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State sees Japanese firms still making a difference
Daniels looks to duplicate 1980s' success
By J.K. Wall
When unemployment in Shelby County soared to depression-like highs in the early 1980s, Japan came to the rescue.
What saved the county was a friendly invasion of Japanese manufacturers. Ryobi Die Castings came in 1986, followed by PK USA and Yuma Industries, all to supply products to Japanese auto companies. By the end of the decade, the unemployment rate had settled back to 5 percent from a high of 23 percent.
"If it hadn't been for the Ryobis and the PKs, this town wouldn't be what it is today," said Dan Theobald, who was mayor of Shelbyville in the 1980s and is now executive director of the Shelby County Development Corp.
The same could be said for much of Indiana.
About 220 Japanese-owned plants and offices spread throughout the state today employ more than 40,000 Hoosiers. Fewer than 20 firms were here before 1980.
But Japanese investment in Indiana has leveled off in recent years. Some blame a decade of stagnation in Japan's economy. Some say Indiana hasn't been aggressive enough in its business recruitment.
In any case, Gov. Mitch Daniels will travel to Japan this month to keep up relations with Japanese firms and to ask them to help boost Indiana's growth once again. Daniels also will visit Taiwan, where he has a similar agenda.
Among the biggest Japanese investments in Indiana are the Subaru assembly plant in Lafayette and the Toyota assembly plant south of Princeton. The massive facilities, now employing more than 7,000 Hoosiers, turn out hundreds of thousands of cars and trucks each year.
But in communities scattered throughout Indiana, Japanese investment has made a difference.
The plants range from AK Steel Corp. near the Ohio River to Kobelco Compressors America Inc. in Elkhart, from Sanyo Laser Products Inc. in Richmond to Columbia House Co. in Terre Haute -- the Sony-owned CD stamping plant that started the modern Japanese invasion in 1983.
Indiana boasts the second-most jobs in Japanese-owned plants and offices among Midwestern states, according to surveys by the Consulate General of Japan. Ohio has 65,000 employees at 340 Japanese-owned facilities. Nationally, Japanese-owned businesses employ 800,000 Americans, according to the Japanese embassy.
Kevin Cangany has worked at Ryobi in Shelbyville for 19 years. He joined the company six months after it opened, leaving a job in Indianapolis for one closer to home and one that offers insurance benefits.
"It was nice for me," Cangany said. "Things were kind of slow at the time."
The eight Japanese firms in Shelbyville now employ about 1,500 people, which is 7 percent of the work force in Shelby County.
Farther south in Seymour, the Japanese impact is even greater. Six Japanese firms there now employ 3,000 people. And a plant in nearby Crothersville employs another 400. That makes up 15 percent of the work force in Jackson County.
"We were in the same type of situation that you saw throughout rural Indiana," said Jim Plump, executive director of the Jackson County Industrial Development Corp., alluding to 14 percent unemployment suffered under a farm recession in John Mellencamp's hometown. "At the time, we felt like we had to do something to attract new industry."
The first company Seymour attracted -- Aisin USA -- has multiplied since it opened in 1988. At first, Aisin expected to employ 250 employees, with potential to expand to 500. Now, Aisin employs 2,000 in Seymour and thousands more in Crothersville, Rushville, Franklin, Terre Haute, Tell City, eight other states, Canada and Mexico.
Daniels and his entourage will meet with Aisin officials in Japan.
The success of Aisin and other Japanese companies in Indiana is one of the state's strongest selling points, said Larry Ingraham, the former director of Indiana's trade office in Tokyo and now a private consultant to Japanese firms locating in Indiana.
The other major deal-making trait is Indiana's central geographic location in the United States. Distribution and logistics companies have flourished in the state in the last few decades because most of the nation's population can be reached in a day's drive.
"In talking about Indiana, I always mention that we're the crossroads of America," Ingraham said.
Indiana's location has become even more attractive as several foreign automakers have begun to create a "new Detroit" by plopping assembly plants in Southern states, said Patrick Barkey, a Ball State University economist. That makes Indiana a better location for auto parts suppliers.
"They're pulling the center of gravity of the auto industry south (from Michigan)," Barkey said. "It makes us a little more central."
Being central has helped PK USA diversify its business. It started in Shelbyville in 1989 to supply metal brackets, pillars and other auto parts to the Subaru-Isuzu assembly plant in Lafayette. PK still supplies that plant, but now 80 percent of its sales are with Nissan Motor Co.'s factories in Tennessee, Mississippi and Mexico, said Bill Kent, vice president of administrative affairs.
Centrality, along with Indiana's assets in agriculture, medicine, medical devices and research, also could attract life sciences firms.
Two of the Daniels administration's top targets could make life sciences investments in Indiana. One is an unnamed Taiwanese firm. The other is conglomerate Mitsubishi Co. It could build a biomedical, pharmaceutical or agriculture-related facility.
"(Japanese) biotech-related companies," Ingraham said, "they're located on the East Coast and the West Coast. But I think they see they need a location in the Midwest."
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