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No. 361, October 1999

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Japanese Companies in the US


TRANSPORTATION EQUIPMENT

The future of SUMITOMO RUBBER INDUSTRIES, LTD., at least as a tire manufacturer, now is largely in the hands of GOODYEAR TIRE & RUBBER CO. On schedule, the two formed a wide- ranging global alliance under which the Akron, Ohio company took control of SRI's Dunlop tire operations in North America and Europe (see Japan-U.S. Business Report No. 354, March 1999, p. 11). Goodyear also will become the second-largest shareholder in Sumitomo Rubber with a 10 percent interest and a minority owner of two tire manufacturing companies in Japan. To equalize the value of the various transactions, Goodyear, once more the world's number-one tire producer, made a cash payment of $936 million to SRI.

With automotive makers using more aluminum in their cars and trucks, OGIHARA CORP. is spending some $35 million to enable its plant near Birmingham, Alabama to produce body panels and other stamped aluminum parts. The $100 million factory opened roughly two years ago to make all of the steel body panels for the Mercedes-Benz M-class sport-utility vehicle produced in nearby Vance, Alabama and, more recently, in Austria. It now employs about 320 people. Ogihara will install a $20 million tandem stamping press line that can stamp parts in both steel and aluminum. At least for now, the company's Howell, Michigan plant, which has been in business since 1987, will continue to turn out just steel stampings for its many customers. Ogihara had U.S. sales of $294 million in 1998.

A $46 million expansion is underway at AISIN AUTOMOTIVE CASTING, INC. in London, Kentucky. Operational since April 1998, the AISIN SEIKI CO., LTD. company now makes oil pumps and other cast aluminum engine parts as well as timing chain covers primarily for the North American operations of TOYOTA MOTOR CORP. The new capacity, scheduled to go onstream in July 2001, will be used to make transmission cases for TOYOTA MOTOR MANUFACTURING WEST VIRGINIA, INC. (see Japan-U.S. Business Report No. 360, September 1999, p. 10). The expansion will create between 120 and 130 jobs at Aisin Automotive Casting. It now employs more than 200 people.

DENSO MANUFACTURING TENNESSEE, INC. will add coils for electronically controlled ignition systems (which have no distributor) to the product line at its Athens factory in March 2001. The expansion will require an investment of $24 million. Capacity production of 350,000 units a month should be reached by mid-2001. All of the output initially will go to TOYOTA MOTOR CORP.'s North American operations. The start of direct ignition system coil production will generate another 50 jobs at the factory, which now has close to 450 people on its payroll. The expansion also is expected to double projected 1999 sales of $130 million. These are derived from the production of injectors and oxygen sensors. Denso Manufacturing Tennessee's main plant, opened in 1990, is located in Maryville. It employs more than 2,300 people to turn out starters, alternators and other electric and electronic parts as well as instruments gauges for Toyota, HONDA MOTOR CO., LTD.'s North American assembly plants and DAIMLERCHRYSLER AG. DMT, a DENSO CORP. company, predicts that the Maryville complex will have revenues of $1 billion in 1999.

Automotive speaker maker ONKYO AMERICA, INC. of Columbus, Indiana is buying TOP SOURCE AUTOMOTIVE, INC. from TOP SOURCE TECHNOLOGIES, INC. The Palm Beach Gardens, Florida company's product line includes the MotorCheck On-Site Analyzer, which it calls an oil analysis minilab in a box, and proprietary overhead sound systems. The ONKYO CORP. subsidiary is paying $8.5 million in cash in addition to the $500 million it spent in July to acquire a 4.9 percent stake in TSA, plus $1 million in convertible preferred Onkyo America stock.

The Plymouth, Michigan partnership between NOK CORP. and Germany's FREUDENBERG & CO. has won a $1 billion contract from FORD MOTOR CO. for a complete engine sealing system for 2 million vehicles a year starting in 2001. The first such contract awarded by the number-two U.S. automotive maker will run for eight to 10 years, giving a 10 percent or even larger boost to FREUDENBERG-NOK's annual sales. The turnkey engine sealing system, which includes roughly 80 parts, will be used in the new, four-cylinder-engine Ford Focus.

In another contract award, FORD MOTOR CO. named TOKICO, LTD. and its own Visteon Automotive Systems unit to supply a new type of suspension system for luxury vehicles set to debut in the 2002 model year. The system uses electronic control technology to dampen vibrations from the road surface. TOKICO (USA), INC. will assemble the main suspension system; Visteon, the world's second-largest automotive parts manufacturer, will provide the electronic controllers. Berea, Kentucky-based Tokico figures that the order will add approximately $925,900 to its monthly revenues once deliveries start in 2001. The contract is just the latest one that Tokico has received from the big U.S. vehicle builder (see Japan-U.S. Business Report No. 355, April 1999, p. 11).

Automatic dimming rearview mirrors made by GENTEX CORP. are standard equipment on the Toyota Avalon sedan assembled by TOYOTA MOTOR CORP.'s Georgetown, Kentucky plant. The Zeeland, Michigan company's Night Vision Safety mirror, which also is found on the Toyota Camry Solara coupe built in Canada, uses a combination of sensors and electronic circuity to detect glare from trailing vehicles and automatically darken the mirror to eliminate glare.

FUJITSU TEN LTD.'s Torrance, California marketing unit has released a mapless vehicle navigation system. The voice-interactive Eclipse Commander uses speech-recognition and interactive technologies from PRONOUNCED TECHNOLOGIES, LLC of Reseda, California that allow drivers to enter commands by voice. The system determines a route by asking the driver a series of brief questions. It then retrieves route information from NavTech-brand digital map CDs supplied by NAVIGATION TECHNOLOGIES CORP. of Rosemont, Illinois. Travel directions are both heard through the stereo system and displayed. The voice capabilities of the Eclipse Commander, which costs $300 without the CD player, can be used to dial cell phones, control vehicle electronics and operate a vehicle's audio system. Fujitsu Ten is projecting sales of 800 Eclipse Commanders a month.

Every seat aboard 17 of JAPAN AIRLINES CO., LTD.'s 747-400 and 747-300 aircraft will be equipped with an in-flight entertainment system from the Rockwell Collins unit of ROCKWELL INTERNATIONAL CORP. The Cedar Rapids, Iowa division's Total Entertainment System gives each passenger a screen and access to several channels of video programming that they can control. The contract could be expanded to 28 747s. JAL is the ninth major airline to select the Rockwell Collins system for in-flight entertainment on their wide-body planes.

An exchange rate of ¥108=$1.00 was used in this report.

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