Kentucky

Business impact in state extends far beyond Toyota

ssloan@herald-leader.comMarch 12, 2011 

While most Kentuckians probably think of Toyota when it comes to Japanese employers in the state, the business impact of Friday's devastating earthquake and tsunami could be far greater.

Nearly 150 businesses in Kentucky, primarily auto suppliers, are owned in whole or in part by Japanese companies, and they employ 31,868 full-time workers, according to the state Cabinet for Economic Development.

Many of those companies spent Friday accounting for employees in Japan on business travel and creating task forces to examine the impact on shipments of materials they receive from damaged areas.

The Toyota plant in Georgetown, the automaker's largest in North America, does not anticipate any immediate production disruptions because of the disaster, which shut down numerous automotive plants in Japan.

Plant spokesman Rick Hesterberg said the company also doesn't see "an immediate threat to any of our other manufacturing facilities in North America."

The factory generally keeps a greater amount of foreign-produced parts on hand, given the complexity of transportation issues. But he also noted that the North American plants have been using fewer and fewer foreign-produced parts in recent years.

"The Camry being the most American-made car benefits us," he said, noting the designation assigned to the vehicle by Cars.com. The Web site ranked vehicles based on factors including location of assembly and the places where parts are produced.

"The localization of what we've done in this market is certainly to our benefit," he said.

The North American-produced content in the vehicles made at the Georgetown plant — the Camry, Camry Hybrid, Avalon and Venza — makes up 80 percent to 85 percent of all parts in the vehicles, Hesterberg added.

Production employees at the plant will continue to assess the earthquake's impact on suppliers in the coming days.

The plant has also accounted for all business travelers who were in Japan. The areas they visit are south of the most severely affected parts of the country, which were mostly in the northeast.

Another manufacturer in the area, Lexington's Link-Belt Construction Equipment, could see delivery delays, spokesman Jeff Schmidt said. Some of the company's main products, lattice boom crawler cranes, are built in whole or in part in Japan, he said.

And while the plant there didn't suffer any damage, there could be delays "due to, if nothing else, transportation issues in Japan, much less damage to their suppliers' facilities."

In Harrodsburg, employees of Hitachi Automotive Systems Americas, which produces electronic and electro-mechanical vehicle components, learned there was significant damage to some Hitachi facilities in Japan.

David Edwards, human resources senior manager, said the company is reviewing the information that is available, "but as far as concrete information, we don't have that at this time."

The lack of available information was also a stumbling block at INOAC Automotive in Springfield.

"For us, there's not an immediate impact but, long-term, it's hard to tell," said John Simpson, human resources manager for the company, which manufactures automotive armrests and interior plastic parts, among other items.

Other Japanese-owned plants in the state benefited from what Toyota's Hesterberg described as the Americanization of auto supplies.

Kobe Aluminum Automotive Products in Bowling Green buys all its materials in the United States, Vice President Masanobu Iwata said. So, too, does Kokoku Rubber in Richmond and Central Motor Wheel of America in Paris.

But Friday was a rough day for them, too, as they tried to reach employees at their headquarters and others in the ravaged areas.

At Central Motor Wheel, the company helped its Japanese workers reach out for news, said Jamie Snapp, human resources manager.

"All of their families and loved ones are accounted for, but they do have friends and extended family members who live in those areas," she said, "and I'm sure it's very disturbing."

Reach Scott Sloan at (859) 231-1447 or 1-800-950-6397, Ext. 1447.

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