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PK USA lands key Toyota contract
PK USA Inc. has received a contract from Toyota Motors that will make the company a "tier one" supplier to Toyota for the first time in the company's history.
PK was notified Tuesday that Toyota awarded the company 18 part numbers for the Highlander sport utility vehicle, which will be assembled at a new Toyota facility that is under construction near Tupelo, Miss.
A tier one supplier ships parts directly to an assembly plant.
The Toyota contract is good news for all the PK plants, not just in North America, but throughout the world, and the tier one designation is expected to open doors to more business from Toyota plants in Lafayette and Princeton, company officials said.
According to PK USA president Eiji Umabayashi, the contract demonstrates Toyota's confidence in PK.
"The competition among automotive suppliers was strong. This new business only strengthens our company and enhances our efforts to obtain additional business at all PK USA locations," Umbayashi said.
Before selecting PK, Toyota Motors and Toyota Auto Body visited the Shelbyville plant and the ones in Gallatin, Tenn., and Canton, Miss., to examine the facilities and conduct an intensive review of the company's manufacturing practices. Toyota Auto Body officials recently flew in from Japan and visited all three of the PK plants in the United States in one day.
According to Bill Kent, vice president of human resources and corporate relations for PK, the company will finalize its site selection near Blue Springs, Miss., in order to build a new plant to make the parts ordered by Toyota. Kent said assembly plants want their suppliers nearby to save on the time and expense of shipping long distances. He characterized PK as a just-in-time, or JIT, facility; in other words, the company immediately ships what it manufactures.
"You don't make money on what you have sitting in storage," Kent said.
Although PK welcomes the additional business and the opportunity to expand operations in Mississippi, the pressure is on to complete the new plant within one year. Kent said the company must find and purchase a site, build the plant, buy equipment and be ready to begin production within a year time frame. The plan to build the new facility is so new that specific information about its size and potential number of employees is not yet available.
"We still need to finalize the details," Kent said.
Recent rumors that the Shelbyville PK plant was closing down to move to Mississippi are false, according to Kent. He said PK likely would move some of its equipment to Mississippi, and workers were told that they could consider transferring to the new plant, but the intention is not to close the Shelbyville facility, which serves as the North American headquarters.
PK USA in Shelbyville employs 500 full-time and temporary workers, while assembly operations in Tennessee and Mississippi employ only 50 people each. The company has annual sales of $120 million and is a primary supplier of metal body, chassis and plastic injection parts for automotive companies throughout the world.
The parent company of PK USA, which owns a 75 percent share, is Press Kogyo Co. Ltd., one of Japan's largest independent automotive parts manufacturers. A 25 percent share is held by Mitsui & Co. Ltd., Tokyo, and its wholly owned subsidiary, Mitsui & Co. (U.S.A.) Inc., which are comprehensive trading and investment enterprises.
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