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No. 359, August 1999

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Japanese Companies in the US


TRANSPORTATION EQUIPMENT

Although they compete at home in the production of automotive parts using powder metallurgy technology, NIPPON PISTON RING CO., LTD. and HITACHI POWDERED METALS CO., LTD. decided to cooperate in the United States on sintered-alloy valve seats. The major maker of piston rings and valve-train parts will provide its process and product technology to SINTERING TECHNOLOGIES, INC. of Greensburg, Indiana, a Hitachi Powdered Metals subsidiary that has made valve guides and other precision engine components since 1988. A new line for sintered valve seats is scheduled to open in May 2000. Cerritos, California-based NPR OF AMERICA, INC. will market the part. The output from Sintering Technologies presumably will replace some of the sintered valve seats that Nippon Piston Ring exports from Japan.

Three more automotive parts suppliers have reorganized their U.S. operations or plan to do so. TOYODA GOSEI CO., LTD., for instance, is transferring ownership of five North American businesses to TG NORTH AMERICA CORP., a Troy, Michigan holding company, in a move designed to improve efficiency, especially on the the marketing side, and to reduce taxes. Affected by the change are: TG MISSOURI CORP., which has made steering wheels, side molding and other plastic interior and exterior parts in Perryville, Missouri since 1987; TG KENTUCKY CORP. of Lebanon, Kentucky, a 1997 start-up that supplies the same general types of products; a Waterville, Quebec manufacturer of weather strip and similar trim parts; and TG TECHNICAL CENTER (U.S.A.) CORP., also located in Troy. CALIFORNIA AUTOMOTIVE SEALING INC. of Hayward, California will remain outside the holding company structure since Toyoda Gosei owns only 50 percent of this maker of weather strip and trim. Toyoda Gosei is projecting North American sales at $500 million this year and at $600 million in 2002.

For its part, tire valve manufacturer PACIFIC INDUSTRIAL CO., LTD. converted its Fairfield, Ohio subsidiary into a holding company. Under PACIFIC INDUSTRIES USA, INC. are PACIFIC INDUSTRIES AIR CONTROLS, INC., which is in charge of tire valve manufacturing and marketing, and PACIFIC MANUFACTURING OHIO, INC., which runs Pacific Industries' recently launched production of other small stamped automotive parts (see Japan-U.S. Business Report No. 354, March 1999, pp. 11-12), and provides engineering services, including parts design. Both of these companies are located in Fairfield. The Pacific Industries plant opened in 1989.

Before yearend, AISIN SEIKI CO., LTD. will realign its North American manufacturing operations to give its four American plants and two Mexican ones more discrete responsibilities. AISIN U.S.A. MANUFACTURING, INC. will specialize in body parts, specifically door frames and sunroofs, as will the pair of Mexican factories. The brake components made by Seymour, Indiana-based Aisin U.S.A. since it became operational in 1988 will be transferred to AISIN DRIVETRAIN, INC. of Crothersville, Indiana, which has made drivetrain components for the last two years. Engine parts will be shifted to AISIN AUTOMOTIVE CASTING, INC. This London, Kentucky company, operational since the spring of 1998, makes die-cast aluminum engine parts, especially water pumps. AISIN ELEC-TRONICS, INC. of Stockton, California, which started up in the summer of 1997, will continue to produce ECU (electrical control unit) sensors and other electronic parts. Much of Aisin Seiki's North American business, which totaled around $458.3 million in the year through March 1999 and are projected at $583.3 in FY 2005, is generated by TOYOTA MOTOR CORP. affiliates, although the company is pursuing other Japanese-affili-ated vehicle builders and the Big Three.

In an acquisition that bolstered its ability to provide a total transmission sealing package to automotive makers, FREUDENBERG-NOK, an NOK CORP. affiliate, bought FARNAM*MEILLOR for an undisclosed price. The Troy, Michigan company, which manufactures gaskets in Necedah, Wisconsin, will become part of Freudenberg-NOK's recently established Automotive Sector. This transaction occurred at almost the same time that the Plymouth, Michigan-headquartered firm signed an agreement with FORD MOTOR CO. to supply all seals for a future transmission.

In a recent contract award, NISSAN MOTOR CO., LTD. tapped DELPHI AUTOMOTIVE SYSTEMS CORP. to provide steering gears for all the trucks it builds in Smyrna, Tennessee, including the Xterra and the Frontier, starting with 2000 model year production. The world's largest parts manufacturer invested $15 million in tooling at a Saginaw, Michigan plant to supply the Nissan order for Steer-Lite gears. .....Starting next spring, the complete suspension of the Accords built by HONDA MOTOR CO., LTD. in Marysville, Ohio will be supplied by ERNIE GREEN INDUSTRIES, INC. That Marion, Ohio company will spend $18 million to build a plant to produce Accord axle shafts, struts, shocks and knuckles.

With the North American market for car navigation systems expected to take off early in the next decade, AISIN AW CO., LTD., one of Japan's larger makers of this equipment, could start U.S.-bound exports as soon as the end of 1999. The Nagoya company plans to supply the systems to the factories of both Japanese and American vehicle manufacturers as well as to retailers for aftermarket installation. Aisin AW has set its sights on winning 15 percent to 20 percent of the North American market for car navigation systems.

The advice that JAPAN MANAGEMENT ASSOCIATION CONSULTANTS INC. has provided to FORD MOTOR CO. dealerships in Europe since 1992 has proved so valuable that the two companies will formalize their relationship. They will establish a joint venture to provide consulting services to Ford operating units and to Ford dealerships in North America, Latin America, Europe and Southeast Asia. JMAC will have a 49 percent interest in JMAC AUTOMOTIVE DISTRIBUTION GROUP, which will start operations in Amsterdam by yearend and in Detroit by next March. Ford executives say that JMAC has helped the company's European dealers improve cost controls, delivery times and quality. For now, the joint venture will not cover Ford operations in Japan, South Korea or China since the Japanese management consultant already has a presence in these markets.

JAMCO CORP. will continue to be the exclusive supplier of lavatories for BOEING CO.'s 747, 767 and 777 passenger aircraft for five more years starting January 1, 2000. The contract, which could be worth as much as $250 million, extends a relationship that dates back to 1980. JAMCO, the world's biggest supplier of aircraft lavatories, has had a factory in Everett, Washington, near Boeing's assembly facilities, since 1982.

An exchange rate of ¥120=$1.00 was used in this report.aaaaaa

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