examples of one society rifling the ideas of another as striking as the way in which the Japanese took over Chinese writing, thought, science and technology. The only one that comes readily to mind is the way in which the Teutonic peoples of Europe, headed by the English-speakers, ripped off the achievements of our more civilised Latin neighbours. In this mass pillage we might, however, notice some small Japanese inven- tions and improvements, modest but prac- tical: the paper lantern to shield a candle from the rain, for instance, or Japanese soy sauce which even the Chinese, who ought to know, prefer to their own.

When the American gunboat trader, Commodore Matthew Perry, arrived in Japan in 1854 with samples of Western

technology like the steam train and the elec- tric telegraph (neither of them American in- ventions by the way), it was not surprising that Japanese inferiority feelings towards China quickly turned towards the achievements of the new, long-nosed foreign devils. To this day, Japanese have an ingrained conviction that foreign manufacturers are, in the nature of things, superior. This partly explains the Japanese passion for giving their own products English names which suggest an origin over the seas, names which often seem to have been suggested by maliciously-inclined English speakers: witness the 'Colt' and `Corolla' cars, whose 'I.' sounds are all but unpronounceable by Japanese motorists, `sweat' soft drinks, 'Homo' processed milk, 'Queer-aid' chocolates, `Snutch' tof- fee and 'Creap' cream substitute. Even the name of the Japan Air Lines in-flight magazine, Winds, might perhaps have been better chosen, although it is already an im- provement over JAL's original choice, Wind.

Japanese manufacturers have often used foreign-sounding names when there was ho need to, or when lifting was positively counter-productive, a clear sign of deep- seated insecurity. Mitsubishi Motors, for instance, over impotent protests from the French aeroplane makers Sud Aviation, call one of their cars 'Mirage', while the Japanese zipper giant, YKK, for years in- sisted that their brand name 'Eflon' bore no suspicious resemblance to the American maker Dupont's 'Teflon', despite the fact that quick-close connoisseurs all over the world are unanimous that YKK zippers lead the field. For years foreign schoolchildren were taught that the southern Japanese town of Usa, already ancient when George Washington was still a loyal British subject, had been specially named so that cunning Japanese could label their products 'Made in USA'. Critics have even pointed out that 'I warned you about his militant tendency.' the Japanese national anthem, the haunting `Kimigayo', is actually the mediaeval Euro- pean plainsong 'Die Nobis Maria', although the words are authentic 11th- century court Japanese.

here, on the thorny problem of Japanese originality, does the truth lie? From idea to market-place is a long bumpy road, and we are clearly in a horses for courses situation ongoing these many cen- turies. For sheer, beginning-from-basics in- ventiveness, toiling in dingy back rooms while wives and children whimper for bread, the British held the record for many years and probably hold it still. For the ideal combination of ingenuity, openness to new ideas, the ability to marshal huge resources and unflagging pursuit of pro- fitable exploitation, the Americans have been the champions most of this century, as witness the careers of Thomas Edison and Henry Ford and, in our own time, the miracles worked by the incantation 'Think' on the lips of Thomas J. Watson, the semi- divine founder of IBM.

However, when it comes to pure produc- tivity, the Japanese have in recent years passed all their rivals, east and west. This has not come from any great theoretical breakthroughs, which have indeed seldom illuminated Japanese brains, but rather from necessity and a kind of human engineering rooted in Japanese history, Told how to do something, Japanese can almost always find a way of doing it better, faster or cheaper, often all three and this kind of achievement is well worth our study, even at five a.m. in the morning.

In the years after 1945, the international economic going suited Japan to perfection, with a limitless flood of farmers pouring in from the rice paddies, and all the technology generated or stimulated by the second world war — electronics, television, automatic machinery, mass production and the rest — flooding into Japan, often free, or sold for what turned out to be pittances. Japanese have always had an open mind about new ideas, -irrespective of their source, or to be more precise, they have regarded foreign ideas as a gift from the outside world, to be paid for in full by the humble Japanese tribute of imitation.

The notion that a foreigner might think he had property rights on an idea, just because he had laid out money on it (IBM have spent $7.6 billion on research and development in the past six years) still seems odd to Japanese. Until quite recently, the idea that there were limits to American resources seemed strange to Americans, too.

This light-hearted, or light-fingered, view of the value of ideas does not, of course, ex- tend to those the Japanese have developed at their own expense. Nikon will not allow people from rival camera concerns to visit their works, and I have personally been dissuaded, very politely, by Honda ex- ecutives from peeping into a part of their factory where a new model was taking shape. But this was in Japan, not the US or

Europe, still in Japanese eyes the pays des merveilles.

Japanese are, as well, keen visitors of foreign factories, usually during business hours, and eager buyers of foreign products which they dismantle in search of not-too- heavily patented ideas. This is known in the trade as 'reverse engineering' and every manufacturing concern in the world, except the unsuccessful ones, does it. But the inter- national climate has changed: the ideas of the second world war, in their original form, have all been used up, and now that atomic energy has run into the sands, the electronic data processing business, both in its civil and military forms, appears to be the tidal wave of the future. The special conditions of the computer trade explain, if they do not justify, the curious goings-on behind 'Japscam'.

Japanese can make a computer (the `hardware') as well as anyone in the world, probably better. (In fact, Hitachi does some sub-contracting of components for the Japanese branch of IBM.) Increasingly, however, the skill lies in devising the pro- grammes which direct the computers at their eerie labours (the 'software') and here the Japanese are, by universal agreement, weak by comparison with their American competitors. Part of the trouble lies in the fact that the software at some stage has to be written in the English language, part in the sheer PhD-power which IBM, with 70 per cent of the world market in mainframe computers and every university in America to graze over, can muster.

The Japanese computer industry has at- tacked IBM's near-monopoly in various ways. One concern, Fujitsu, is hardly known outside the country, because three quarters of its output is sold under the brands of Seimens, Amdahl, TRW, ICL and other famous European, British and American makes, and only an industrial mountaineer with a powerful torch is likely to find the modest 'Made in Japan' somewhere on the machine. All these firms are, of course, IBM's competitors. Some call this shameless, but Fujitsu is the biggest and most successful computer firm in Japan, and pride fills no ricebowls.

Mitsubishi, a huge combine in other ways, has not had much luck in marketing its own make of computer under its own three diamonds trademark, well known even before it adorned the best-selling 'Zero' fighter. Japanese stinginess seems to have led them into the `Japscam' trap. Naturally, Mitsubishi likes to keep an eye on what the competition is doing, but buy- ing one of the latest IBM computers for `reverse engineering' now costs $40 million. At those prices $20,000 for a set of manuals and operating instructions, as offered by 'Alan Garretson', looked like a bargain, and before they knew it the frugal Mit- subishi men were on camera.

Hitachi, even in Japan a cheeky outsider in the computer business, adopted another approach. If diligent and painstaking Japanese are so good at making computers, and imaginative Americans, heavily sub- sidised by procurement orders from NASA and the Pentagon, excel at thinking about them, why not combine cheap and reliable Japande hardware with polished, penetrating American software? This tran- sistorised version of the Madam Butterfly story is exactly what Hitachi was offering, with the promise that their products would be. 'compatible', practically old married folks, with IBM's. To defeat this manoeuvre, IMB's newest machine, the 3081, has part of the software wired into the mainframe, as computer people say in their gritty jargon. So in order to make a machine which would work with the 3081's as yet unwritten software, Hitachi had to know the private parts, as it were, of the prototype 3081, to get an idea of its `ar- chitecture', in order to — we might as well as be blunt here — copy it before IBM` could collar the whole world market.

`Alan Garretson' had the data to sell. He came recommended by a long-time consul- tant of Hitachi, one Maxwell 0. Paley, who turns out to be a former IBM employee with a Japanese-style sense of loyalty to that most Japanese of American com- panies. The equally loyal and patriotic Hitachi men were tempted, they fell, and before they knew it, they were taking a screen test for the FBI.

So, whatever happens, some of the darkest suspicions about the Japanese have apparently been confirmed. Just one in- dication of how rough the big computer game is becoming, now that the world economy is slowing down under the curb of the horseman from Hollywood, is the fact that Hitachi were bound to have been rumbled anyway, as soon as they produced, their first machine 'compatible' with the 3081.

Japanese perceptions of themselves as poor, put-upon latecomers to the industrial race, on which their national survival depends, will be confirmed, and so will foreign notions that it is unwise to leave a son of Nippon alone with the family silver, or secrets. One sad and distinct possibility is that some Japanese underling will feel the need to kill himself to 'take responsibility' on behalf of company and fatherland.

An ingenious invention, the Japanese video-tape recorder. It leaves fewer marks than the rubber hose-pipe in practised police hands, and is twice as deadly.