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

No. 346, July 1998

Issue Index

Japanese Companies in the US


TRANSPORTATION EQUIPMENT

The costs and the technical challenges of meeting the automotive industry's technology requirements are behind two development tie-ups between TOYOTA MOTOR CORP. and GENERAL MOTORS CORP. First, they will collaborate on an inductive charging system for electric vehicles based on GM's Magne-Charge inductive charge technology. Unlike the conductive charging system used by Toyota and other manufacturers, which involves a direct, metal-to-metal plug connection between the power source and the vehicle, the GM method creates an electromagnetic connection. The Japanese company claims that the inductive system offers a trouble-free connection and weighs less than the conductive approach. In fact, it believes that the inductive charging system that results from its work with GM will be the world standard for electric vehicles. The two companies plan to refine GM's technology by incorporating a smaller charge "paddle" connector for both the power source and the vehicle's charge port.

The second strategic alliance between TOYOTA MOTOR CORP. and GENERAL MOTORS CORP. centers on fuel-cell technology for future electric vehicles. A fuel cell uses a chemical reaction between hydrogen and oxygen to generate electricity to power a generator, thereby eliminating or at least reducing the pollution created by conventional internal combustion engines. In the initial phase, Toyota and GM engineers will exchange information through four or five meetings a year. A group composed of MAZDA MOTOR CORP., FORD MOTOR CO., DAIMLER-BENZ AG and a Canadian company also is working on automotive-use fuel cells (see Japan-U.S. Business Report No. 344, May 1998, p. 9).

Twelve years after their equally owned company started to produce turbochargers, ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD. bought out BORG-WARNER CORP.'s share in Shelbyville, Illinois-based WARNER-ISHI CORP. for an undisclosed price. The deal also included the American company's share in their Italian turbocharger venture. Hoping to position itself as the world's second-biggest producer of turbochargers, IHI plans to double worldwide production to 1.5 million units in 2002, including 200,000 made in the United States.

Full-scale operations have been reached at UNIVANCE INC., the wholly owned Winchester, Kentucky subsidiary of FUJI UNIVANCE CORP. The plant's 120 or so workers are making all the automatic transmission parts that the parent sells in the United States, including side covers, clutch pistons and manual shafts for vehicles manufactured locally by HONDA MOTOR CO., LTD. and NISSAN MOTOR CO., LTD. They also build transmissions for an unnamed producer of forklifts. Univance projects sales of $15 million this year and $27 million in 1999.

Year-old ADA TECHNOLOGIES INC. forecasts a tenfold jump in revenues in FY 2000 from FY 1997's figure of $1.8 million. The wholly owned Columbus, Ohio subsidiary of ATSUMITECH CO., LTD., an affiliate of HONDA MOTOR CO., LTD., makes shift levers for the automatic transmissions of Accords assembled in nearby Marysville, Ohio. It also turns out automatic transmission control shafts for Accords and Civics.

The automotive division of U.S. TSUBAKI, INC. also expects strong sales growth in the medium term. In 2002, the manufacturer of timing chain drive systems, including chain, sprockets, tensioners and guides, predicts that it will make 3 million units versus 1.4 million units annually at present. The company just added FORD MOTOR CO. as a customer. It joins longtime buyers GENERAL MOTORS CORP. and NISSAN MOTOR CO., LTD. UST's automotive division also is trying to gain the timing chain business of other Japanese transplants in North America. Its goal is to win 30 percent of the U.S. timing chain market. Last year, the group moved to its own plant in Chicopee, Massachusetts. Previously, it had shared space in Holyoke, Massachusetts with UST's roller chain division. UST, which has five American plants, is a wholly owned subsidiary of TSUBAKIMOTO CHAIN CO., the world's top manufacturer of chain and power transmission components.

Since 1974, TOYOTA MOTOR CORP. has invested close to $700 million in TABC, INC., a Long Beach, California manufacturer of cargo beds for pickup trucks, body stampings, steering columns and catalytic converters. The latest outlay, amounting to $20 million, was used to boost catalytic substrate capacity to 2.7 million units a year from 1.5 million. TABC's products go to Toyota's North American assembly plants. Some of them also are exported to Japan.

With an order in hand from GENERAL MOTORS CORP. for switches for pickup trucks, NILES PARTS CO., LTD. is adding a second factory at the Winchester, Kentucky site of its WINTEK INC. subsidiary. The company expects to spend $2.5 million for the plant and $5 million on equipment. Operations are slated to begin at the start of 1999. The new facility should boost employment to between 120 and 130 people from 75 now. Wintek is projecting FY 2002 sales of $45 million, with 40 percent of that amount generated by GM. It also hopes to gain contracts from CHRYSLER CORP. and FORD MOTOR CO. The subsidiary's FY 1997 revenues were around $10 million.

Bigger orders from GENERAL MOTORS CORP. and CHRYSLER CORP. are behind a 40 percent capacity expansion now underway at A-MOLD CORP., a Mason, Ohio manufacturer of aluminum wheels. When the new machining and coating lines are installed, the eight-year-old UBE INDUSTRIES, LTD. subsidiary will be able to manufacture 1.4 million wheels a year. It uses a Ube-developed process called squeeze processing to produce a lightweight but strong wheel that can be chrome plated. A-Mold's 1997 sales were in the neighborhood of $100 million. This year, it expects to do between $140 million and $150 million worth of business.

Business also is booming for BRIDGESTONE/FIRESTONE, INC. To meet the strong demand for radial light truck tires, parent BRIDGESTONE CORP. will spend $80 million to expand capacity at its newest operating U.S. tire plant, a factory in Morrison, Tennessee. By the end of 1999, the facility will be able to make 7,500 tires a day, up 20 percent from current production. The expansion also will increase employment to 1,000 or so from 885 at present. Bridgestone is building a big radial car and light truck tire plant in Aiken County, South Carolina. Production there is scheduled to start in the spring of 1999 (see Japan-U.S. Business Report No. 335, August 1997, p. 7).

MITSUBISHI MOTORS MANUFACTURING OF AMERICA INC. of Normal, Illinois has awarded CHERRY CORP. a contract for all the fog-lamp and hazard-light switches and electric mirrors used in the Galant sedan built in the United States. Last year, MMMA turned out 42,820 Galants versus 57,013 in 1996. Waukegan, Illinois-based Cherry also does business with TOYOTA MOTOR CORP. and HONDA MOTOR CO., LTD. The company hopes the new deal will help it expand sales in Japan, where it operates an engineering center in Yokohama through a joint venture with connector manufacturer HIROSE ELECTRIC CO., LTD.

Automotive seating manufacturer TACHI-S CO., LTD. has opened a new North American headquarters in Farmington Hills, Michigan. The facility houses expanded design, engineering, prototype, testing and administrative offices. The company believes that one of its greatest strengths is the ability to do development work round- the-clock through TACHI-S ENGINEERING U.S.A. INC.'s new facility and its R&D center in Aichi prefecture. The U.S. subsidiary provides design, engineering, prototype and testing services for seating systems to OEMs and Tier 1 suppliers. The company also is a partner in three separate U.S. production ventures.

An exchange rate of ¥140=$1.00 was used in this report.
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