LOS ANGELES - Japanese original equipment manufacturers, stung by the strong yen, now more than ever see U.S. production as a means of making their wares more affordable. U.S. custom injection molders hungry for business met with Japanese OEMs on March 17 in Los Angeles.
``Japanese companies need to increase their procurement from local [U.S.] companies,'' said Noboru Yumoto, executive director of technology in the Los Angeles office of the Japan External Trade Organization, known as JETRO.
Increased procurement would promote balanced trade and raise the local content of U.S.-produced Japanese products within the constraints of the 15-month-old North American Free Trade Agreement, Yumoto said. The stronger yen makes Japanese exports more expensive in dollars.
Meetings matched injection molders from seven states with potential buyers, said Kenneth Tsunoda, engineer with the nonprofit California Manufacturing Technology Center in Hawthorne, Calif. The center supported the program.
Molders recognize the difficulty of building a business relationship.
``Usually, it takes two to four years,'' said Jim Kubu, president of Victor Plastics Inc. in Victor, Iowa.
Alan Rosenfield, sales engineer with A&E Plastics Inc. in Elk Grove Village, Ill., said ``Two [Japanese] people were very serious'' about further discussions, making his trip to California worthwhile.
Imperial Molding Co., which does business with Japanese OEMs, explained its industry transition over 32 years from supplying aerospace to toys to consumer electronics.
``About 90 percent of our work is with Japanese firms,'' said Hoke Nagahori, president of the Rancho Dominguez, Calif., firm founded by his father.
One issue brought up by the U.S. molders was how to handle OEM demands for mandatory price reductions.
``Sometimes a Japanese business comes to a molder and asks for a percentage increase,'' said Charles Brewer III, sales manager of C. Brewer Co. in Anaheim, Calif.
``That request is acceptable, but I urge them to take the time to develop a relationship and understand the components of cost,'' Brewer said.
He displayed a quotation form and candidly described the components, including often-misunderstood setup charges.
``As partners, we seek ways to achieve the [price] goal through material changes, automation or whatever,'' Brewer said.
At the request of the Japanese OEMs, industry consultant George Freeborn of San Antonio surveyed U.S. custom injection molders to develop a directory of firms interested in serving transplant customers.
``The biggest molders didn't respond, and some of them already do business with the Japanese,'' said Freeborn, former owner of Textek Plastics Inc. ``Some expressed resistance to disclosing sales numbers.''
The resulting directory lists 277 molders and their machine sizes, materials processed and secondary services, but no sales figures. About three dozen molders responded too late for publication.
Founded in 1958, the independent JETRO employs 30 in Los Angeles, 80 in New York and others in San Francisco, Denver, Houston, Chicago and Atlanta and other countries around the world. Japan's Ministry of International Trade and Industry funds JETRO.
A March 13 JETRO meeting in Chicago focused on matching metal stamping and casting firms with Japanese-operated companies supplying U.S. and Japanese automotive manufacturers.
In the near future, JETRO may hold industry meetings on other topics and in other countries including Mexico, said Yumoto, an environmental engineer whose three-year JETRO assignment ends this summer.
