Northwest Ohio region luring Japanese firms

Development official cites work force, transportation as key

11/22/2013

Zito

THE BLADE
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A total of 36 Japanese-owned companies that employ more than 7,500 workers operate in northwest Ohio — and that number could increase because of a variety of economic, geographic, and cultural factors, according to a Toledo area economic development official.

Paul Zito, vice president of international development for the Regional Growth Partnership, said that in the last few years businesses in Japan seem to be more interested in investing in the United States, with a keen eye on Ohio.

For example, in September at the Japan Midwest Conference trade show in Tokyo, the Topre Corp., an auto parts supplier based in Tokyo, announced that it would open an engineering office in Maumee that will hire eight workers.

“It’s only eight jobs for the first two years. But the good news is they’re engineering jobs, highly skilled with good training and a good future,” Mr. Zito said.

Topre, which has a manufacturing plant in Alabama, has suggested it might want to expand farther in the United States. That could be in Alabama, but it could be in northwest Ohio, Mr. Zito said.

“I think there’s great potential for the future in the region if [Topre’s] growth continues,” he said.

The RGP executive said that at the trade show in Japan, northwest Ohio officials met with executives of Mitsubishi, Kikkoman Corp., Hitachi Ltd., Mitsui & Co. LTD., and other firms.

The meetings resulted in two more leads from companies considering opening operations in northwest Ohio — an automotive supplier and one involved in agribusiness. “These two new projects have the potential of over 200 jobs,” Mr. Zito said.

Japanese companies slowly have migrated and expanded in Ohio since Honda built a motorcycle engine plant near Anna in the late 1970s.

The ties with Japan are especially strong along I-75, leading the growth partnership to team up with the Findlay-Hancock County Alliance to tout northwest Ohio to Japanese companies.

Mr. Zito said Japanese firms had been comfortable with a tight just-in-time format that allowed them to produce parts in the United States and ship them to assembly plants in Japan.

But the disastrous 2011 quake and tsunami in Asia disrupted those just-in-time lines so severely that some Japanese firms are rethinking their strategies, he said.

“The concerns Japanese manufacturers have about the supply chain have made Japanese producers want to localize their production even more,” Mr. Zito said.

Also, Japanese firms that utilize low-cost countries such as Vietnam to make parts are rethinking those sites because of continual poor quality.

“The result is it has made some Japanese manufacturers want to shift from low cost countries to Europe and the U.S., and the U.S. is being seen as an ideal platform to access Latin America and Europe,” Mr. Zito said.

Those views, he said, were confirmed at the trade show when trade officials from the U.S. Embassy in Tokyo showed him a survey that said 60 percent of Japanese firms with U.S. operations plan to invest further in the United States, and 40 percent plan to create more jobs in the United States.

Fred Treuhaft, a partner in the Toledo office at the accounting firm of Plante Moran, said it appears that the Japanese economy, which has been in the doldrums the last decade, is starting to become more robust.

Plante Moran provides services to many of the Japanese firms in northwest Ohio, and its experts have noted that Japan “has shown a renewed interest in being in the largest economy in the world and increasing their presence in the U.S.,” Mr. Treuhaft said.

Japanese firms appreciate the region’s labor force and its strategic location as a transportation hub, he added.

Also, over three decades northwest Ohio has developed a service infrastructure of accounting, legal, and banking services that do business with Japanese firms. Other areas don’t have that, Mr. Treuhaft said.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.