UGN represents a new aspect of companies in Toyota's worldwide supply chain. UGN is an international partnership between Japan's Nihon Tokushu Toryo Co. Ltd. and Switzerland's Rieter Automotive Systems.
UGN is more than a 50-50 joint-venture producer, it is a joint-venture technology supplier. And that is important to Toyota. The automaker manufactured only in Japan 20 years ago, but it is becoming increasingly global in its manufacturing and procurement. Competing globally means Toyota must find new ideas and technologies wherever they exist, not just from its traditional cadre of keiretsu - or exclusive group - of suppliers.
For UGN's latest wave of business from Toyota, the supplier offered two critical items to Toyota: a new technology and a willingness to jump.
Toyota's interest in the technology explains the ensuing sense of urgency.
UGN's parent, Rieter, spent the past 10 years developing an innovative acoustics material under the trademarked Ultra Light name. Ultra Light offers a weight savings of 35 percent over comparable acoustics materials.
But it also represents a new technological approach to sound deadening. Most anti-noise products are put into cars and trucks to muffle the source of a noise, or dampen it. The Rieter technology focuses instead on absorbing the noise waves, regardless of their origination.
"Before, you tried to keep the noise out of the car," says UGN CEO Peter Anthony. "Now you can let the noise in. The sound material is going to absorb the sound waves before they bounce all over the car."
Rieter, a company with worldwide original equipment sales of $1.26 billion last year, is heavily involved in acoustics r&d in Europe. The company strengthened its U.S. automotive sales presence in North America in 1995 with its acquisition of Globe Automotive, Nihon Tokushu's original partner in UGN.
The acquisition gave Globe Automotive's 50 percent stake in UGN to Rieter. But more important, it gave Rieter a sales outlet for its acoustics research work among the Japanese automakers. UGN was established to supply all of the Japanese automakers in North America, not just Toyota - even though Nihon Tokushu is 2.8 percent owned by Toyota. According to its charter, UGN will supply only the non-Big 3 players in North America, leaving Rieter to market directly to the Big 3.
Anthony sold Toyota on the innovation as it worked on developing two of its upcoming products: the newly designed Sienna minivan and the Lexus RX 330, which will be produced in North American next year for the first time. Honda of America Manufacturing Inc. will use the material on its Odyssey minivan.
But Toyota wanted something more.
"They wanted it on the Camry," Anthony says. "Since the Camry is already in production, in high volumes, that meant a running part change for us. They asked us if we could do it. We had to think hard about it, but of course we would do it."