Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, April 14, 1991 TAG: 9104140333
SECTION: HORIZON PAGE: B-1 EDITION: METRO
SOURCE: DONALD WOUTAT LOS ANGELES TIMES
DATELINE: DETROIT LENGTH: Long
"The timing will never be better. The American public is upset . . . ," the chairman of Chrysler Corp. told Bush in a letter attacking the way Japan does business.
As the letter was being made public last month, Chrysler's vice chairman, Robert Miller, was a prominent figure at a new social event here: the first of what is to be an annual dinner of the Greater Detroit and Windsor (Ont.) Japan-America Society.
Chrysler, long portrayed as a sort of junkyard dog in the Japan-bashing kennel, has taken the leading corporate role in the society, recently formed by civic leaders to acknowledge the slightly awkward fact that Japanese companies and managers have arrived in Detroit.
Iacocca's plea for protection from the Japanese even as the community celebrated the new Japanese investors highlights the industrial schizophrenia afflicting Detroit as it confronts this collision of culture and self-interest.
Nearly 300 Japanese firms have set up shop in the Detroit area, not merely to build cars and auto components, but to design and engineer them. They employ at least 20,000 people, most of them Americans.
The vagaries of global economics have brought up to 5,000 Japanese nationals into a community that many of them, accustomed to news reports of crime, poverty and hostility toward the Japanese, dreaded from afar.
What the newcomers are finding, however, is a typically troubled urban area in which most people don't work for the auto industry. Anti-Asian sentiment seems about average here, and crime is a whisper from neighborhoods they'll never see.
Yet Detroiters and the Japanese visitors remain at arm's length from each other in what remains an industrial fight for survival. Japan's rapid expansion here offers a disheartening contrast to the shrinking old Detroit whose automobiles gave shape to the 20th century.
The latest jolt came early this year, with the disclosure that Toyota might build a big research-and-development complex and test-driving track on 1,000 acres northwest of the city. The word leaked out as General Motors Corp. was announcing that it would eliminate 15,000 white-collar jobs - the most recent evidence of retrenchment and financial woes in the domestic auto industry.
Toyota's Detroit-area R&D operation doubtless would have a big role in the development of its long-rumored challenge to that quintessential American vehicle, the full-sized pickup. What better place than Detroit to find the engineers?
Big Three off to salvage?
Many people here feel that this phenomenon has its good points. They say that the growing Japanese presence reinforces Michigan's place as the scientific and engineering center of a global auto industry.
David Cole, head of the University of Michigan's Center for the Study of Automotive Transportation, said: "Detroit is now the [automotive] intellectual center of the world. The Japanese are almost afraid not to be here. It is very good for the region."
Or is that just whistling past the auto salvage yard? Japan's rapid invasion of Detroit's home turf underscores its successes in competition with the domestic industry. For fatalists, it conjures up images of a kind of industrial end-game for the nation's bellwether manufacturing industry, seemingly supplanted in its own back yard.
While General Motors and Ford remain strong, American Motors already has disappeared, and Chrysler's survival in the long term is far from certain. Meanwhile, more than half the Japanese parts makers here are winning contracts - not only from Japanese auto makers in this country, but from GM, Ford and Chrysler - at the expense of Detroit-based suppliers.
"There's a down side to this," acknowledged Frank Smith, president of the Greater Detroit Chamber of Commerce, which has been criticized for its pursuit of Japanese investment. "A lot of the old-line auto suppliers haven't survived. We've lost members over this. One guy called and said he was going to come down and put a Japanese flag on top of our building."
The underlying reality of the conflict is that the domestic car industry is shrinking and, to the extent anyone is, the Japanese are filling the gap. In the Detroit area their growing presence is an ironic economic tonic. For all the protesting about Japanese trade policies, many here embrace the influx because it means jobs and customers.
Local banks and law and accounting firms are hungrily signing up dozens of Japanese clients. Detroit motorists are twice as likely to buy Japanese-brand cars as they were a decade ago. Japanese money is behind the sole construction project in Detroit's struggling downtown.
The invasion of America's heartland by Japanese auto producers in the 1980s is well known. Seven Japanese-owned assembly plants and dozens of sister component plants have transformed the rural landscapes and economies of Ohio, Kentucky, Tennessee, Indiana and Illinois.
But the Japanese arrival at Detroit's door has drawn less notice.
Like many other businesses, the Japanese have largely avoided Detroit itself, setting up shop in the growing, prosperous suburbs ringing the city. But even that is progress. In the past, say state officials, the first requirement of Japanese executives contemplating a move to Michigan was that they be at least 100 miles from Detroit.
But the landscape has been shifting. Detroit's automakers enjoyed an economic recovery in the mid-1980s, and there was less urgency to the corporate, union and congressional complaints about trade policy. More importantly, the Japanese, under political pressure and prodded by labor shortages, did something that undercut their critics: They came to this country to build their cars with American workers.
Engineer central
Lately, the Japanese have entered an important new phase: the start-up of major U.S. research and development ventures by the likes of Toyota, Honda, Nissan and Mazda. Most of this work is ending up in the outlying areas of Detroit.
"The more we buy from here, the more development is necessary here," says Masahiro Uchida, president of Mazda Motor Manufacturing Corp.
Some 150,000 U.S. scientists and engineers are said to inhabit southeastern Michigan, many lured by the globalization of manufacturing. They specialize in such fields as robotics, manufacturing technology and materials engineering as well as automotive design and engineering. The area also boasts a big army of skilled trades people working at some 8,000 manufacturing companies.
Intense competition has placed a premium on such talent. The Japanese are raiding local American companies for their engineers and establishing ties with engineering colleges in the area.
"The Midwest is where most of the automotive engineers are," explains Takeshi Tanuma, president and chief executive officer of Nissan R&D. "If you are going to hire automotive engineers, this is as good as it gets."
To Douglas Mathieson, president of the Engineering Society of Detroit, it is the opposite of a brain drain: "Ultimately, some of these people will come back to the American companies anyway. It's probably good for everybody."
Increasingly, the world view of carmakers renders meaningless the talk of national origins. Hiromichi Kamimura, Toyota's group manager of purchasing in the Detroit area, is responsible for developing North American suppliers of parts for Toyotas. But he sees no difference if those supply firms are Japanese-, American- or German-owned; many, in fact, are Japanese subsidiaries.
"The world is becoming a borderless society," says Kamimura, a leading figure in the Japanese Society of Detroit, a company-dominated group of more than 2,000 members which runs the local Japanese school. "Borders and regulations just hamper the smooth flow of business."
That view leaves little room for the blue-collar, metal-bending history and politics of Detroit.
The region has a distinctive attitude toward Asians, contends James Shimoura - a Detroit attorney, a Japanese-American activist.
The area's huge role in defense production during World War II - when the entire auto industry converted its car factories to build planes, guns and tanks - has created a broader and deeper base for anti-Japanese sentiment, he says.
The Chamber's Smith says: "Detroit is still a long ways from stepping up to the realization that we are pegged to the international community. The blue-collar mentality of Detroit is what stands in the way. A lot of people lost their jobs, and they feel they lost [them] because of the Japanese success. So if your new neighbor is Japanese, I don't think you're going to run next door to shake hands."
by CNB