Global Fastener News

1987 FIN – Japanese Contribute New Slant to U.S. Auto Parts Market

July 02
00:00 2015

September 25, 1987 FIN – The Industrial Fastener Institute, Cleveland, Ohio, will sponsor a seminar on Tuesday, October 13, 1987 in Columbus, Ohio at which representatives of domestic fastener products and services will describe to Japanese automakers (and their first and second-tier suppliers) the fastener manufacturing capabilities and product quality of U.S. companies.
As the Japanese gear up to their goal of producing about 2 million vehicles in North America by 1990 in their own plants and joint venture plants with GM and Chrysler, these domestic fastener companies are trying to get a piece of the market (e.g. supplying the Japanese auto plants) in which they’ve been pretty much a non-participant thus far.
The Japanese automakers along with their first and second tier suppliers may show up in droves, they could send some token representatives, or they could ignore this affair completely. Of these three scenarios, the last, paradoxically, could be most helpful to the domestic fastener makers. A light turnout would demonstrate conclusively that the Japanese have been lying when they claim 1) they are impartial in their choice of suppliers, Japanese or American, as long as the criteria of price, quality and delivery which they have established are satisfied and 2) that they are eager to increase the domestic content in their U.S. built vehicles. This would substantiate what a lot of domestic auto parts makers have been saying for some time and could be the basis for some remedial action against the Japanese automakers who have been the beneficiaries of sizeable financial and other incentives from local and state governments which have been suckered into giving these grants in the expectation that the Japanese were sincere in their promises to use local sourcing.
The Japanese are using more local sourcing – but that depends upon how you define “local” or “domestic”. What’s actually happening in most cases is that the Japanese are encouraging their traditional suppliers in Japan to set up operations in this country and continue to supply them as supposedly domestic companies. These U.S. operations have taken the form of companies set up by the auto parts makers themselves or the form of joint ventures with U.S. companies. By our reckoning about 200 Japanese auto parts makers have already taken either of these routes or plan to in the near future.
Following is a sampling and we stress the “sampling” of just what’s happening:
Tokico Ltd., a part of Los-Angeles-based Tokico America Inc., is setting up a new subsidiary in Kentucky to manufacture 30 to 35,000 shock absorbers monthly at a $5 million new plant on a 42 acre site in Berea, Kentucky to serve Ford Motor Co., which it now supplies from Japan and other U.S. based auto companies.
General Motors’ Delco Division, in a joint venture with Japan’s Akebono Brake Industry Co. has a new plant in Georgetown, Kentucky, which will supply the new Toyota plant now going up near Georgetown as well as other Japanese auto companies in the area.
Mazda Motor Corp. has announced it will invest $100 million to build a new stamping plant at Tacumsah, Michigan, near Detroit, in partnership with three of its Japanese suppliers (Miura Kyogo, in which it owns a 33% interest; Ondo Kaskusho, and Miura Kogyo) to supply Mazda’s new auto assembly plant now being constructed in Flat Rock, Michigan.
TRW Inc., Cleveland, Ohio and Japan’s Fuji Valve Co. Ltd. recently signed a letter of intent to form a joint venture company to produce engine valves and valve train components such as valves seat inserts, valve locks, valve retainer caps and valve lock adjusters primarily for Honda of America Mfg. Inc.’s auto assembly plant in Marysville, Ohio.
Lear Siegler Seating Corp., Livonia, Michigan and Japan’s NHK Spring Co. have established two joint ventures. General Seating of America U.S.A., and General Seating of Canada Ltd., which will manufacture 10,000 cars seats a month in Indiana to supply Subaru-Isuzu Automotive Inc. (a joint venture of Suzuki Motor Co., and Isuzu Motor Co., which is building a new assembly plant near Lafayette, Indiana and to supply 10,000 car seats a month) to the joint venture of GM and Suzuki Motors Co. at Ingersoll, Ontario.
Allied Signal Inc.’s Bendix Automotive Group has signed a joint venture with Japan’s Jidosh Kiki Co. Ltd. to produce 200,000 vacuum brake boosters at Bendix’s Chassis and Brake Components plant in Gallatin, Tennessee, mostly for Nissan Motor Manufacturing Co. Ltd’s plant in Smyrna, Tennessee, which assembles light trucks and Sentra passenger cars.
ITT Automotive Inc.’s Higbee group, Rochester, Michigan has set up a joint venture, Hisan Inc., with Japan’s Sanoh Industrial Ltd. to produce fuel and hydraulic lines for Honda, Mazda and Nissan cars at Hisan’s new facility in Findlay, Ohio.
Pneumo Abex Corp., Boston, Massachusetts, has signed an agreement with Japan’s Nisshin Spinning Co. for the manufacture of brake linings and disk pads for domestic and Japanese automakers in the U.S.
Rockwell International Corp., Troy, Michigan, and Japan’s Daikin Manufacturing Co. Ltd. of Japan have formed a joint venture to Rockwell Clutch Co. to produce medium and heavy duty truck clutches for the North American auto market at a yet undisclosed plant location.
Toyota Motor Corp. has announced plans to spend $19.5 million to expand its wholly owned British Columbia aluminum wheel plant from 45,000 to 95,000 sq ft and to double production to $480,000 wheels per year. The wheels are now being sent mostly to assembly plants in Japan but the increased output will allow Toyota to also supply its Canadian auto operations, New United Motor Mfg. Inc. (NUMMI), its joint venture with GM in Fremont, California, and its new auto assembly plant now being constructed in Kentucky. Toyota, one of the richest companies in the world, has been awarded contributions of about $9 million by various Canadian governmental and industrial development groups for the expansion of this auto parts plant.

To these you can add the Japanese auto parts maker plants in Mexico, especially in the border town Maquiladoras, where the Japanese are insulated from fluctuations in the dollar-yen exchange rate and where exports to the U.S. are counted as part of the Mexico-U.S. rather than Japanese-U.S. trade flow.
What you’re seeing in effect, is a concerted effort by the Japanese auto parts industry, which is 2 ½ times the size of the auto industry in Japan and employs 480,000 people to take over a large part of the $60 billion, one million employees of the U.S. auto parts industry – just as they have taken over a large part of the U.S. auto business.  ©1987/2015 Fastener Industry News.
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