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Sunday, 31 March 2013 22:00

BC leverages strong Japanese business connection to spur local investment

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BATTLE CREEK — The relationship between the Battle Creek area and Japanese companies remains strong 37 years after that first Japanese company, Hi-Lex America Inc., opened in the Fort Custer Industrial Park.

The latest addition, TODA America Inc., opened in 2011, bringing the total number of Japanese businesses in Fort Custer to 17.

The majority of these companies are suppliers to the automobile industry, namely the Detroit Three, said Karl Dehn, president and CEO of Battle Creek Unlimited. He said they choose to do business here based on relationship-building efforts that began in the 1970s.

“Over the years, we’ve continued to have a strong retention and expansion program and that has led to a lot of investment by our Japanese companies,” Dehn said. “Our workforce is something that has continued to be attractive to companies and the state.

Companies send their skilled trades people from Battle Creek to other locations because of the expertise and skill level we have here.

“That factors into companies’ decisions to grow here. This is important for our ability to attract additional investment.”

Of the 35,500 people employed by Japanese-owned companies in Michigan, approximately 6,000 are employed in Battle Creek, which accounts for 17 percent of the state’s total, said Dehn, citing figures from Japanese Direct Investment Survey, put together by the Consul General of Japan’s Detroit office.

“Japanese automakers and their suppliers continue to boost investments in their R&D, sales, as well as manufacturing operations in the great state of Michigan, resulting in an impressive 7-percent gain in year-over-year hiring,” Kuninori Matsuda, Consul General of Japan in Detroit, said in a statement. “These companies have rebounded admirably from the challenges of the Great East Japan Earthquake of 2011, and as Michigan’s economy and business climate continue to strengthen, so too does their commitment to producing, employing, and investing locally.”

The architect who laid much of the groundwork for the influx of Japanese companies into Battle Creek is Jim Hettinger, the former head of BCU and owner of Jim Hettinger Urban(e) Development Services. He said he targeted larger Japanese companies like Denso and European companies such as Bosch that had rebuilt themselves after World War II.

“They had reached a stage of maturity and were starting to look at the overseas market,” Hettinger said. “I developed a list of potential companies and established contacts with intermediaries. Battle Creek was one of the few cities up north which was recruiting.”

Much of that recruiting effort involved getting beyond the negative messaging from competing locales in southern states whose officials cited Michigan’s cold weather, Rust Belt status and heavy union influence.

“I told them that we know union people and they’re not monsters,” Hettinger said. “I also pointed out that we’re in a more rural area where unions aren’t as aggressive.”  

Hettinger said the redevelopment of Fort Custer, which had been a military base, was based on an extremely comprehensive Master Plan that included the establishment of a United States Customs Port of Entry and the pursuit of foreign investment.

“Back in 1971, that was quite a precocious recommendation,” Hettinger said. “My predecessor started implementation of the recommendations, and by 1976 we had become a U.S. Customs port and picked up our first foreign investment.”

This required several years of relationship building led by Hettinger with the leadership of Japanese companies. In 1986 he scored a major coup by convincing Denso to build a plant at Fort Custer.

“When Denso decided to come here, that’s when the dominoes really started to tumble,” Hettinger said. “They saw the big cheese come to Battle Creek.”

At least one of his recruitment efforts received a boost from the presidents of Japanese companies already in Fort Custer.

“In some cases, these guys were in college together,” Hettinger said. “There was a company called Yorozu, a General Motors supplier which was going to Lansing. But the owner of the company had been in school with two people who were presidents of companies in Battle Creek. Their first response was, ‘Why don’t you come to Battle Creek?’”

Matsuda said in his report that there are now 481 Japanese companies with Michigan-based facilities that provide 35,554 local jobs. He said that investment is heavily concentrated in Michigan’s automotive sector, with manufacturing jobs accounting for 43 percent of total employment. In 2012, there was a net gain of 728 manufacturing positions in Michigan, representing a 5-percent increase from the previous year.

Japanese investment is concentrated in the southeast and southwest regions of the state. The 391 facilities in southeast Michigan are primarily R&D, engineering, and sales offices. The 90 remaining in-state facilities are predominantly manufacturing operations, the report said.

“While auto-related operations are the driving force of Japan’s investment, I am very encouraged to see Japanese companies diversifying into Michigan’s chemical, advanced composite materials, and energy-related sectors,” Matsuda stated in the report. “The state’s promising medical device sector is also an area in which I encourage greater Japanese investment.”

Japanese companies in the Fort Custer Industrial Park employ more than 6,000 of the 9,500 people working there, according to Dehn. Most of these employees and their families live in the Battle Creek area.

This critical mass is important as more and more Japanese families moved to Battle Creek to work for companies like Hi-Lex, Denso and TODA. Dehn said this enabled the Japanese executives and their families to develop a greater support system.

After some early successes with getting Japanese companies to locate in Battle Creek, Dehn said  community leaders began to look at what could be done to better accommodate managers and their families. As a result, a Japanese Saturday School was established so the children of these top-level executives could receive additional lessons in mathematics and language to keep pace with their peers back home.

Additionally, Dehn said, “The grocery stores and retailers began to understand the needs of our Japanese population and began to offer Japanese food products.”
“Our city leaders recognized the importance of cultural differences,” he said. “The companies have brought the best of both cultures into the workplace.”

Read 2845 times Last modified on Monday, 01 April 2013 11:08

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