Tokyo--It's official: Japan is battling its first recession in 25 years (with an unemployment rate that's still at a very low 4%). Yet recent talks with several leading OEM suppliers provide strong evidence that the world's second-largest economy will not suffer a long slump.
As these companies point out, Japan's inevitable resurgence is closely tied to that country's status as a powerful global player in a wide range of technologies. If anything, troubles at home are stimulating even more activity by Japanese manufacturers around the world.
For example, automation giant Omron plans to step up its investments in the People's Republic of China, as well as in India and Vietnam. The company also has set up a design center in Europe. THK, which prides itself in developing new patents in linear motion technology, is expanding in both Taiwan and the People's Republic. Moreover, its products travel worldwide as key components in machines from companies like Mazak, one of the world's largest machine tool builders, and Tokyo Electronics, a leader in equipment for semiconductor manufacturing. For example, THK's new "low-noise" ball retainer system with built-in lubricator is being evaluated for a new environmentally-friendly "eco" machining center by Mazak.
While managers at Oriental Motors contend that the long-range growth potential of Asia is "excellent," the company is looking to surging markets in the U.S. and Europe for protection against Asia's current economic troubles. The company cites its network of traveling "technical fairs" worldwide as a prime tool in showing off its broad line of small motors for applications such as appliances, medical, packaging, and semiconductor manufacturing. As for NAIS, a global supplier of sensors, relays, and miniature PLCs, the web has become a key tool to reach engineers worldwide--with some 10,000 hits every month.
Another shining example of the global reach of Japanese suppliers is Minebea, which makes such products as miniature ball bearings, stepper and fan motors, and keyboards. The company now does nearly 90% of its manufacturing outside of Japan, including four plants in Thailand that employ 26,000 and feature a very high degree of vertical integration. Those plants and others around the world are setting high standards for productivity and quality, says Managing Director Ryusuke Mizukami, including ISO 9001, QS 9000, and ISO 14001 for environmental management. In fact, one of the company's most effective sales tools is shuttling plane loads of engineer customers to its Thailand facilities. There the company designs and builds not just millions of high-precision ball bearings, but dies, jigs, tooling, and injected-molded and die-cast components.
But Mizukami expects even higher levels of cost control and manufacturing excellence from its two-year-old ball bearing plant in Shanghai, which Minebea opened at the invitation of the Chinese government that was impressed by the firm's achievements in Thailand. Unlike most operations in China, this plant is not a joint venture but a wholly-owned subsidiary of Minebea.
These examples show that, despite economic worries in Asia, leading OEM suppliers in Japan are by no means retrenching. Like their American rivals, Japanese-based companies know that globalization is an essential part of their growth strategy. Says Minebea's Mizukami: "All around the world, design cycles are getting shorter, and engineers are looking for vendors who can supply high-quality products in large volume under tight schedules. In other words, they want companies that can deliver supply power."
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