JAPAN'S `SECOND WAVE': PART 2. How Seymour won Aisin Seiki

Long after others have forgotten, this patriotic little town is still holding an annual parade honoring its veterans and their World War II victory over Japan. VJ-Day is a big day here, and sentiments still run deep. So when a major Japanese manufacturer last summer announced plans to build a $15 million auto-part plant in the town, there was some anger and some shock.

One person not surprised by the announcement was William Bailey, the mayor of Seymour. He and other community leaders had labored quietly for nearly a year to lay the groundwork that would convince Aisin Seiki, a major manufacturer of auto parts, to locate a factory and its 175 jobs here.

``[Aisin Seiki officials] knew about the parade,'' Mr. Bailey says. ``They were sensitive to it - but they let it be known in a very diplomatic way that they didn't want the fabric of life in Seymour to change in any way.''

Though he acknowledges that a ``small minority'' of unhappy voices still exists, Bailey believes the vast majority of residents are eager to welcome the ``Aisin U.S.A.'' factory and the first five or six Japanese families to put down roots here.

``We're creating a receptive environment - a safety net - to help those Japanese children and housewives adjust to living here,'' Bailey says. ``In return, the Japanese are building a plant, bringing in new jobs, buying homes, and investing in this community.''

Like a number of small towns in Indiana and elsewhere in the Midwest, hard times and the loss of many manufacturing jobs have stirred civic leaders to explore foreign investment - specifically Japanese investment - more thoroughly.

With currency exchange rates unfavorable to the Japanese, small and medium-sized Japanese companies are being driven to export their factories. Joint ventures are evolving between US companies and smaller Japanese companies that have good manufacturing skills but don't always have marketing and distribution channels in place.

Since about 1985 a ``window of opportunity'' has developed, state and local officials say. Japanese direct investment in the United States continues to increase at about 30 percent a year. Though final figures are not in yet, total Japanese direct investment in the US last year is expected to be between $24 billion and $29 billion, compared with $19 billion in 1985.

With such a heavy flow of investment coming to the US, city mayors, state officials and academics say economic conditions are ripe to gather in Japanese industry.

``A few years ago, when times were really hard and plants were closing down, there was a certain desperation to be more global,'' says Kathryn Weathersby, outreach director for East Asian studies at Indiana University. ``There is now much more global thinking that has come down to a local level, and less dependence on centralized, state authorities to promote investment and exports.''

Seymour is just one example of a Midwestern town that leaped at the chance to bring in Japanese investment - and a new culture. Many other Midwestern cities have also felt the effects of a ``second wave'' of investment by smaller Japanese companies.

Indiana makes a good case study because its small towns like Shelbyville, Columbus, Rushville, Greenwood, Kokomo, Fort Wayne, and Bloomington have taken strides to market themselves to the world - and broaden small-town attitudes to include and welcome a dramatically different culture.

Billing itself as ``the crossroads of Southern Indiana,'' Seymour is strategically located near Interstate 65. It is just a few hours by truck to the US auto factories of Detroit and to new Japanese factories in Tennessee, Illinois, Ohio, Kentucky, Michigan.

Not long after Aisin Seiki announced it would locate in Seymour, the town campaigned for and won a second Japanese company: Yuma Industries, which brought about 25 jobs and $3 million in investment. Because competition is so fierce between states - and cities within states - Seymour officials acknowledge they have had to gain a certain sophistication in their marketing efforts. Although it's a small town, there is now a full-time professional economic development director to sell the city's industrial virtues.

``We're not a bunch of clods that don't know how to market ourselves,'' Bailey says. ``The state isn't going to be embarrassed bringing companies down here. We can entertain, give technical site information, help arrange financing, and create a safety net as well as anybody.''

Though Japanese families won't arrive until the factory is built later this year, the city is preparing for them. Pen pals of approximately similar ages and sexes are being lined up to send letters, pictures, and even T-shirts to the wives and children of Japanese supervisors before they get here.

Japanese parents are especially concerned that their children not lose their language skills or fall behind their peers back home who continue to attend classes on a six-day-a-week schedule. To remedy that, Seymour is working with officials in nearby Columbus, Ind., (which has also attracted several Japanese companies) to offer a special Saturday class in Japanese.

Japanese wives, who tend to lead fairly insular lives in their native land, will also be getting help in such basics as learning to drive on the right side of the road and passing driving tests. A local hotline is also being established that these wives can call if they need a plumber or just need help shopping.

Something very similar is happening 160 miles to the north in Lafayette, Ind.

``Our biggest challenge is caring for the newly arrived Japanese families,'' says Gregory Regnier, training coordinator for Subaru-Isuzu Automotive Inc. That joint venture involves building a $500 million auto assembly factory and bringing 250 Japanese workers and 50 families to this college town of about 43,000 people.

``What will the wives and children be able to do or not do in their new community?'' Mr. Regnier asks. ``If problems develop at home it affects work performance in the company - this is a major concern.''

Fortunately, Regnier says, a lot of people, including East Asian specialists at nearby Purdue University, have volunteered to help during the transition. This includes helping to teach Japanese women how to drive. (Drivers' licenses typically cost $1,500 each in Japan; a family can usually afford only one.) The Lafayette YWCA will help introduce Japanese women to American grocery stores, products, and other aspects of life in the US.

Although Seymour's Aisin Seiki plant will not open for several months, its impact - coupled with the city's economic development plan - is quite noticeable. In downtown Seymour, 23 storefronts that were vacant four years ago (17 percent of the total) have been reduced to just two empty display windows, or 1 percent of the total. The chamber of commerce, which was dormant for some time, now actively promotes the town.

Still, the town isn't overeager. Mayor Bailey points to a sour experience the city had cleaning up a mess left by one company several years ago. Its polluted chemical dump in the northwest corner of town was so bad, Bailey says, that it gained a reputation as one of the world's five worst sites.

``Having survived the cleanup, we also have some criteria for looking for a factory that's going to be a good citizen,'' Bailey says. ``We're not going to prostitute ourselves for 200 jobs.''

The mayor says the bottom line is: Aisin Seiki wants to make money, be a good local citizen, and allay any ill will left from the last world war. All this will be tested later this year when the Japanese begin to arrive.

``These people are coming into our community to become part of our family,'' Bailey says. ``If the Japanese want to locate industry in the US, then Seymour will do the best we can to have one or two or more of them find homes here.''

Second of three articles. Next: What sold Japan on Shelbyville?