Global Impact

A Worldwide Economy
Japanese investment key to Tennessee’s global success

Lori Odom, the ECD’s director of Asian business development, works closely with Japanese investors.

Nissan, Alcoa Fujikura, Bridgestone, Komatsu, DENSO, Koyo … what do these Japanese companies have in common? They all call Tennessee home.

Nearly half the state’s $22.5 billion in foreign direct investment comes from Japan. With more than 150 Japanese firms employing more than 43,000 Tennessee workers, the state has forged both a strong business partnership and cultural relationship with its Pacific Rim neighbor.

There are multifaceted reasons Southeastern states like Tennessee have attracted Asian investment. Dr. Kiyoshi Kawahito, the recently retired director of the Japan-U.S. Program and professor of economics at Middle Tennessee State University, cites a combination of infrastructure, geographic desirability and a favorable business climate.

“Certainly there are several common factors that are attractive to Japanese investors,” he says. “Right-to-work laws exist in almost all Southeastern states.” He adds the region’s mild climate and friendly people are also key selling points.

“State and local governments have been very outgoing in arranging or providing tax and other incentives to invite manufacturing industries to the South,” he continues, noting that Tennessee’s governors, in particular, have been enthusiastic in their efforts to welcome foreign investment.

Another major selling point for Tennessee is its location. Nearly 75 percent of the U.S. population is within a day’s drive of Tennessee, points out Lori Odom, director of Asian Business Development for the Tennessee Department of Economic and Community Development.

“We have a network of highways that run through the state and make it a natural distribution center,” she says, adding that FedEx headquarters in Memphis is another plus.

Like Nissan and Bridgestone, many of Tennessee’s Japanese investors have ties to the automotive industry.

“As the Japanese segment of the overall auto industry grows in America and as more Japanese vehicles are assembled here, there is more opportunity for Japanese suppliers to be close by,” she says.

Recently, Koyo Corporation of USA and Nakatetsu Machining Technologies – both automotive industry suppliers – selected the Washington County Industrial Park in East Tennessee as the site of their latest North American expansion.

David Terdik, assistant plant manager for Koyo’s Washington County facility – which will produce tapered roller bearings – says the labor pool played heavily into the company’s decision to locate in the park near Jonesborough, Tenn.

“We view East Tennessee State University and Northeast State Technical Community College very favorably for building a potential candidate pool,” he says.

Location was another factor in the decision to move here.

“One of the prime draws was logistics,” Terdik says. “We’re close to our suppliers, close to our customers and close to our sister facilities.”

In addition to being a convenient business location, Odom says Tennessee offers a network of resources to help transplanted Japanese families assimilate culturally. She adds the state’s already high visibility among Asian investors could receive another boost in early 2008 when the Japanese Consulate is expected to relocate from New Orleans to Nashville.

For Odom and her colleagues at Tennessee ECD, adding Japanese companies to the state’s economic mix is a classic win/win.

“Most have grown and prospered in the area,” Odom says of Tennessee’s Japanese investors. “They are good corporate citizens, providing good jobs with benefits and good working environments.”

Story by Cindy Sanders
Photo by staff

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