Japan-US Business Report LogoJapan-U.S. Business Report

No. 344, May 1998

Issue Index

Japanese Companies in the US


TRANSPORTATION EQUIPMENT

Although production of TOYOTA MOTOR CORP.'s new full-size T150 pickup truck will not begin until December at the company's Princeton, Indiana factory, which still is being built, the automotive maker announced a major expansion of the plant. At a cost of $500 million, it will add 50,000 units of annual capacity to the 100,000 T150s expected to be turned out yearly. That will bring Toyota's investment in TOYOTA MOTOR MANUFACTURING INDIANA, INC. to $1.2 billion. As many as 2,300 people will be employed at the plant when the extra capacity goes on-line, now scheduled for late 2000. Roughly 1,300 workers are being hired to build the T150. Toyota was mum, however, on what the second product would be. Industry analysts speculate that it will be a large, truck-like sport- utility vehicle, in part because TMMI executives say that the new vehicle will be built on the same line as the T150 and use many of the same components. These sources also note that Toyota is one of the few automotive suppliers without a North American-built SUV or current plans to introduce one.

Production of the first mass-produced car powered solely by natural gas is underway at HONDA OF AMERICA MANUFACTURING, INC. in East Liberty, Ohio. HONDA MOTOR CO., LTD. engineers boost that the Civic GX has the world's cleanest internal combustion engine. It emits just one-tenth the pollutants allowed under California's strict emissions standards. The Civic GX, which has a 110-horsepower engine, can travel about 200 miles on a tank of compressed natural gas. Federal, state and local government agencies and utility companies are the most likely buyers of the car.

Having already test-manufactured an electric vehicle powered by an advanced fuel cell, MAZDA MOTOR CORP. plans to work with an alliance involving FORD MOTOR CO., its principal owner, Germany's DAIMLER-BENZ AG and BALLARD POWER SYSTEMS INC. of Canada to develop fuel-cell technology for future cars, trucks and buses. Today's electric vehicles use an onboard battery for power. Mazda's Demio has an electric generator that consumes hydrogen as fuel. Unlike the three other companies, which together will invest about $700 million in the consortium, Mazda will not provide capital for the project nor assign engineers to it on a permanent basis.

Transaxles for Altimas built in Smyrna, Tennessee have been added to the output of NISSAN MOTOR CO., LTD.'s powertrain assembly plant in Decherd, Tennessee, which started building four-cylinder 2.4-liter Altima engines last year (see Japan-U.S. Business Report No. 333, June 1997, p. 7). This summer, the factory will begin to make transaxles for Nissan Quest/Mercury Villager minivans assembled by FORD MOTOR CO. in Avon Lake, Ohio. Nissan has the capacity to turn out about 300,000 transaxles a year at the Decherd facility in addition to 200,000 engines. The expansion boosted employment to roughly 380 people from 200. Transaxles combine the transmission and the front axle in front-wheel-drive vehicles.

ENKEI CORP., which has built aluminum wheels for GENERAL MOTORS CORP. cars in Columbus, Indiana since 1987, will open an aluminum wheel plant in the spring of 1999 in Jacksonville, Florida. The company has earmarked about $11.4 million for the project. The new facility is projected to make 360,000 aluminum wheels in its first year of operation for sale to Japanese transplants. It will employ about 100 workers. The Indiana plant turns out 2 million wheels a year for GM. It had FY 1997 revenues of approximately $75.8 million.

With contracts in hand to supply window regulators to GENERAL MOTORS CORP. for a 1999 pickup truck and to MITSUBISHI MOTORS CORP.'s Normal, Illinois plant for the new Galant sedan, NIPPON CABLE SYSTEM INC. will expand capacity at its Litchfield, Michigan window regulator plant to 10 million units a year. The addition of the MMC factory means that the company's HI-LEX CONTROLS, INC. subsidiary and its HI-LEX CORP. affiliate, which makes control cables in Mexico, now do business with all the transplants. That should help Nippon Cable meet its goal of boosting U.S. sales of control cables and window regulators to $230 million in 2000 from about $150 million last year. Also supporting the planned sales expansion is the construction of a new, twice-as-large Hi-Lex Automotive Center in Troy, Michigan. Work on the R&D facility will start this summer and be finished next spring.

Having landed an order from GENERAL MOTORS CORP. for 80,000 automatic transmission gear shifters a year for a new Cadillac set to debut in the 2001 model year, DOUGLAS AUTOTECH CORP. will spend about $3 million to double capacity at its plant in Hopkinsville, Kentucky. That facility, in operation since mid-1995, will be able to make 600,000 gear shifters and other steering parts a year from this fall. Shipments to GM will begin in 1999. The main plant of Douglas Autotech, a wholly owned subsidiary of FUJI KIKO CO., LTD., is located in Bronson, Michigan. Since 1990, it has supplied steering parts to CAMI AUTOMOTIVE, INC., an Ingersoll, Ontario joint venture between SUZUKI MOTOR CORP. and GM that builds cars and SUVs. Douglas Autotech is projecting sales of $90.9 million in FY 2001 versus about $47 million in FY 1997.

A new five-year contract from GENERAL MOTORS CORP. starting in 2000 is behind the announcement by MITSUBISHI HEAVY INDUSTRIES, LTD. that it will build a new line at its air-conditioning system plant in Franklin, Indiana. Equally important, MHI CLIMATE CONTROL INC. plans to launch integrated production of these units. Now, the factory makes scroll compressors and combines them with heat exchangers and evaporators purchased in the United States and control systems imported from Japan. The new line, to be completed in 1999, will have the capacity to make 800,000 units a year. The order from GM, a current customer, covers 2.5 million AC systems. Testing facilities also will be added at the Indiana complex.

To better serve their customers around the world, FUKOKU CO., LTD., a manufacturer of rubber products for the automotive industry, and Plymouth, Michigan-based SIMPSON INDUSTRIES, INC. will work together to develop a common design for antivibration products for car and truck engines. The partners' plants at home and abroad will be available to manufacture the unified design.

In a similar arrangement, CHUO SPRING CO., LTD. has tied up with TRIDENT AUTOMOTIVE CORP. on control cables. Through its ACK CONTROLS, INC. production unit in Glasgow, Kentucky, the Nagoya-headquartered company is providing its control cable technology to the worldwide plants of the Detroit-area company. Chuo Spring hopes its connections with Trident will allow it to supply car and truck makers in Europe and Latin America without the risk involved in building plants in those regions. The Big Three automotive manufacturers are ACK Controls' main customers.

SUMITOMO CORP. and rolling stock manufacturer NIPPON SHARYO, LTD. have won a $35 million contract to build 19 passenger cars for the Caltrain commuter rail line, which serves the San Francisco Bay Area. Deliveries of the double-decker cars, which will be wheelchair accessible, will start in the fall of 1999 and continue through 2000. The new cars will be used to increase capacity on existing trains. The trader has headed consortiums that have supplied most of the cars bought by Caltrain since the mid- 1980s.

An exchange rate of ¥132=$1.00 was used in this report.
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