Expansion Solutions, March/April 2017
Scan the latest news headlines in Indiana and you will find a reoccurring theme — foreign direct investments making immeasurable impacts across the state. In particular, Japanese FDI has exploded, continuing the auto manufacturing industry’s ongoing growth in the economy.
According to the Indiana Economic Development Corporation, Indiana’s relationship with Japan now spans nearly 40 years, and is stronger than ever. Japan is Indiana’s largest foreign direct investor, meaning Japan’s roots run through the state’s economy deeper than anywhere else in the world. Japanese companies operate more than 260 facilities across the state, and those facilities provide jobs for more than 53,000 Hoosiers. Indiana is the only state in the nation that is home to three Japanese automotive original equipment manufacturers – Subaru, Toyota and Honda. All three have announced major expansion plans in recent years, and that growth has led to expansions at many of the hundreds of Japan-based auto suppliers across the state.
“Indiana offers Japanese companies a stable business climate with a balanced budget and healthy budget reserves. By cutting taxes and regulations, Indiana is one of the most affordable places in the United States for doing business. As the home of the nation’s highest concentration of manufacturing jobs, one in five Hoosiers work in manufacturing. This means Indiana has the skilled workforce Japanese manufacturers need to grow,” said Indiana Secretary of Commerce Jim Schellinger.
With the surge of new companies calling Indiana home, power suppliers have answered the call for increased energy demands. Hoosier Energy, a generation and transmission cooperative, and its 18 member electric distribution cooperatives, now power more than 30 Japanese companies across central and southern Indiana. The companies include industry leaders such as TOA USA in Mooresville, NTN Driveshaft in Columbus and Nippon Steel & Sumitomo Metal Corporation in Shelbyville, just to name a new.
Another Japanese company is ATTC Manufacturing, Inc. served by Southern Indiana Power, ATTC specializes in machining brake drums, brake rotors, engine caps, steering knuckles, carriers and differential cases. The company ships more than 10 million parts to customers annually, including Toyota, Nissan, Honda, Subaru and GM.
ATTC Manufacturing is part of Japan-based Aisin Seiki, which employs more than 83,000 people across the world, including approximately 2900 in Indiana at 10 companies.
Located near the Ohio River in Tell City in Perry County, ATTC Manufacturing opened in 2000 and has seen steady growth in the industry across the state mirrored in its own operations. Three major expansions added 66,200 square feet in 2002, 55,170 square feet in 2005 and 71,577 square feet in 2006. The company also capitalizes on existing space, adding 70 new production lines during the past several years, including most recently nine new lines for Honda and two additional lines for Subaru. The expansive plant now encompasses 380,000 square feet on 35 acres.
The company employs 580 people working two shifts up to seven days a week. Reliable power is one of the key factors to its successful operations
“We are a Japanese company that strives for perfect execution of our operations and Southern Indiana Power has been a great partner in helping us achieve our mission,” said ATTC Manufacturing Plant Manager Chad James. “I am always pleasantly surprised with how proactive they are. They have the quickest response time of any utility and are always armed with countermeasures to alleviate any issue we have.”
Southern Indiana Power and its electric supplier, Hoosier Energy, work closely with customers like ATTC Manufacturing to proactively meet their needs and collaboratively plan for the expansions, ultimately building long-lasting partnerships between the community and the companies—a concept that Indiana has been dedicated to for years.
“In building relationships with Japan, it starts with friendship. Indiana has led a delegation to Japan annually since 2005, and operates an Indiana office in Tokyo. This allows us to constantly meet business leaders in Japan and discuss opportunities for them to expand their businesses in Indiana. On a cultural level, we’re been proud to call Tochigi Prefecture in Japan our sister state since 1999,” added Secretary Schellinger.
Theresa Kulczak, executive director of the Japan-America Society of Indiana, credits the commitment to relationship building as one of the key factors to successful growth of Japanese companies in the state.
The Japan-America Society of Indiana is a nonprofit organization that offers seminars for Americans on how to effectively conduct business relationships and management seminars in Japanese for Japanese executives. Corporate programs also include lectures, orientations and industry-specific conferences.
“The Japanese are very cautious in making business decisions. When meeting with government leaders, they view them as the CEOs of their states and communities, and by talking face to face it allows them to know their partners on a personal level,” Kulczak. “They want to know who their relationships are with and feel comfortable and confident. Once that trust has been built, they deeply appreciate the relationship and are extremely loyal.”
Kulczak added that the supplier circles in Japan are very interlinked and word travels quickly when a location has proven itself. The Japanese manufactures will continue to expand operations that are successful and view it as maintaining their investments.
“We have a fantastic cooperative network here in the state. I frequently see utilities, community leaders and the state work together to create a multi-layer base of support,” said Kulczak. “When an international project is looking to locate, Indiana really has the structure in place to put the state in the best possible position, and a healthy dose of Hoosier hospitality only adds to the appeal.”
Contributing to the state’s success are the regional and local economic development organizations that play a critical role in helping foreign companies find homes in the cities and towns across Indiana.
In South Central Indiana, Jackson County Industrial Development Corporation Executive Director Jim Plump, who has been with the organization for more than 30 years, has witnessed the impact of Japanese FDI firsthand.
“Throughout Jackson County and South Central Indiana, FDI has been critical to our economic well being and has incredibly enhanced our business landscape; it is a game changer. We travel to Japan every year to meet with our existing manufacturers as well as those looking for new investments, these trips have helped us development business relationships that mean growth and thousands of jobs for our community,” said Plump.
In the late 1980s Aisin Seiki, the same parent company of ATTC in Perry County, opened its first manufacturing facility in Jackson County. Since then multiple sister facilities have set up operations and undertaken numerous expansions to now employ more than 2,000 in the area. The companies include Aisin USA Manufacturing in Seymour and Aisin Drivetrain and Aisin Chemical Indiana in Crothersville.
As more and more companies put down Midwest roots, the distance between Indiana and Japan has become less and less of a challenge, supplier networks are growing and there are permanent boots on the ground for the Japanese companies. And, just as Indiana has embraced the Japanese culture, many Japanese employees and families now call the Hoosier state their home.
“Between Indiana’s world-class business and our strong relationship with our friends in Japan, investment from Japan in our state will only continue to grow,” concluded Secretary Schellinger.
ABOUT HOOSIER ENERGY: Hoosier Energy is a generation and transmission cooperative (G&T) with headquarters in Bloomington, Indiana. The G&T provides electric power and services to 18 electric distribution cooperatives in southern and central Indiana and southeastern Illinois. Hoosier Energy operates the coal-fired Merom Generating Station, three natural gas power plants, several renewable energy facilities and a 1,700-mile transmission network. For more information, visit www.hoosierenergy.com
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