JAPANESE MOVES WILL HELP US SUPPLIERS
United States auto parts suppliers have a multibillion-dollar opportunity as Japanese automakers vastly increase their purchase of American-made automotive parts.The moves by Toyota, Nissan, and others will "contribute to local economic and industrial growth," says Yutaka Kume, president of Nissan Motor Company. They will also help the Japanese head off a rising tide of protectionism. Automobiles account for roughly 50 percent of the US trade deficit with Japan. Car parts account for nearly another 25 percent, or nearly $10 billion last year. Domestic partsmakers complain they've been locked out of the Japanese market by the keiretsu system, in which makers of cars and parts have close financial ties. But Koichiro Noguchi, Toyota's general manager of international purchasing, counters that US parts suppliers have only themselves to blame, citing "a difference in management efficiency between Japanese and American parts suppliers." He says US suppliers take an average of 114.3 minutes to change stamping dies, versus 7.9 minutes for Japanese. US suppliers need 34.5 weeks to deliver new dies, versus 11.1 weeks in Japan. And Japanese car parts have on average 25 percent fewer defects. The debate is likely to continue over who is at fault, but the Japanese, sensing the recession could bring new trade sanctions, are moving quickly. In many cases, they are promoting joint ventures between US and Japanese suppliers to ensure American-made parts meet their standards. "Most American parts manufacturers could do a better job of meeting the demands of Japanese carmakers," concedes William Raftery, former president of the Motor And Equipment Manufacturers Association, the US trade group.