1. Takata: Follow the customer

Our top supplier, Takata Corp., is a family owned operation that started making fabrics in the 1930s. The company made parachutes for the Japanese army during World War II, and entered the airbag business in the 1980s. The company's president, Juichiro Takada, is the son of the founder. He was educated in the United States and is familiar with overseas markets.

The company follows three basic principles: It makes nearly all of its components. When necessary, it will buy local suppliers. And it spends heavily to develop technology. Those precepts have helped Takata maintain a remarkable regional sales balance. Last year, Asia accounted for 37 percent of Takata's $3 billion sales; North America generated 32 percent; Europe accounted for 28 percent; and other markets generated 3 percent.

Takata started as a local supplier for Japanese automakers. As its customers added airbags to their cars and trucks, Takata established a dominant market position, producing roughly half of Japan's airbags and seat belts. Then the company ventured overseas.

Like many Japanese suppliers, Takata came to North America to serve its biggest customer. In Takata's case, it was Honda. To gain American customers, Takata purchased one of General Motors' seat belt suppliers and acquired a fabric company based in North Carolina. By making its own inflators, airbag fabrics and crash sensors, Takata can control quality and costs, says Tom Storr, president of Takata's North American operation, TK Holdings.

The company also established a sophisticated technical center in Michigan. Its heavy investment in research paid off. In 1995, Takata introduced a non-azide airbag inflator two years ahead of its rivals. The new inflator eliminates the risk of toxic fumes when airbags are inflated.

Takata's technical expertise helped it find customers in Europe. German automakers wanted the technology, but they also wanted Takata to produce it locally. So the company set up a plant in East Germany. It also acquired Petri, a leading German maker of steering wheels. That allowed Takata to install airbags in the steering wheel, then ship the complete module to customers.

You can reach David Sedgwick at dsedgwick@crain.com

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