Sunday, February 04, 2001

Taft's mission to Japan paying off

Governor laid foundation for trade

By John J. Byczkowski
The Cincinnati Enquirer

        :One year ago, Ohio Gov. Bob Taft was in Japan on his first foreign trade mission, gently prodding Japanese executives in 10 days of meetings and receptions to invest in new facilities in the state.

        Today, it looks as if the governor may have to return to Japan, if only to remind them there's more to Ohio than just Warren County.

        Since the mission, the state has seen $127.8 million in new investment by Japanese companies. Nearly three-quarters of that — $92 million worth, creating 295 jobs — landed in Warren County:

        • SEI Brakes, owned by Sumitomo Electric Industries, broke ground on a $60 million expansion of its Lebanon plant. “We found out about the project during the mission,” said Keith Conroy, international business liaison for the state's Department of Development. “Governor Taft personally followed up on that.”

        • Mitsubishi Electric Automotive America began a $27 million expansion of its Mason plant, which makes electrical components for cars. The governor “met with Mitsubishi and learned the company was considering an expansion. We followed up immediately when we returned,” Mr. Conroy said.

        • Sunnex, which makes motorcycle brakes, announced a $4 million expansion in Franklin.

        The largest new investment in the rest of the state was a $13.8 million expansion by TFO Tech in Jeffersonville, Fayette County.

        “From our perspective, we thought it was incredibly successful,” said Neil Hensley, director of international marketing for the Greater Cincinnati Chamber of Commerce. He was part of the Cincinnati contingent on the trade mission, which included people from Cinergy Corp., Fifth Third Bank and Firstar Bank.

        Last February they were the envy of the mission, having gained the most new contacts. The mission was heavily oriented toward the automobile industry, which most benefited Ohio's Interstate 75 corridor, from Toledo south through Cincinnati.

        Mr. Taft even paid a visit to Toyota, which has its North American manufacturing headquarters in Erlanger, to acknowledge to company officials that many of their suppliers are in Ohio, and that the state was open to listening to Toyota's concerns and needs.

Contacts maintained
               Most of the 55 people from 31 businesses and organizations on the trade mission a year ago make regular trips to Japan — either stopping in at companies that already have facilities in Ohio or paying first visits to prospects.

        Mr. Hensley, for instance, led a Cincinnati group to Japan in October, eight months after the trade mission, to follow up on leads from previous trips.

        The value of the governor's presence, he said, was that it opened more doors at higher levels of Japanese companies. That was important in the two largest investments seen since the mission, by Sumitomo and Mitsubishi.

        “Those two companies had good opportunities in Kentucky to expand their operations,” Mr. Hensley said. Mitsubishi already has a plant in Maysville, Ky., and the state was aggressively offering incentives. Michigan was also in the mix.

        “I think it was key the governor had been to Japan and met with both those presidents. I'm sure that was helpful to our cause,” he said.

Governor respected
               Stephen Lake, president of the Dayton Regional Development Alliance, led a group back to Japan in April, and is going back this April. “You have to keep your hand in the pot or you don't get any part of it,” he said. “We got a lot more doors opened with the governor there.”

        DMAX Ltd., an Isuzu-General Motors joint venture to produce diesel engines that opened last summer in Moraine, is expected to attract Japanese parts suppliers. The governor met with the head of Isuzu. The opening of the plant “was in the process of being culminated, and it was important for the governor to be there,” Mr. Lake said.

        Findlay has 11 Japanese plants in the area. Mayor John Stozich has gone to Japan in each of the last two years. “They feel like the most important person in a city is the mayor. When the mayor's over there, that means a lot to them,” he said.

        And the governor?

        “Just having the governor there meant a lot to those people,” he said.

        Barry Rosenstock, managing director of Ohio's development office in Tokyo, said his database of Japanese contacts roughly doubled when the governor came to town, fed by economic development people who made the trip, and by those who showed up for the governor's many receptions.

        “We have names on the list, the governor follows up with letters to people, we follow up here with contacts,” he said in a telephone interview this week. “At least the dialog has kept moving.”

        The contact database is being used to build export business as well, in areas such as medical products and industrial information technology. Mr. Rosenstock said Japanese companies are being courted to attend Innovest, a venture-capital trade fair in May in Cincinnati.

        There are still development deals in the pipeline — $395 million in potential deals, according to the state's Department of Development.

        “Japanese companies generally take their time in making a decision,” Mr. Conroy said. “My guess is over the next year or two, we'll see more successes.”

The future is here
               The slowdown in the U.S. automotive industry hasn't shut off Japanese investment here. Honda, Toyota and Nissan are all expanding in the United States, and interest in U.S. locations continues from their suppliers.

        “From some of the comments we heard in the meetings and receptions, several Japanese companies considered their futures to be in the United States,” Mr. Lake said. “I think there's investment coming this year and next year.”

        Mr. Hensley said last week that one prospect is expected to decide soon on the location of a large office. And, he expected visits from four Japanese companies over the next 10 days. Two stemmed from contacts made during the trade mission. The other two are confidential — even to him — and he doesn't know if there's any connection to the governor's visit.

        But it wouldn't surprise him if there were.

        “Some of those companies may not have projects for a year or two,” he said, “but they're certainly going to remember the governor went to Japan a year ago.”

        Mr. Taft heads to South America in March, visiting Brazil, Argentina and Chile to push Ohio-made goods. He also leads a trade mission to Germany in October.

        Kentucky's Gov. Paul Patton in May will make his sixth trip to Japan as governor.


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