TOPY CORP. ISN'T QUITE REINVENTing wheels, but it is making them differently. About five months ago, the Japanese-owned company began making steel wheels in Kentucky, midway between Nissan and Honda's U.S. operations. "Topy was supplying them in Japan," says James Burch, industrial relations manager. "When the carmakers moved, we moved with them."
In the next three years, at least 40 Japanese parts makers will park new plants in the Rustbelt. They are tailgating the major Japanese automakers, which will be able to assemble over 1.5 million cars here annually by 1990. Carmakers are close to their suppliers in Japan, so the transplants are assured of contracts. "They are guaranteed a certain volume, so they can come here with less risk," says James Mateyka, a vice-president of Booz, Allen & Hamilton Inc.
The flood of foreign suppliers means an even greater drought for roughly 8,000 domestic companies, who are already hurting because of imports. Many suppliers fear that they won't be able to compete with their new rivals' more advanced factories, which can turn out quality parts at low prices. In response, some big suppliers are even forming partnerships with Japanese competitors. Sheller-Globe Corp. and PPG Industries Inc. are building state-of-the-art factories with Japanese partners. Warner-Ishi Corp., a joint venture between Borg-Warner Corp. and Ishikawajima-Harima Heavy Industries Co., recently won a contract to make turbochargers here for Ford Motor Co.
But few small suppliers have the knowhow to attract partners. "If you're a small, regional supplier with no connection to Japan, this is really going to hurt you," says Jim Clyde, manager of business development at Garrett Automotive Products Cos., another of Ford's turbocharger suppliers.
Japanese suppliers aren't going to be satisfied with their traditional lot, either. Some will start selling replacement parts for the many aging Japanese cars here. Others are making overtures to the Big Three. "Any of the automotive companies are our potential customers," states Burch. "We have the capacity for plenty more."