New American auto manufacturers have invested heavily in rural areas, such as the Mercedes-Benz plant in Vance, Ala.
The big business of Harrodsburg, Ky., was farming when Hitachi Auto-motive opened its U.S. factory there in 1985.
To supply idle-speed valves to Nissan's new U.S. plant in Tennessee, Hitachi had to hire about 100 local people who had never worked in a factory before, let alone in an automotive factory where every part was expected to be perfect.
'We were a screwdriver factory,' recalls Terry Cooper, the company's vice president of operations - himself drafted for the job from outside the auto business.
'We just put together parts that came from Japan.'
It was a humble start. But like hundreds of other auto suppliers and vehicle assembly plants that have appeared in Amer-ica over the past 15 years, Hitachi has rapidly matured into something bigger than the industry ever expected.
Today the plant employs 975 people. It has expanded to include 15 distinct manufacturing operations, including the in-house machining of locally made aluminum castings. Products range from vehicle ignition systems to alternators to engine controls. And serving as the headquarters for all Hitachi automotive business in North America, the operation is the largest employer in the county.
Such stories apparently have snuck up on the U.S. industry and on the U.S. public. In just 15 years, the 'transplant' auto industry - the body of vehicle assemblers and suppliers that moved production here from Japan, Europe and Korea - has become interwoven into the fabric of American society.
'We now see that this is an extraordinarily important industry,' says David Cole, director of the University of Michigan's Office for the Study of Automotive Transportation in Ann Arbor, Mich. 'Whether you look at the number of jobs that are related to it or at the level of personal income that's coming out of it, this is a much more important sector of our economy than we had anticipated.'
Late last month, Cole's research team released a year-long economic study of the sector. Its chief findings:
Non-Big 3 auto companies now account for 22 percent of U.S. automaking capacity. That represents a factory capacity of 2.6 million vehicles this year.
The rise of international firms in U.S. production has helped shift the balance of industry power away from Japan, where it resided in the 1980s, and back to the United States. With fewer imports from Japan and more U.S. production of Japanese and European vehicles, the United States now turns out nearly one-third of all the vehicles produced in the world.
The international automakers spent more than $43 billion in 1996 on U.S. component purchases and employee compensation.
The group now supports 6.5 jobs for every one person it employs. That 'multiplier' is still lower than the multiplier of 7.5 to 7.8 jobs per Big 3 job. But according to the study's authors, the international automakers are rising to the same Big 3 level.
Including related jobs at auto dealerships and in the service industry, the study estimates the international auto industry is now responsible for as many as 1.3 million U.S. jobs.
Cole's team conducted the study on behalf of the Association of International Automobile Manu-facturers. That Washington-based trade group has for years grappled for public recognition as a viable economic force in America.
Now, says AIAM President Philip Hutchinson, the automaker members have tangible proof.
'This brings out the fact that the growth of the international auto industry is very good news for this country,' Hutchinson says. 'It's fair to say that North American automakers have moved from mass production to lean manufacturing as a result of this growth and new competition. The U.S. auto industry is again leading the world, and we've helped make that happen.'
Hutchinson refers to the widespread use of Japanese lean-manufacturing practices across North America. The transplants, he contends, woke up the U.S. industry to demanding new competitive pressures, to improved quality, reduced waste and better worker efficiency.
Cole agrees, although quantifying that assumption was beyond his study's scope. 'The intellectual spinoff that has occurred from this growth and the additional competency it's created in other parts of the economy is really an additional story,' he says.
'You could say that the robustness of our economy is due to the fact that we've brought in so much new intellectual capability, and we're beginning to use it today.'
Another hard-to-detail economic benefit, according to Cole: The new American auto industry has invested heavily in rural areas of the South and Midwest where industry was sorely lagging. In Elizabethtown, Ky., near Fort Knox, there had not been a new plant built since the mid-1960s when Ambrake Corp. came along in 1988. The joint venture between Japan's Akebono Brake Co. and General Motors' Delphi Systems has trained nearly 1,000 workers in Japanese production techniques to run a new company with annual sales of $350 million.
'There are a lot more restaurants around town now,' reports John Harris, a former Detroit factory manager with Kelsey-Hayes Group, who is now president of Akebono's Elizabethtown-based U.S. subsid-iary. 'The city's got money. People have money. They have the latitude to do things they couldn't do 10 years ago.'
Since it arrived in Lewisburg, Tenn., in 1984, Japan-based Kantus Corp. has boosted employment to 750 people. Next year, the company expects to announce a U.S. research and development center, proposed for southern Michigan.
The expansion continues in step with the international automakers here. Central Manufacturing Co., a wheel supplier that opened in Paris, Ky., in 1990, currently produces about 2.5 million wheels a year. With the growth of key customers such as Toyota and Honda, Central plans to boost that capacity to 7 million wheels a year over the next four years.
'Our business is evolving quickly,' says Frank Bellafato, a 25-year veteran of GM engineering who is now Central's president. 'What we have here now is real manufacturing. We use all domestic steel. All domestic aluminum. I'd estimate that 98 to 99 percent of our suppliers are American.'
At the same time, the new investment has helped bring new manufacturing muscle to some traditional U.S. automotive firms, including the biggest of them all, GM's Delphi Systems. New business with Mercedes-Benz U.S. International Inc. in Vance, Ala., is allowing Delphi to serve as one of the first true 'systems integrators' of North America.
From a new plant near Mercedes, Delphi gathers interior electronics parts from several other major suppliers - including traditional competitors such as Denso Interna-tional - and assembles them into a complete cockpit. The cockpit is delivered in sequence to the Mercedes line, where a Delphi employee works full-time assisting with the installation.
This kind of systems integration is expected to catch on globally over the next decade. Thanks to Mercedes' new U.S. plant, Delphi is gaining experience to offer the service around the world.
At another old U.S. firm - Bodine Aluminum Inc. in St. Louis - Toyota has trained hundreds of workers in aluminum-casting processes that are relatively unknown in America. Toyota bought the 86-year-old tractor-parts maker in 1990. It now uses Bodine engine blocks made from a vacuum-assisted pressure casting process that required Bodine's workers and managers to be trained in Japan. It also consumed part of the $600 million capital investments that Toyota has committed to Bodine since 1991.
The economic benefits continue pouring in. Now, two suppliers of raw aluminum are constructing a new aluminum smelter next door to Bodine's engine-parts plant in Troy, Mo. When completed this fall, that smelter will begin delivering liquid aluminum hourly to the Bodine plant.