Hino Officials Clear the Air on Parts Plant Plans

by John Henry  on Wednesday, May. 19, 2004 12:06 pm  

When Hino Motors Ltd. made its May 5 announcement of buying a site at the Marion Railport Industrial Park to build a parts plant, there were so many rumors being tossed about of a future assembly plant that company officials were in Arkansas Tuesday to set the record straight.

First of all, the only official decision made so far is that the company has bought 160 acres and will build a plant to make parts for Toyota Motor Corp., the company that owns Hino. That deal closed last week.

Saying the information that has appeared in newspapers is inaccurate, Bunju Hagiwara, senior managing director and a member of Hino's board of directors, said the company "hasn't reached the stage to announce specifics."

Site preparation at Marion will begin this month, Hagiwara said. He said the board is awaiting orders from Toyota for parts, and then, based on that information, it would decide in late June how much investment would be needed for the plant. He said he hoped to be able to make a specific announcement at the groundbreaking in July. Production is expected to begin in 2006.

When announced, Hino gave neither an estimated employment figure nor size of investment.

Last week, Hagiwara said the parts plant would have an estimated employment of 200-300 workers. Newspaper reports of 1,000 or more jobs were "very exaggerated," he said.

Hagiwara said he "cannot comment on an assembly plant at this time." Although The Associated Press said the parts plant was a prelude to a future assembly plant, Hagiwara said the company is just starting the feasibility study and that several issues must be resolved before a decision will be made.

Hino has developed a new truck model that it hopes will "satisfy the needs of the North American market," Hagiwara said. The big question that remains is, "Will it sell well enough to warrant building an assembly plant?"

The company plans to produce 4,000 of the new models at Toyota's TABC Inc. plant at Long Beach, Calif., beginning in October. An annual sales goal of 10,000 trucks by 2006 and 30,000 by 2010 has been set. It currently sells about 3,000 trucks in North America, all of which are now made in Japan.

Hagiwara said if sales exceed what the Toyota plant can produce, then Hino will build an assembly plant.

Though Hino has been the largest truck manufacturer in Japan for the past 31 years, it is relatively new to the United States. It makes medium and heavy-duty trucks and buses that are sold in more than 100 countries.

Although its presence is strong in Japan and Asia, with sales of $9.5 billion last year, the company will have to build a network of dealers to reach its sales goals here, and it will face much tougher competition from already established truck makers here.

"Once we reach 10,000 units a year and if we decide to build a plant in the United States, Marion will be a strong candidate [as a plant site]," Hagiwara said, though the city does not have a lock on that possible plant.

However, he did mention that the recent Environmental Protection Agency ruling that would tighten the clean air requirements in Crittenden County would also enter into the decision.

There's little doubt the company likes the Marion site. It was chosen after looking at 20 sites across the country.

"We're very happy and satisfied with the land," Hagiwara said. "Marion was the most attractive. It offers easy access to the freeways and a container railyard, both of which are very favorable for distribution, and a high-quality labor force. He also praised the enthusiastic support from Gov. Mike Huckabee and his staff.

In addition to Hagiwara, the delegation of company officials included Kanji Fujimoto, also a senior managing director, Rio Sakata, an assistant manager, and Junichi Yoshida, manager of the communications department. Terumi Gale of Washington, D.C., served as interpreter at the meeting at The Peabody Little Rock. The meeting was set up by Mike Goss, manager of external affairs of Toyota Motor Manufacturing North America Inc.



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