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

No. 348, September 1998

Issue Index

Japanese Companies in the US


TRANSPORTATION EQUIPMENT

A FORD MOTOR CO. supplier is setting up shop in Bowling Green, Ohio. TOCHIGI FUJI INDUSTRIAL CO., LTD. has earmarked $18 million to build a plant scheduled for opening in May 1999. Before then, SUMITOMO CORP. will invest in TOCHIGI FUJI AMERICA MANUFACTURING INC., which will machine and assemble engine and powertrain components. The operation is forecasting sales of $35 million in FY 2002, by which time it hopes to be doing business with some Japanese transplants as well as with Ford. At home, NISSAN MOTOR CO., LTD. is Tochigi Fuji Industrial's main customer.

In another sign that Japanese automotive parts manufacturers are seeking business wherever they can find it, a HONDA MOTOR CO., LTD. supplier is building a plant in Austin, Indiana to produce body stampings for Subaru vehicles assembled at nearby SUBARU-ISUZU AUTOMOTIVE INC. Tokyo- based KIKUCHI CO., LTD. put up 60 percent of the capital for AUSTIN TRI- HAWK AUTOMOTIVE, INC., while TOA INDUSTRY CO., LTD. of Gunma prefecture, which generates most of its business from FUJI HEAVY INDUSTRIES, LTD., a part owner of SIA, has a 30 percent share in the new company. NISSHO IWAI CORP. owns the remaining 10 percent of Austin Tri- Hawk. Its $19 million plant is expected to be completed in April 1999. At start-up, the factory will operate at 60 percent of capacity. Over the medium term, Austin Tri-Hawk is looking for annual sales of $24 million.

By yearend, a $1.7 million expansion of FRANKLIN PRECISION INDUSTRY, INC.'s plant in Franklin, Kentucky should be completed. The wholly owned AISAN INDUSTRY CO., LTD. producer of throttle bodies and canisters expects to reach full operation of the additional capacity by mid-1999. At that time, it will be able to turn out 880,000 throttle bodies a year and 980,000 canisters for TOYOTA MOTOR CORP.'s North American operations and the Canadian joint venture between SUZUKI MOTOR CORP. and GENERAL MOTORS CORP. The expansion will boost employment to 350 people from 200-plus now. Franklin Precision Industry had sales of $31 million in 1997 and, for the first time since it opened in 1991, was in the black to the tune of $1.8 million. Revenues in 2000 are projected at $78.6 million.

Just months after completing one expansion, exterior plastic parts producer AEROQUIP INOAC CO. has embarked on another. The 10-year-old joint venture between INOAC CORP. (49 percent) and AEROQUIP CORP. (51 percent), which has developed into the leading U.S. supplier of blow- molded automotive spoilers, is spending $20 million to increase production at its primary Fremont, Ohio plant and at its blow-molding factory in Livingston, Tennessee. The expansion is expected to add 300 jobs and help the company raise sales 15 percent in 1999. Aeroquip Inoac also has a plant in Atlanta, which, like the Tennessee facility, was acquired last year from Aeroquip, a VICKERS, INC. company (see Japan-U.S. Business Report No. 336, September 1997, p. 8).

NIPPON SEIKI CO., LTD. is supplying head-up displays as a factory option for the 1999 Corvette from GENERAL MOTORS CORP.'s Chevrolet division. The Niigata prefecture manufacturer, which has made the instrument panel for the Corvette since the start of the 1997 model year, expects to ship 10,000 head-up displays a year.

After several years of market research, PIONEER ELECTRONIC CORP. will begin marketing car navigation systems in the United States early in 1999. The products use U.S.-developed map software. With sales in Germany and France expected to start around the same time, Japan's largest maker of car navigation systems hopes to see a combined total of 2,000 units a month sold. U.S. marketing will be centered in California, Florida and Washington.

Turning around its money-losing North American business is an objective that continues to elude MITSUBISHI MOTORS CORP. despite two big capital injections in recent years. In FY 1997, MITSUBISHI MOTORS MANUFACTURING OF AMERICA, INC. of Normal, Illinois and MMC's Cypress, California sales arm, MITSUBISHI MOTOR SALES OF AMERICA, INC., posted a combined loss of $48.3 million. The automotive maker's latest strategy for improving earnings is to merge the production and the sales units in the spring of 2000. MMC also is expanding its hiring of Americans for management positions at Mitsubishi Motors Manufacturing.

ALL NIPPON AIRWAYS CO., LTD. has contracted with BOEING CO. to convert one of its passenger 747-200 airplanes into a full-fledged freighter. Work on the ANA plane will begin in early 1999 at the aircraft maker's Wichita, Kansas Modification and Engineering Services unit. The conversion should be completed in about four months.

The Northern Indiana Commuter Transportation District, the operator of the South Shore Line along the southern rim of Lake Michigan, has awarded MITSUI & CO., LTD. a $17.2 million or so contract to supply electrical equipment for 56 rail cars that it has on order. The buy-American conditions attached to federally funded transportation projects require, however, that the parts be built in the United States. Therefore, the trader subcontracted the work to TOSHIBA CORP.'s Houston manufacturing subsidiary, a longtime producer of industrial motors. The contract covers such products as AC motors, controls and auxiliary power sources. Deliveries to the state-affiliated rail company will start in April 2001.

An exchange rate of ¥145=$1.00 was used in this report.
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