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No. 358, July 1999

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Japanese Companies in the US


One of the pioneering Japanese-owned plants in the United States is closing. MATSUSHITA ELECTRIC WORKS, LTD. has decided to end production at AROMAT CORP. and transfer output to Mexico, Japan or other existing factories. Opened in 1979, the San Jose, California firm currently makes signal relays at the rate of 1.5 million to 2 million units a month for sale to major U.S. communications manufacturers. MEW calculates that moving production to Mexico, where two of Aromat's five lines will be relocated, will slash labor costs to roughly one-sixth present levels. However, roughly 250 Californians will lose their jobs in the process.

Building on their year-old production agreement (see Japan-U.S. Business Report No. 346, July 1998, p. 4), NEC CORP. and KEMET ELECTRONICS CORP. have agreed to copromote their identical conductive polymer tantalum capacitors. Through these efforts, the Japanese industrial electronics giant, the world leader in polymer tantalum capacitors, and Greenville, South Carolina-headquartered KEMET, which ranks first in the manufacture of solid tantalum capacitors, believe that NeoCapacitors and KO Caps will find faster acceptance in applications currently served by certain types of aluminum capacitors and some high-capacitance ceramics. The partners also will continue working on next-generation technologies for polymer capacitors.

Last year's buyout of TOTAL CONTROL PRODUCTS, INC. by fellow industrial control systems manufacturer GE FANUC AUTOMATION NORTH AMERICA, INC. upended DIGITAL ELECTRONICS CORP.'s U.S. distribution arrangements (see Japan-U.S. Business Report No. 351, December 1998, p. 5). As planned, however, the Osaka maker of electronic control systems opened a subsidiary in Glendale Heights, Illinois to oversee marketing. PRO-FACE AMERICA, INC. already has contracted with Melrose Park, Illinois-based TCP to use its distribution channels. Charlottesville, Virginia's GE Fanuc also intends to sell the Digital Electronics line. Pro-face is forecasting sales of $12.4 million by the end of 1999.

Like a number of other Japanese manufacturers, IWASAKI ELECTRIC CO., LTD. has had to pump money into its unprofitable U.S. production unit. It put an extra $5 million into EYE LIGHTING INTERNATIONAL OF NORTH AMERICA INC., a Mentor, Ohio company that has made and marketed high-intensity lamps since 1991. The capital injection wiped out Eye Lighting's negative net worth and should enable it to borrow on more favorable terms.

Peachtree City, Georgia-headquartered MATSUSHITA COMMUNICATION INDUSTRIAL CORP. OF U.S.A. will begin manufacturing AM/FM tuners for automotive radios in August in addition to its current lines of vehicle audio products. This output will replace about one-third of the supply of AM/FM tuners from MATSUSHITA COMMUNICATION INDUSTRIAL CO., LTD.'s factory in Matsumoto, Nagano prefecture. The Georgia plant has room to add the slim, business card-sized tuners, which also can be used in DVD-equipped car navigation systems, because it ended production of cellular telephones in April 1998.

Bringing the closest thing to CD-quality sound and clarity to AM and FM radio listeners is the goal of a technology and marketing alliance between KENWOOD CORP. and USA DIGITAL RADIO, INC. The Columbia, Maryland digital broadcast technology company, which is owned by some of the biggest U.S. radio broadcasters, is pursuing so-called in-band, on-channel digital audio broadcasting technology. It and Kenwood, a leading maker of radio receivers, will work together to develop, test and promote IBOC DAB receivers, including designing coordinated strategies for the launch of the IBOC know-how and related Kenwood products.

The prospect that development and manufacturing partners MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., MATSUSHITA-KOTOBUKI ELECTRONICS INDUSTRIES, LTD. and QUANTUM CORP. held out this past spring of giving television viewers the ability to watch what they want, when they want should be a reality by the 1999 holiday selling season (see Japan-U.S. Business Report No. 355, April 1999, p. 5). PANASONIC CONSUMER ELECTRONICS CO. announced that it will market what it calls hard disk recorders with ReplayTV technology licensed from REPLAY NETWORKS, INC. of Mountain View, California. With a ReplayTV set-top box, the free Replay Network Service and an on-screen program guide, viewers can control real- time television just as if they were watching a recorded program because the program in progress is being recorded on a hard drive. MKE will manufacture the set-top boxes using Quantum-supplied hard drives.

An exchange rate of ¥121=$1.00 was used in this report. aaaaaa

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