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Japan helps shore up state's industrial base

While manufacturing plants and related jobs have been disappearing in Ohio over the past decade, businesses with Japanese investment - mostly involved in production - have grown.
/ Source: Business First of Columbus

While manufacturing plants and related jobs have been disappearing in Ohio over the past decade, businesses with Japanese investment - mostly involved in production - have grown.

A study by the Japanese consulate in Detroit of investment in Ohio shows small declines in the number of Japanese-owned facilities and Japanese workers in the state last year, though the number of Ohioans employed at Japanese-owned companies was on the rise.

All those measures, meanwhile, have increased over the past 10 years.

"The scale of investment is huge," said Eric Burkland, Ohio Manufacturers' Association president. "The economic impact is huge and probably underappreciated."

Consul General Tamotsu Shinotsuka said Ohio has become the second-biggest recipient of Japanese investment in the United States, trailing only California.

"Ohio is very important to Japan," he said.

Employment at all Japanese-owned businesses in Ohio stood at 66,516 in 2007, up 1.8 percent from 2006 and up 11.5 percent from a decade earlier, according to the study. The seven-county Central Ohio region had 91 Japanese-owned facilities employing 18,993 workers last year.

Steady production

The driving force behind the investment haul is Marysville-based Honda of America Manufacturing Inc. The automaker and its suppliers account for $17 billion of Ohio's estimated $85 billion in annual industrial production, Burkland said.

Honda has 15,000 workers in the state, most of them in the Columbus region, and it buys parts from 151 Ohio-based suppliers that employ 40,000 workers. Not all of the suppliers are Japanese-owned and many do work for other companies, said Honda spokesman Ron Lietzke.

Japanese producers have not been immune to Ohio's industrial struggles, but compared with the overall manufacturing climate in the state, those businesses have fared better.

Manufacturing operations account for 64 percent of the 381 Japanese-owned facilities in Ohio, with just over half of those in the automotive business. Jobs at those manufacturing facilities were down 1.4 percent to 39,021 from 2006.

The job increases come against a contrasting backdrop. The Bureau of Labor Statistics reports Ohio manufacturing employment has fallen from more than 1 million in December 1997 to 767,500 in December last year - a 26 percent decline in the decade. Manufacturing employment at Japanese-owned businesses, meanwhile, fell marginally in the same period, from 39,404 to 39,021 employees.

Of the nearly 19,000 jobs in Central Ohio tied to Japanese investment, 9,705 were in manufacturing.

Shinotsuka attributed the comparative success to the growth in popularity of Japanese cars and trucks.

"Compared with the Big Three, Japan has enjoyed good performance in the U.S.," he said, referring to the struggles of the major U.S. auto manufacturers.

Welcoming atmosphere

Shinotsuka said there have been two high-profile closings of Japanese-owned facilities since 2002, but otherwise business has been good.

Techneglas Inc., owned by Nippon Electric Glass Co. Ltd., closed its Columbus plant in 2004. The company had more than 1,000 employees in Ohio in 2002, but was down to fewer than 400 when it shuttered its operation, which made television picture tubes.

MT Picture Display Corp., a picture-tube maker owned by Matsushita Electric Industrial Co., closed its Troy factory in 2005. It also had more than 1,000 employees in 2002.

Honda may be the biggest lure, but the automaker is not the only attribute for the Buckeye State. Shinotsuka said Ohio has a large skilled labor force and a location that puts businesses within easy transportation access of customers and suppliers.

He also praised state leaders for making Ohio a welcoming atmosphere for Japanese investment and businesses, a positive relationship that dates back to 1979, when the state enticed Honda to Marysville.

"Japan is happy to see the relationship is so great and so close," he said. "We hope it will continue."