The soaring yen has prodded another Japanese company, Ube Industries Ltd., to set up plastics machinery assembly operations in the United States. Ube will break ground in October on a 50,000-square-foot assembly factory about a half-mile south of its existing facility, Ube Machinery Sales Inc., in Ann Arbor, Mich.
``We are planning to assemble injection molding machines first, ranging from 500-4,000 tons,'' said Ryusuke Nakamura, president of Ube Machinery Sales. The building, equipped with overhead cranes, should be completed by May.
Ube hopes to build an average of 30-40 injection presses a year, Nakamura said.
``Eventually, by the year 2000, we are planning to build 70-80 machines'' annually, Nakamura said.
Ube also plans to make die-casting machines in Ann Arbor, starting in the second half of 1997.
Nakamura declined to say how much Ube is spending to build and equip the assembly facility. He said Ube purchased 26 acres of land, allowing for future expansion. Ube currently employs 30. Thecompany expects to add about 20 more positions when the new plant opens, he said.
Ube, like most other Japanese injection press manufacturers, is no stranger to sourcing parts from U.S. suppliers. Tokyo-based Ube, which builds presses in Ube City, Japan, established its Michigan office in 1985 to sell directly to automakers.
For the past five years, Ube machines sold in the United States have contained U.S.-made components such as screws, nozzles, check rings, pumps and motors. Exchange-rate dynamics drove that sourcing decision, as well as the new Ann Arbor assembly operation.
``Exports from Japan are very difficult,'' Nakamura said.
Ube officials have said that, once the exchange rate hit 125 yen to $1, the company could build its machines at lower costs with U.S.-made components. In recent years, Japanese manufacturers have been punished by the steadily rising yen - which broke through the barrier of 100 yen to the dollar in mid-1994. Last week, a dollar would buy about 96 yen.
Forced to raise prices in the important U.S. market, and to watch as profit tumbles, more Japanese press makers appear ready to follow their counterparts in the auto and machine tool industries and set up transplant assembly plants. Earlier this year, Mitsubishi Heavy Industries Ltd. started assembling presses in Hopkinsville, Ky., at a plant that also makes metalworking machines.
In recent weeks, another major Japanese supplier, Toshiba Machine Co. Ltd. has made rumblings about U.S. production. An Aug. 9 news report in Tokyo said Toshiba will establish a U.S. assembly plant, but officials of the company's U.S. unit, Toshiba Machine Co. America, later said no final decision has been made.
Toshiba already buys U.S.-made components and installs them on Japanese-made presses at its warehouses in California and New Jersey. Toshiba America of Elk Grove Village, Ill., wants to boost its U.S. content to 50 percent in the next several years.
Ube's Nakamura said the yen/dollar relationship is not the only reason for U.S. assembly. Customers want machines that are made domestically, he said. The Ann Arbor plant also will allow Ube to ship spare parts quicker and at a lower cost, he said.
Ube has become a major supplier of injection presses to the automakers and the molders that serve them. Ford Motor Co. is a major customer. Nakamura said 40 Ube presses are at work at Saturn Corp., the General Motors Corp. division in Spring Hill, Tenn. Some of those machines are huge - as large as 5,000 tons. Ube also sells large machines to Japanese car assembly plants in the United States.
The Ann Arbor facility will assemble horizontal, toggle-clamp injection molding machines, Nakamura said. Initially, he said, the machine base will be shipped from Japan.
Ube currently makes some hydraulic-clamp machines, and some large vertical presses for the Japanese market, but those machines have not yet caught on in North America, according to Nakamura.
The concept of transplant injection press factories may be new, but Japanese machine toolmakers have produced metalworking equipment in the United States for some time, noted Alexander Paris Sr., a machinery analyst who follows both markets.
``Probably all of them are over here in one form or another,'' he said.
U.S. labor costs, plus global currency fluctuations, are making U.S. production more attractive in general.
``It's not just [machine] tools, it's cars too,'' said Paris, president of Barrington Research, based in Barrington, Ill.
Ube Industries Ltd. actually is a group of about 250 companies involved in chemicals and plastic resins, building materials, machinery, coal and other products. A groundbreaking ceremony is scheduled for Oct. 16 in Ann Arbor.
