Japanese suppliers in US prepare for production due to increased demand by OEMs

Toyota Boshoku, NTN, FCC, Koito, TACHI-S, Toyota Auto Body and NIDEC

2011/08/29

Summary

 US sales of passenger cars and small trucks were up by 10% over the previous year to 11.559 million units in 2010. The US market showed a recovery from the sales slump in 2009 due to the financial crunch. US sales have stayed strong since the beginning of 2011 except Japanese OEMs such as Toyota and Honda which had sales decrease due to the Great East Japan Earthquake. The US had sales of 7.393 million units of passenger cars and light trucks in the January - July period of 2011, up by 9.2% on a year-over-year basis.

 In keeping with the increase in demand, OEMs including GM, Ford, Toyota and VW are energetically pressing ahead with opening new plants and investing in the US. Suppliers have come under pressure to respond to these trends.

 This Report will feature the increasingly active recent trends by Japanese suppliers in the US and Canada (the Report covers the trends for about 16 months up to early August 2011).



US: Toyota Auto Body and Toyota Boshoku to start production at new plants in autumn 2011

 In the US, Toyota will start production at the Mississippi Plant in autumn 2011, on which Toyota put brakes in 2008. Following this trend, Toyota Auto Body and Toyota Boshoku will start production at their Mississippi Plants around the same time, which these suppliers also suspended.

 In addition, Imasen is building a seat adjuster plant, Koito head lamp and mold plants, and NHK Spring a seat plant. Japanese suppliers are intensifying their activities in getting their production capacity ready for demand expansion in the US market.

Japanese suppliers build and reinforce their plants in the US

(The Report introduces movements for about 16 months up to early August 2011.)
Aisin AW to produce ATs for FF vehicles
 Aisin AW will produce ATs for medium-size FF vehicles at the US plant (AW North Carolina, Inc.) beginning in autumn 2011. Aisin AW spent around ten billion yen to increase its production lines. It plans to produce 240K ATs per year and supply them to Toyota's local plants. AW's plant already produces the ATs for large FR vehicles at an annual production scale of 240K units.
Aisin Chemical increases its production capacity of the Indiana Plant for damping and friction materials
 Aisin Chemical added a building specializing in damping coatings to its Indiana Plant (Aisin Chemical Indiana, LLC) to double production. Aisin Chemical has produced 760 tons of the coatings per month since spring 2011. It invested about 600 million yen in the new plant. The Indiana Plant also produces friction materials for ATs. Aisin Chemical added one more line to a total of three production lines for the friction materials in October 2010. The production volume was up by 1.5 times to 900 K sheets per months. Aisin Chemical spent 150 million yen to increase the production of friction materials.
Aichi Steel to implement a press machine to manufacture forged parts for underbodies and transmissions
 Aichi Steel will introduce a used 3000-ton press machine in its US subsidiary Aichi Forge USA, Inc. by the target year of 2012. Aichi will embark on producing forged parts for underbodies and transmissions, with plans to supply the parts to the local plants of Toyota's affiliate suppliers. Aichi Forge USA is producing crank shafts.
Imasen to build a new adjuster plant in Tennessee
 Imasen will spend about 20 million dollars to build a new seat adjuster plant in Tennessee (Imasen Bucyrus Technology Inc. Tennessee Plant). This is intended to accommodate an increase of production by Japanese OEMs in the US. The new plant will start running from the middle of 2011. Imasen plans to have sales of 50 million dollars in FY 2012. This will be the second production plant for Imasen in the US following the Ohio Plant. In addition, Imasen increased its stake in Imasen Bucyrus Technology Inc. by 15 million dollars to a capital stock of 29 million dollars to build the new plant.
 Imasen will increase local purchase of pressed parts for seat adjusters as well as supply from the Philippine Plant (Imasen Philippine Manufacturing Corporation). To address a high yen, Imasen will decrease the supply from Japan from 40% to 30% or lower by the end of 2012, according to the news report in July 2011.
NTN invests in a production line for hub bearings and constant velocity joints
 NTN resumed investments in its US production lines for hub bearings and constant velocity joints in 2010. This is the first investment in North America in about two years. NTN implemented new equipment in the Elgin Plant of American NTN Bearing Mfg. Corp in Illinois. It began commercial production of new hub bearings for Ford pickup trucks. It made an investment of about 1.09 billion yen. NTN also set up a production line for constant velocity joints at its Columbus Plant in Illinois. The investment was 1.21 billion yen.
NTN, Takao and Asahi Forge establish a venture for front-end manufacturing hub bearings
 Three of NTN, Takao and Asahi Forge established a joint venture NTA Precision Axle Corporation in Illinois of the US in December 2010, which is engaged in the front-end production of hub bearings. This is a movement in anticipation of an increasing demand from American OEMs. The total investment amounted to 84 million dollars. The joint venture started lathe turning and heat treatment in June 2011. It will begin forging from February 2012. NTA will supply the parts to neighboring assembly plants of NTN. NTN will double monthly production to one million hub bearings by 2013.
FCC plans to invest 5.06 billion yen in the US in FY2011, while setting up sales office in Detroit
 To cope with an increase in orders from Ford and others, FCC plans to invest 5.06 billion yen in its US plant which produces AT clutches (as of the announcement of the 2011 earnings forecast on June 15, 2011). The breakdowns of the investment are as follows: 1.98 billion yen to augment an FCC (Adams), LLC. plant in Indiana which produces parts for Ford, 1.64 billion yen to augment an FCC(North Carolina), LLC. plant, which produces parts for Honda and Ford, and 1.43 billion yen to reinforce the production for new models in FCC(Indiana) Mfg., LLC. which produces parts for Honda.
 FCC divulged on June 15, 2011 that it accepted orders for clutch parts and disc sets for transmissions from ZF and would supply these parts to the ZF's US plant (Transmissions Greenville, LLC. in South Carolina). Clutch parts and disks will be produced at FCC (Indiana) Mfg., LLC. and FCC(North Carolina), LLC., respectively.
 In addition, FCC set up a sales office in Detroit (FCC(North America) Detroit Office) in May 2011. It aims to accept orders from American OEMs, except Ford, and its suppliers. This sales office was newly established as the sales department of its local holding company FCC(North America), Inc.
Calsonic Kansei to produce EV inverters at its US plant
 Calsonic Kansei will begin to produce EV inverters for the Nissan Leaf at its US plant (Calsonic Kansei North America, Inc. in Tennessee) by 2012. Calsonic will invest about one billion yen in the plant to build an exclusive line for the inverters. Accompanying with the start of production of the Leaf at Nissan's Smyrna Plant in Tennessee starting in 2012, Calsonic will produce the parts locally to reduce costs.
Kasai Kogyo to deploy foam molding technology to North American Plants
 Kasai Kogyo will disseminate its new foam molding technology to its North American plants starting in 2011, which has been used only in its domestic plants. Foam-molded interior parts are lighter than the current plastic parts by 20 to 30%. Kasai already deploys the new production technology in its Japanese plants. The foam molding technology reduces costs because it eliminates the need for the coating process unlike the traditional production of foamed plastic parts. Kasai aims to expand sales by applying the manufacturing technology to its North American plants. Kasai's subsidiary M-TEK Inc. has production of interior parts at five plants in Tennessee and others.
Kinugawa Rubber to produce sealing parts for VW and Toyota at its US plant
 Kinugawa Rubber received an order for auto body sealing parts from VW and Toyota. The supplier will produce the parts at its US subsidiary TEPRO, Inc. in Tennessee from 2011. This is the first order from VW for the supplier. The sealing parts will be supplied to VW for the sedan Passat and the light SUV Tiguan, and to Toyota for the new North American model Camry to be launched in autumn 2011.
Koito to build headlamp and mold plants
 Koito will build headlamp and mold plants in the US, aiming to start operations in spring 2012. Koito will invest about 2.0 billion yen in the Alabama Plant (North American Lighting, Inc. (NAL) to build a new headlamp plant. The new plant will begin with an annual production of 500 K units. Koito will increase the capacity to the one million unit-scale in the end as orders are increased. The supplier intends to respond to increasing production by Japanese OEMs and others in the Southern States.
 In addition, Koito will invest about 2 billion yen in Kentucky to build a new mold plant. NAL self-manufactures molds at around 10%. It will increase the self-manufacturing to around 25% by 2013. NAL has three plants in Illinois and one in Alabama. Koito will reduce costs including logistic expenses by building a mold plant in Kentucky between these two states.
Sekisui Plastics to reinforce equipment for foamed plastics production, and build foam molding plant
 Sekisui Plastics announced in May 2011 to reinforce the production equipment for polystyrene / polyolefin hybrid resin foam PIOCELAN, and to build a new foam molding plant. Sekisui Plastics has contracted out the foam molding to a US affiliate company. The supplier will produce molded products as per the requests from Japanese OEMs. Sekisui Plastics will establish a single straight system from production of the PIOCELAN to distribution of molded products. The product is used for bumpers and seats as a core material.
 More specifically, Sekisui Plastics will reinforce the manufacturing equipment for foamed plastics in the existing plant of Sekisui Plastics U.S.A., Inc. (Tennessee) to increase the current annual production capacity from 720 tons to slightly under 2000 tons. It will invest one million dollars in the plant. The construction is supposed to be complete in July 2011. The new foam molding plant stands in the adjacent site to the aforementioned existing plant at a cost of 2.885 million dollars. This plant was complete in May 2011 as planned. Sekisui Plastics implemented four large foam molding machines there, which are capable of producing a total of 600 tons per year. It plans to secure an affordable space to accommodate 24 foam molding machines at most.
Daicel Chemical to double production of airbag inflators
 Daicel Chemical will reinforce Daicel Safety Systems America, LLC in Kentucky to increase the production capacity of airbag inflators (gas generators) by two fold as compared to the current capacity by FY2013, according to the news report in April 2011. This is part of the plan to increase its annual global production volume to 70 million inflators (the 2010 record was 43 million units).
Daido Metal considers re-expansion to North America and setting up local headquarters
 Daido Metal in May 2011 announced that it began to study the feasibility of establishing a production subsidiary for engine shaft bearings in North America, from which Daido Metal had withdrawn before. It attempts to respond to demand expansion in the North American region. Daido Metal is considering the possible location of the subsidiary in either the US, Canada or Mexico; the details remain undecided. The supplier says that it will build a new plant in two to three years. Daido Metal decided in 2009 to dissolve and liquidate Daido Metal Bellefontaine L .L .C. in Ohio, which produced and distributed engine shaft bearings. Since the dissolution in September 2010, Daido Metal has exported the products from Japan.
 Daido Metal is planning to include establishing local headquarters in North America, Europe, Asia and China in the next medium term plan from 2013 to 2018, according to the news report in August 2011. Daido Metal will organize research functions in its North American, Asian and Chinese headquarters to realize a full-scale local production system in each area (it is already in place in the U.K.).
Taiho Kogyo plans to double engine bearing shaft production capacity by 2015
 Taiho Kogyo plans to double the engine shaft bearings production capacity of its US plant (Taiho Corporation of America in Ohio) to three million units per month by 2015 (as of December 2010). Taiho Kogyo aims to increase business with Japanese OEMs except its existing customer Toyota, because its competitor Daido Metal dissolved its locally-incorporated company in September 2010 (Daido Metal announced in May 2011 to consider establishing a production subsidiary for engine shaft bearings in North America. For more details, see the above).
Diamond Electric to increase production of ignition coils by 50%
 Diamond Electric will increase production of ignition coils at the West Virginia Plant of Diamond Electric Mfg. Corp. in the US. It will invest about 830 million yen to build a new line to increase the annual production capacity to 15 million units. It plans to start commercial production in 2012. The supplier will receive orders from Ford and produce the ignition coils locally, which are currently exported from the Tottori Plant in Japan to the US.
Tsubakimoto Chain to increase production for Hyundai in the US
 Tsubakimoto Chain received orders for engine timing chain drive systems from Hyundai according to the news report in July 2010. In the US, the Japanese company supplies the products from its local production base, Chicopee Plant in Massachusetts to the Korean OEM's Alabama plant. Tsubakimoto will set up new lines in the vacant space. It is attempting to complete the construction within FY2011.
T. RAD to increase production of EGR coolers by 75%
 T. RAD will increase production of EGR coolers for diesel engines by 75% following the recovery of the North American pickup truck markets. It will invest around 200 million yen in T. RAD North America, Inc., in Kentucky to increase the annual production of EGR coolers from 200K units to 350K units by 2015
Toshiba to build its first overseas onboard motor plant in the US
 Toshiba will set up its first overseas onboard motor plant in Toshiba International Corporation (Texas), and start production from January 2012. Following the conclusion of the supply contract between Toshiba and Ford with respect to the parts for HEV/PHEV, which Ford will commercially produce from 2012, Toshiba will reinforce the supply structure for the US markets. It will also supply onboard inverters to Ford, which will be produced at the Mie Plant in Japan.
Topre to invest 6.5 billion yen in the US plant to reinforce the facilities
 Topre announced in July 2011 to invest 6.5 billion yen in the US Plant (Topre America Corporation in Alabama) which produces pressed parts and molds, and build out the plant. The expansion of the plant will be 13,000 square meters to introduce 2500-ton presses, which will start running in September 2012. Reportedly, it will implement the die-quench method on the part of the new production line. The die-quench method enables the production of high-strength pressed parts, and allows the supplier to meet the needs for lighter and stronger auto bodies. In Japan, Topre has implemented the test line for the die-quench method in the Sagami Plant.
Toyota Auto Body's new Mississippi parts plant to go live in autumn 2011
 Toyota Auto Body will start the operation of the new Mississippi parts plant (Auto Parts Manufacturing Mississippi Inc.) in autumn 2011 to produce pressed parts, welded parts and plastics parts. This will be the first plant for Toyota Auto Body in the US. It will supply the products for the Corolla which is produced by Toyota at the Mississippi Plant.
 When Toyota Auto Body announced the construction of the new plant in July 2007, the supplier planned to produce the parts for the SUV Highlander starting in 2010. As the production model was changed, some minor changes will be needed on molds and tools. Fortunately, there is no need for the supplier to change the general-purpose equipment, the investment of 2.2 billion yen and the number of employees-about 260-as planned before.
Toyota Boshoku to start operations at new Mississippi Plant in autumn 2011
 Toyota Boshoku will start operations at the new Mississippi Plant of Toyota Boshoku Mississippi, LLC. in autumn 2011. Toyota Boshoku will produce seats and door trims for the Corolla which Toyota produces at the Mississippi Plant. The annual production will be 150K units on a regular work hour basis.
 When Toyota Boshoku announced in September 2007 the construction of a new plant, the production would have started by 2010. The products to be supplied were changed from those for the Toyota SUV Highlander with three-row seats to the Corolla with two-row seats. Consequently, Toyota Boshoku had to reduce the planned number of employees from 500 to 250, and also the capital from 53 million dollars to 49 million dollars.
Nisshinbo Brake to increase production of brake pads
 Nisshinbo Brake will begin to increase the production of brake pads at its US Plant (NAMI - Nisshinbo Automotive Manufacturing, Inc. in Georgia) within 2011. It will invest about 600 million yen to implement processing equipment to increase the production by around 10%. Nisshinbo Brake will, thereby, respond to demand expansion in the US market, including orders from the Detroit Three.
Nittan Valve introduces the automatic production line at the US plant
 Nittan Valve implemented an automatic production line (NGV line) at its US plant of U.S. Engine Valve (Partnership) in South Carolina (which is in place as of March 2011). The NGV line automatically cuts the materials of engine valves, forges, finishes and inspects the products. This line needs half of the space and the number of operators compared to the existing line. The supplier is attempting to cut costs by 20% compared with the existing line. In Japan, Nittan Valve has implemented the NGV line at the Sanyo Plant in Yamaguchi Prefecture.
NHK Spring builds a new seat plant and drive motor parts plant
 NHK Spring built the second seat factory, Murfreesboro Plant (NSA - NHK Seating of America, Inc.) in Tennessee. It is complete as of July 2011. NHK Spring spent about 31 million dollars. The supplier will reinforce the supply capacity for Nissan, attempting to boost NSA's sales by around 1.5 times by 2012. The existing US seat plant in Frankfort, Michigan, produces seats and seat parts mostly for Toyota and FHI.
 In addition, NHK Spring will build a new drive motor core plant on the premises of NHK of America Suspension Components Inc. in Kentucky, which produces coil springs (as announced in December 2010). It will invest about 37 million dollars in the plant, which is the first production plant in its drive motor core business. Anticipating expansion of EV/HEV markets in North America, NHK Spring will expand production. The plant will start production within FY2011.
Nifco to have local production of fuel tank valves
 Nifco plans to commercially produce fuel tank valves locally at its US subsidiary, Nifco America Corporation in Ohio after 2011. Nifco has had pilot production since summer 2010. Nifco has produced fuel tank valves mainly in Japan, because each OEM sets strict quality standards on them. Additionally, Nifco invested about 550 million yen in Nifco America to set up fuel system equipment and forming equipment in the year ended in March 2011.
Hayashi Telempu to run new Alabama Plant in autumn 2011 and have R&D center in Michigan
 Hayashi Telempu will run the new plant (Alabama Plant of AMTEX Inc.) in autumn 2011 to produce interior parts such as floor carpets in the State of Alabama. Hayashi Telempu will supply the products to the Toyota Mississippi Plant which will go live this autumn as well. The site area is 56,000 square meters and the building area is 4,800 square meters. Hayashi Telempu obtained a larger plant site, eyeing future expansion of the plant if it receives orders from the other OEMs.
 Hayashi Telempu set out an R&D center for interior parts (Hayashi of America Detroit Develop Center) in Michigan in September 2010. The R&D center will start with ten employees, and the number will be increased gradually. The supplier will consolidate the designing center in Michigan and its designing and testing functions dispersed in the plants around the country to establish a locally-integrated structure from designing through to evaluation.
Hitachi Cable to supply power harnesses to GM, to be commercially produced at its US plant
 Hitachi Cable will supply power harnesses to connect drive motors, batteries and inverters for GM's PHEV Volt according to a news report in May 2010. The supplier expects to commercially produce the products at its US plant (Hitachi Cable Automotive Products USA, Inc. in Indiana).
Bridgestone to increase production of tires for passenger cars and light trucks by 20%
 Bridgestone in July 2011 announced the investment of 135 million dollars in the South Carolina Aiken Plant in the US to increase production of tires for passenger cars and light trucks by 20%. It will increase the daily production capacity from 25,200 tires as of July 2011 to 30,000 tires. The tire supplier will start building a new plant building with 81,000 square meters within 2011. It plans to begin operating the plant from the first quarter of 2013.
Press Kogyo produces panel parts for Nissan LCVs at its Mississippi Plant
 Press Kogyo received new orders for panel parts for LCVs, which Nissan produces and sells in the US. The supplier has produced the panel parts at its Mississippi Plant under PK U.S.A., Inc. and has supplied them to Nissan since September 2010. Press Kogyo expects to have annual sales of 600 million yen in this business. In addition, Press Kogyo began production of compact components for the Toyota Highlander at its Indiana Plant under PK U.S.A., Inc., according to the news report in June 2010.
Honda Elesys reinforced electric control unit line
 Honda Elesys reinforced the production line for electric control units in its US subsidiary Elesys North America inc. in Georgia in 2010. Seeing that demand for electric power steering (EPS) will grow in overseas markets due to its feature to improve fuel economy, Honda Elesys is improving its overseas capabilities of supplying electric control units for the EPS.
Mitsui Chemicals to increase production of polypropylene in North America
 Mitsui Chemicals and Prime Polymer (in which Mitsui Chemical takes a 65% stake) announced in July 2011 to increase production of polypropylene auto materials in the US and Mexico. Mitsui Chemicals will add production lines to Advanced Composites Inc. which has the plants in Ohio and Tennessee, to boost the annual production capacity from 212K tons to 226K tons. The lines will begin running in the first quarter of 2012.
MHI to resume production of compressors in autumn 2011
 MHI will resume production of compressors at Mitsubishi Heavy Industries Climate Control Inc. (MCC) in Indiana from autumn 2011. The company stopped its production in July 2009, but will resume it due to acceptance of a major order.
 In addition, MHI has a separate plan for capital investment in MCC to produce electric compressors, which have been made mainly in Japan, for EVs and HEVs (details are unknown). MHI plans to increase company-wide annual sales of electric compressors by about 30 times more than the 2009 level to 1.3 million units by FY2018.
Unipres considering branch plant for US Honda
 Unipres, an affiliate of Nissan, plans to expand sales for Honda. It sold products to Honda worth about 2.9 billion yen (around 1.3% of total sales) in FY 2010, of which sales of about 1.2 billion yen came from the business with US Honda. Unipres plans to expand business with Honda to 4.8 billion yen by FY2013, of which 1.8 billion yen will be from the business with US Honda. For this purpose, Unipres is considering three places to build a branch plant near Honda Plants in North America. The supplier intends to assemble auto body frames there by transporting the necessary parts from its local plants (according to a news report in July 2011).
Yuhara Manufacturing to expand production capacity of fuel injection parts by 25%
 Yuhara Manufacturing will expand the monthly production capacity of its US Plant, Yuhara Manufacturing USA Inc. in Georgia for fuel injection-related parts by 25% to 500K units. It invested about 45 million yen and implemented the facilities in April 2011.
Yokohama Rubber to increase annual production in the US by 10% to 6.2 million passenger car tires
 Yokohama Rubber will reinforce its US production capabilities by 10% to 6.2 million passenger car tires. The tire supplier will invest 13 million dollars in the Salem Plant of its local subsidiary Yokohama Tire Corporation in Virginia to increase the annual production capacity by the end of 2011. Yokohama Rubber is attempting to solve the production bottleneck to catch up with strong tire sales in North America.

Source: PR materials of the above companies, and news reports

 



Streamlining US business structures: Japanese suppliers continue to consolidate or dissolve local subsidiaries

 Chuo Spring dissolved its local subsidiary which produced coil springs, following the closure of its customer NUMMI, a joint venture of Toyota and GM. NGK Spark Plug consolidated its local super plug plants.

 Toyota Boshoku, NPR, Hitachi, Hitachi Cable and Fujitsu Ten consolidated their local subsidiaries respectively to streamline their control systems.

US: Japanese auto parts suppliers streamline business structures by centralizing and transferring production

(The Report introduces movements for about 16 months up to early August 2011.)
Akebono Brake to reduce suppliers by one third in North America
 Akebono Brake will reduce the number of its vendors by one third from 2011 to 2012, which has increased since it acquired some of the Bosch North American businesses at the end of 2009. The businesses bought-out are foundation brakes, disc rotors, brake drums and corner module businesses. Akebono Brake already entered into some of these businesses, and eventually the number of vendors has been doubled since the buy-out. Akebono will screen the vendors to reduce costs by increasing the number of orders per vendor.
 In the FY2011 North American business forecast, Akebono Brake expects to have sales of 98 billion yen and an operating deficit of 4 billion yen. Akebono aims for sales of 105 billion yen and an operating profit of 2.5 billion yen in North America in FY 2013. Its US corporation will take a central role in the activities to receive orders from European OEMs by maximizing the strengths of the old Bosch.
Ichikoh and Mitsuba vote to dissolve US joint venture
 Ichikoh and Mitsuba voted to dissolve their US joint venture Ichikoh Mitsuba, Inc. on May 21, 2010. The joint venture was established in 2006 based on Ichikoh's wholly-owned subsidiary, in which Ichikoh took a 75% stake and Mitsuba 25%. The joint venture produced and distributed mirrors and small lamps, while its business stayed low (2008 sales were 30.35 million dollars and the operating loss was 2.31 million dollars). The dissolution was planned in October 2010. Nevertheless, Ichikoh Mitsuba, Inc. is not dissolved as of July 2011 but wholly owned by Ichikoh.
 On May 31, 2010, Ichikoh announced that it would agree to have a global partnership with Spanish supplier Ficosa International, S.A. in the mirror business. Ficosa will succeed Ichikoh's mirror production/sales business in North America, and incorporate it into Ficosa's plants.
Chuo Spring to dissolve its US subsidiary following closure of NUMMI
 According to the announcement in February 2011, Chuo Spring will liquidate Central Spring, Inc. (California) in February 2012, which produces coil springs in the US. Chuo Spring supplied coil springs to NUMMI, a joint venture of Toyota and GM in California. As NUMMI ceased operations in March 2010, it became difficult to continue operations. Central Spring Inc. (California) had sales of 17.09 million dollars and an operating profit of 350K dollars in 2009. Chuo Spring posted an extraordinary loss of 760 million yen in the consolidated business results in the third quarter of the year ended in March 2011.
Toyota Boshoku consolidates two production companies in Indiana
 Toyota Boshoku amalgamated its US subsidiaries, Toyota Boshoku Indiana, LLC. (TBIN) and Total Interior Systems-America, LLC. (TISA), on July 1, 2010. The surviving company is TBIN. Toyota Boshoku intends to integrate the control departments and to streamline production plants by the consolidation of TISA, which produces seats and door trims supplied to the Toyota Indiana Plant, to TBIN which produces seat functional parts supplied to TISA.
 Toyota Boshoku's North American and Latin American businesses posted their third consecutive red ink results in FY 2010. Toyota Boshoku has implemented the "Profit Structure Reformation approaches Project for North and Latin Americas Businesses" since FY 2010, aiming profitability in FY2011.
Toyo Tire & Rubber waives claim of 35.8 million dollars to subsidiary
 Toyo Tire & Rubber waived a claim of 35.8 million dollars to its wholly-owned subsidiary Toyo Automotive Parts (USA), Inc. in March 2010. This was intended to solve the excessive liability issue of Toyo Automotive Parts (USA), and resuscitate its business. The subsidiary in Kentucky produces and distributes automotive anti-vibration rubber. The capital is 29 million dollars.
NGK Spark Plug to consolidate spark plug plants in US
 NGK Spark Plug finished consolidation of its two sparkplug plants in the US till May 2010. It transferred the spark plug production equipment from the Irvine Plant of its subsidiary NGK Spark Plugs (U.S.A.), Inc. in California to the West Virginia Plant. NGK Spark Plug will maximize the Irvine Plant as a logistics center.
NPR to consolidate its four US subsidiaries
 NPR's US business holding company, NPR US Holdings, Inc. merged and absorbed their subsidiaries in January 2011. The subsidiary changed the company name to NPR of America, Inc. The merged companies are three: a distributor NPR of America, LLC, NPR Manufacturing Kentucky, LLC which produces piston rings, and NPR Manufacturing Michigan, LLC which produces valve sheets.
Hitachi to consolidate three US auto instruments subsidiaries
 In January 2011, Hitachi's US subsidiary Hitachi Automotive Products (USA), Inc. merged and integrated its two subsidiaries of Unisia of Georgia Corporation and TOKICO (USA) Inc. At the same time, the Hitachi's US subsidiary changed the company name to Hitachi Automotive Systems Americas, Inc. Hitachi had advanced the consolidation of these three companies in a step-by-step approach since 2006 to streamline the auto instruments business by region. Hitachi will get ready for expanding demand in the Latin American markets as well as the US market.
Hitachi Cable to consolidate its two US subsidiaries engaged in parts production/distribution
 In January 2011, Hitachi Cable consolidated its two US subsidiaries of Hitachi Cable Indiana, Inc. as a surviving company and Hitachi Cable Florida, Inc., which produce and distribute auto brake hoses and parts. At the same time, Hitachi Cable changed the name of the surviving company to Hitachi Cable Automotive Products USA, Inc. This is part of the restructuring of its North American auto business. Hitachi Cable attempts to integrate production and distribution companies to one each in the US and Mexico. Hitachi Cable expects to have sales of 138 million dollars in FY 2011 after the merger (based on a 15-month accounting period due to the change of the period).
Fujitsu Ten to consolidate its distribution and R&D subsidiaries
 Fujitsu Ten consolidated its US distribution subsidiary Fujitsu Ten Corp. of America in California (the surviving company) and its R&D subsidiary Fujitsu Ten Technical Center, USA, Inc.(Michigan) in April 2010. Both were Fujitsu Ten's wholly-owned subsidiaries. This consolidation was intended to reinforce marketing/product planning functions in the Americas to expand supplies business with dealers as well as businesses with OEMs.

 



Alliances and other activities in US: TACHI-S and Johnson Controls sign capital and business alliance, while NIDEC buys out Emerson's motor business

 Japanese suppliers are deepening partnerships with US suppliers to accommodate the globalization of OEMs. TACHI-S signed the capital and business alliance agreement with Johnson Controls; Nishikawa Rubber and Cooper Standard deepened their partnership; JTEKT advanced consolidation of divisions of Timken which JTEKT bought out; and Nittan Valve will promote joint procurement with Eaton, its largest shareholder.

 On the other hand, NIDEC bought out the motor division of Emerson; and Furukawa Electric wholly owned the joint venture with Lear Corporation.

US: Alliances and other activities of Japanese suppliers

(The Report introduces movements for about 16 months up to early August 2011.)
Sanoh Industrial to buy out US Copper-Standard's plant to locally produce tube parts
 Sanoh Industrial bought out the Archbold Plant of the US supplier Cooper-Standard Automotive in Ohio for about four million dollars in March 2010. Sanoh Industrial has had production of brake tubes and fuel tubes at the plant as its wholly-owned US subsidiary Sanoh America, Inc.'s plant. Whereas Sanoh exported tubes from the Furukawa Plant in Japan to the US, the Archbold Plant enables the Japanese supplier to do start-to-finish production of tube parts. The Archbold Plant has a monthly production capacity of four million meters of brake tubes. The plant plans to supply the products to local companies in Canada, Mexico and Brazil.
JTEKT is in process consolidation of former Timken Division
 JTEKT has been in process of incorporating the US Timken Needle Roller Bearing Division which JTEKT bought out in December 2009. Since the buy-out, JTEKT integrated JTEKT's sales division and the old Timken sales team in January 2011, both of which used to take sales activities independently. JTEKT will expand product lineups to increase businesses with European and US OEMs. In addition, the Japanese supplier will transfer JTEKT employees to plants of the former Timken including five in North America, six in Europe and one in China to improve their production methods and reduce purchasing costs. JTEKT aims to expand the needle roller bearing business from about 50 billion yen in 2010 (according to a forecast in November FY2010) to about 70 billion yen in 2015 on a sales basis.
Central Glass buys out the Nashville Glass Plant of US Zeledyne
 Central Glass bought out US Supplier Zeledyne's Nashville Glass Plant in Tennessee and its distribution business of repair glass under the Carlite brand (Ford brand) in April 2011 (the price for the buy-out is undisclosed). Central Glass founded Carlex Glass America, LLC in Tennessee (capitalized at 36 million dollars) to the buy-out. The Nashville Plant has an annual production capacity of 2.5 million sheets of windshield. Central Glass unveiled an investment plan of a hundred million dollars in the plant to set out a new windshield production line in June of the same year. This buy-out enables Central Glass to have locally-integrated production from producing sheet glass to bending work.
 Zeledyne (Michigan) was established in 2008. The predecessor of Zeledyne was Ford's glass production division. Zeledyne stated that it would withdraw from the glass business in January 2010.
Takata to build one more crash test facility
 Takata invested 14.6 million dollars in its US subsidiary TK Holdings Inc. (Michigan) to build one more crash test facility. It will be complete in the middle of 2011. The test facility is designed to evaluate the impact on safety equipment and parts in frontal and side crashes. Takata intends to lend the test facility to other companies.
TACHI-S and US Johnson Controls sign capital and business alliance deal
 TACHI-S unveiled in April 2010 that the supplier and US Johnson Controls (JCI) were going to sign a capital and business alliance deal. Both companies, which produce seats, have cooperated in North America and China since the 1980's. TACHI-S will accept a capital subscription by JCI to strengthen the alliance and accommodate it to a globalization by OEMs. More specifically, they will promote the consolidation of sales and R&D contacts, and mutual use of purchase functions and production facilities.
 As for the capital alliance, TACHI-S assigned its 5.14% issued stocks owned by TACHI-S to the Japan-incorporated company of JCI for 1.76 billion yen in May 2010. As a result, JCI has become the largest shareholder of TACHI-S. TACHI-S will allocate part of the obtained capital to TACHI-S Technology & Monozukuri Center, a technological R&D center under construction in Japan (to be complete in March 2012).
Nishikawa Rubber strengthen ties with US Cooper Standard Automotive Inc.
 Nishikawa Rubber, in March 2011, announced the strengthening of existing ties with US Cooper Standard Automotive Inc. (CSA) in the automotive rubber sealing products business. Specifically, (1) Nishikawa Rubber will increase its stake in the US 50-50 venture Nishikawa Standard Company LLC (Indiana) by 10% worth 16 million dollars to 60% vs. 40% between Nishikawa Rubber and CSA, and the joint venture was renamed to Nishikawa Cooper LLC.; (2) Nishikawa Rubber will assign its equity share by 20% of a 97.7% stake (on an issued-stock basis) in its Thailand subsidiary Nishikawa Tachaplalert Rubber Co., Ltd. to CSA for 10.50 million dollars, while Nishikawa rubber will change the subsidiary's name to Nishikawa Tachaplalert Cooper Ltd. at the same time; (3) Nishikawa Rubber will take a stake in CSA's Polish corporate Cooper Standard Automotive Poska Sp. Z.O.O.; and (4) Nishikawa Rubber and CSA will revise the controlling share in the Mexican joint venture CSA Cooper Standard Automotive Sealing de Mexico S.A. de C.V., in which Nishikawa Rubber has a 20% stake as of today. The above items (3) and (4) are as of August 2011, but details remain undecided.
Nittan Valve and its largest shareholder US Eaton to collaborate in procurement
 Nittan Valve will start collaborative procurement with its largest US shareholder Eaton (27.2%) beginning in 2012. The main purchase targets are heat-resistant steel as a material of engine valves. Nittan Valve aims to reduce costs by maximizing Eaton's purchase networks. It will promote the collaboration in procurement especially in the Americas and Europe.
NIDEC buys out motor business of Emerson
 NIDEC bought out and acquired a hundred percent ownership of the motor business of US Emerson in September 2010 (the acquisition cost is undisclosed). NIDEC Motor Corporation (Missouri) will take a core role in the business operations of the business that has been bought out. By maximizing the acquisition of the motor business of Emerson, NIDEC will strengthen its home appliance motor and large motor businesses in the US, and by leveraging the high efficient SR (Switched Reluctance) motor technology of the new subsidiary to the development of the next generation EV motors.
Hitachi Automotive ties up with Airbiquity in telematics services for EVs
 Hitachi Automotive Systems in April 2010 announced a tie up with Airbiquity (Washington) in the telematics services for EVs. The Japanese supplier intends to pave the way for a common system infrastructure to globally provide the telematics services for EVs. These services include communication of vehicle location and battery charge, and eCall support to communicate battery-related information to cell phone. According to Hitachi Automotive Systems, the system will be able to provide users with telematics services more efficiently than those independently maintained and operated by OEMs. Airbiquity provides the technology to connect automotive and mobile communication systems.
Hitachi and Johnson Controls tie up in rechargeable batteries
 Hitachi and Johnson Controls signed a memorandum of understanding with respect to a partnership in lithium batteries in October 2010. Both companies will cooperate in the R&D, purchase, production, marketing, sales and international standardization with regards to rechargeable battery products and systems including Li-ion batteries.
Futaba to establish North American business controlling company
 Futaba in August 2011 announced plans for the establishment of Futaba North America Engineering & Marketing Co., a North American business-controlling company in October 2011. It will be located in the premises of its local subsidiary FIC America Corp. in Illinois. Futaba North America will be capitalized at 125 million dollars, of which 124 million dollars will consist of in-kind contribution of FIC's stocks. For this purpose, Futaba will increase the capital by 49 million dollars in FIC to 124 million dollars. Futaba attempts to accelerate and streamline the decision-making process and enable independent decision making in the North American business.
 In North America, Futaba has plants in Indiana, Texas and Ontario, Canada in addition to FIC, where Futaba produces exhaust system parts and auto body parts. According to the 2020 medium term plan as announced in July 2010, Futaba aims to increase the sales of its North American business from about 50 billion yen in FY 2010, to about 60 billion yen in FY 2015 and to about 70 billion yen in FY 2020.
Furukawa Electric wholly owns joint venture with Lear Corporation
 In June 2010, Furukawa Electric and Furukawa Automotive Systems acquired 20% equity in Lear Furukawa Corporation (Texas), a joint venture with Lear Corporation, and made it as a wholly-owned subsidiary of Furukawa Electric. Following the acquisition, the joint venture company's name was changed to Furukawa Wiring Systems America Inc. The Texas company, which produces wire harnesses for Japanese OEMs, posted sales of about 65 million dollars in 2009. In April 2009, Furukawa increased its equity to 80% and already changed the venture company's name to Furukawa Lear Corporation. The subsidiary will strengthen the cooperation with American Furukawa Inc., one of Furukawa's wholly-owned subsidiaries which mainly manufactures and distributes electric components.

Source: PR materials of the above companies, and news reports

 



Canada: Showa to produce electric power steering systems in Canada

 

Trends of Japanese OEMs in Canada

Showa to produce electric power steering systems in Canada
 Showa will produce electric power steering systems at its Canadian Plant under Showa Canada Inc. in Ontario according to the news report in July 2011. The Canadian plant has produced propeller shafts and hydraulic power steering pumps. Showa has set up a clean room and will have the plant start production of electric power steering wheels. Showa will respond to its main customer Honda, which expands the employment of electric power steering wheels to overseas models in addition to the domestic models, because the electric power steering systems improve fuel economy compared to hydraulic systems.

Source: PR materials of Showa and news reports

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