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No. 363, December 1999

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Japanese Companies in the US


TRANSPORTATION EQUIPMENT

Operations in Japan will bear the brunt of the restructuring plan that NISSAN MOTOR CO., LTD. announced in mid-October, but the number-two Japanese automotive maker's North American business will not be exempt from this cost-cutting, efficiency-boosting initiative. For starters, 1,000 jobs will be cut by April 2001, primarily by eliminating overlapping positions in NISSAN NORTH AMERICA, INC.'s various units. In fact, however, more than half of the reduction already has been completed, in part through attrition but mainly because Nissan outsourced all of its information technology activities in the United States and Canada to INTERNATIONAL BUSINESS MACHINES CORP. (see Japan-U.S. Business Report No. 362, November 1999, p. 3). The remaining cuts will come from Nissan North America's regional sales offices and financing unit as well as from among the roughly 1,200 white-collar workers at NISSAN MOTOR MANUFACTURING CORP. U.S.A. in Smyrna, Tennessee. The downsizing will not affect the 4,800 or so people who work on the factory floor making the Altima sedan, the Frontier pickup and the Xterra sport- utility vehicle. As part of the restructuring, though, Nissan Motor Manufacturing will cease to be a stand-alone company effective April 1, 2000, becoming instead part of Gardena, California-based Nissan North America.

TOYOTA MOTOR CORP. and GENERAL MOTORS CORP. have codeveloped an inductive charging system for electric vehicles that is based on the American partner's Magne-Charge inductive-charge technology. This breakthrough is the result of a June 1998 agreement. Unlike the conductive charging systems tried until now, this one has the advantages of being small and lightweight. Perhaps most importantly, it does not need to be installed in the electric vehicle. Toyota is using the new charging system in the electric- powered version of its RAV4 sport-utility vehicle, which just went on sale in Japan. Under a wide-ranging five-year arrangement announced last spring, Toyota and GM now are trying to prove technologies for vehicles powered by alternatives to gasoline (see Japan-U.S. Business Report No. 362, November 1999, p. 14).

With an order in hand from DAIMLERCHRYSLER AG for sintered camshafts for one of its light trucks, the Grand Haven, Michigan joint venture between NIPPON PISTON RING CO., LTD. (20 percent) and FEDERAL-MOGUL CORP. will double output of this component. Little additional money will have to be invested in equipment to reach this target. Starting in March 2000, the partners will have the capacity to make 100,000 sintered camshafts a month. The joint venture now known as FEDERAL-MOGUL ASSEMBLED CAMSHAFTS, INC. was formed in late 1996 when NPR tied up with the U.S. subsidiary of a British automotive parts manufacturer that later was acquired by Southfield, Michigan- headquartered Federal-Mogul.

Three-year-old F.T. PRECISION INC., a supplier of parts to HONDA MOTOR CO., LTD.'s engine factory in Anna, Ohio, is undergoing a $13.3 million expansion. The Fredericktown, Ohio joint venture between Honda and bearing manufacturer TANAKA PRECISION INDUSTRY CO., LTD. (65 percent) already has used part of this money to launch production of outboard retainers at the rate of nearly 1.1 million units a year. The rest will be used to start making a specialized roller bearing. Production of that component will begin in March 2000, heading toward an annual volume of almost 3.2 million units.

At a cost of roughly $9.5 million, TOKAI RIKA CO., LTD. will add a facility to make steering locks at its TAC MANUFACTURING, INC. subsidiary in Jackson, Michigan. Production is scheduled to begin in June 2001. The new plant will have the capacity to turn out 45,000 steering locks a month. These products, which will be made from lighter-weight magnesium rather than the traditional zinc, will be shipped to TOYOTA MOTOR CORP.'s Georgetown, Kentucky complex and to Fremont, California-based NEW UNITED MOTOR MANUFACTURING INC., Toyota's equally owned venture with GENERAL MOTORS CORP. In 2005, Tokai Rika projects, output of steering locks will total $23.8 million. In operation since 1992, TAC now makes steering wheels, airbag assemblies and shift levers.

TOYO RADIATOR CO., LTD.'s decision earlier this year to gamble $10 million on a plant to make radiators and oil coolers for cars and light trucks (see Japan-U.S. Business Report No. 355, April 1999, p. 11) even though it had no customers lined up has paid off. GENERAL MOTORS CORP. has awarded a contract to Toyo Radiator subsidiary COPAR INC. of Hopkinsville, Kentucky for radiators and oil coolers for some GM minivans. Shipments will start in the summer of 2000. The new Copar plant initially will have the annual capacity to build parts for 300,000 vehicles.

Going out ahead of its bigger domestic rivals, JAPAN AIR SYSTEM CO., LTD. awarded Pratt & Whitney Engine Services a 10-year, nearly $150 million contract to provide overhaul work and maintenance for its fleet of JT8D-200-powered MD-80 aircraft. The deal covers 63 Pratt & Whitney-built engines. All of the service will be performed at the UNITED TECHNOLOGIES CORP. company's Columbus Engine Center in Georgia, which is dedicated to the very large population of JT8D engines installed on commercial aircraft. The same team of people at the center will work on all the JAS engines. Pratt & Whitney also will assign staff to the number-three Japanese airline's base in Tokyo.

An exchange rate of ¥105=$1.00 was used in this report.aaaaa

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