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No. 362, November 1999

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Japanese Companies in the US


TRANSPORTATION EQUIPMENT

The California Fuel Cell Partnership, established this past April, has its first Japanese member. HONDA MOTOR CO., LTD. joins DAIMLERCHRYSLER AG, FORD MOTOR CO., VOLKSWAGEN AG, three oil suppliers, a Canadian maker of fuel cells and the California Air Resources Board and the California Energy Commission. The group was formed to demonstrate the future potential of fuel-cell vehicles, identify issues concerning possible fuels and fueling technologies and to raise public awareness of this alternative to gasoline engines. Honda plans to have a fuel-cell vehicle ready by 2003. Both hydrogen-fueled and methanol-fueled prototypes are under development. In December, U.S. sales will start of the Honda Insight, the first gasoline-electric hybrid model available in this country.

Filling in details of their spring agreement to cooperate over five years on the development of vehicles powered by fuel cells and other replacements for gasoline (see Japan-U.S. Business Report No. 356, May 1999, p. 11), TOYOTA MOTOR CORP. and GENERAL MOTORS CORP. announced that 15 teams are at work in at least four different areas. Each company is developing its own four-wheel-drive hybrid system. The best technologies from each eventually will be combined into a single system. The collaboration also extends to creation of a smaller inductive charging coupler for electric vehicles, research on fuel-cell vehicles and standardization of the hydrogen supply system for fuel-cell vehicles. Toyota and GM disclosed at the same time that a June 1998 project to develop a compact charging system for electric vehicles was nearing completion.

With output of stamped and welded chassis and suspension parts nearing capacity at CALSONIC YOROZU CORP. because of increasing orders from GENERAL MOTORS CORP. and other customers, majority owner YOROZU CORP. has committed $9.4 million for new equipment at the big Morrison, Tennessee company. Most of the money will go for a hydroforming press that should be operational by the start of 2001. The press not only is designed for precision handling of complexly shaped parts but also offers several other advantages. For one, it reduces time in process by eliminating the need to weld together several smaller parts. The press is said as well to cut the weight of parts by 10 percent and to slash production costs by 20 percent to 30 percent. CYC, which opened in 1988, now can turn out 35,000 stamped parts a month.

Beginning in July 2000, ARVIN SANGO, INC. will make exhaust manifolds for vehicles assembled at TO-YOTA MOTOR CORP.'s Georgetown, Kentucky complex. This part currently is imported from Japan. SANGO CO., LTD. and ARVIN INDUSTRIES, INC., the equal owners of the Madison, Indiana maker of exhaust systems, will spend roughly $4.7 million to add production of manifolds. Output is projected at 12,500 units a month, which is not high enough to completely displace imports but a volume that could boost the joint venture's revenues by $11.3 million a year. Arvin Sango has been in business since 1988.

By 2003, a fourth production line for compressors for automotive air-conditioning systems will be operational at MICHIGAN AUTOMOTIVE COMPRESSOR, INC.'s factory in Parma, Michigan. TOYODA AUTOMATIC LOOM WORKS, LTD., the majority (60 percent) owner of the 10-year-old factory, sees this expansion as integral to its goal of boosting its share of the world vehicle AC compressor market to 40 percent or so from 30 percent at present. Michigan Automotive Compressor, in which DENSO CORP. has a 40 percent stake, currently makes 2.5 million compressors a year for such customers as GENERAL MOTORS CORP. and DAIMLERCHRYSLER AG. The installation of the fourth line will lift annual capacity to 3.5 million units.

The strategic alliance that VALEO S.A. and ZEXEL CORP. tentatively have agreed to form in the areas of automotive climate control and engine cooling is mainly designed to strengthen both firms' operations in Asia. However, under the memorandum of understanding, the big French automotive parts manufacturer will buy the Japanese supplier's climate control businesses in North America and Europe. Zexel operates two vehicle air-conditioning component plants in the United States. Its Grand Prairie, Texas factory, acquired in 1984, manufactures evaporators, condensers and tube assemblies, while a facility in Decatur, Illinois that opened in 1988 produces evaporators and compressors. Together with marketing and sales people in North America and Europe, these operations have 550 employees. Zexel's combined AC parts sales in the two regions are about $245 million a year. The agreement with Valeo could be finalized as soon as the beginning of 2000. It has the support of Zexel's majority owner, ROBERT BOSCH GMBH.

The Plumley Division of DANA CORP. is shipping seven low-emission fuel tank hoses to NISSAN MOTOR CO., LTD.'s Smyrna, Tennessee complex for the 2000 Altima sedan. The Paris, Tennessee-based supplier expects to sell 1.5 million hose components under the new contract.

Big bearing manufacturer NTN CORP. and the NTN TECHNICAL CENTER (U.S.A.), INC. in Ann Arbor, Michigan have developed a new type of four-wheel-drive system for the high-end sport-utility vehicles that are increasingly popular in the United States. The Lock-On-Demand transfer case clutch system sends power to the front wheels when speed sensors detect slippage in the vehicle's rear wheels. Compared with the viscous couplings and multiple plate friction clutches typically used today in full-time four-wheel-drive systems, NTN says that the LOD delivers better fuel economy and improved drivability and traction, even under the severest of conditions. NTN has not yet decided where the LOD, which consists of a two-way roller clutch and an electronic control unit that actuates the clutch when tire slippage is detected, will be manufactured, but one of its various U.S. bearing factories would seem to be an obvious candidate.

All the money that New York City's Metropolitan Transportation Authority is spending to upgrade the subway system has meant big business for subway car maker KAWASAKI HEAVY INDUSTRIES, LTD. and its Yonkers, New York assembly subsidiary (see Japan-U.S. Business Report No. 354, March 1999, p. 12). However, SUMITOMO HEAVY INDUSTRIES, LTD. also has benefited. For the second time in two years, it has won through SUMITOMO CORP. a contract to supply high-performance, noiseless wheels for MTA's subway cars. The latest order covers 15,000 wheels. Shipments of these parts will start at the end of 1999.

An exchange rate of ¥106=$1.00 was used in this report. aaaaa

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