NEWS RELEASE 　　　　　　　　　　　　　　　　　　　　　　　　　　　CONSULATE GENERAL OF JAPAN

Contact: Hiroshi Iwama 　　　　　　　　　　　　　　　　　　　　　　　　            April 26, 2002
　　　　　 Bill Christensen
　　　　　 312/280-0400

Japanese Facilities Provide More Than 92,000 Jobs
in Four Midwest States in 2001

              The results of the 2001 survey of Japanese direct investment in four Midwest states under the jurisdiction of the Consulate General of Japan at Chicago are as follows:

Facility Number

In 2001, 943 Japanese facilities were located in Illinois, Indiana, Minnesota and Wisconsin, which represents a 5.6% decline from the previous year.  This decrease continues the slight downward trend that began in 1998 as the facility number has fallen by 9.5% in the last four years.  In 2001, the facility number declined in electronics manufacturing; commercial trade; finance, insurance and real estate; and services.  Moreover, the 266 actual manufacturers, which account for 28% of the total facilities, decreased by 4%. 

Employment

Employment, while remaining at a high level, also weakened.  In 2001, Japanese facility employment totaled 92,110 positions, representing a 5.9% decline over the previous year.  This marks the first time in the last 15 years that the overall employment decreased. 

The decline can be attributed mainly to the U.S. acquisition of the Japanese ownership share in medium-size and large-size companies in three sectors:  finance, insurance and real estate; metal manufacturing; and electronics manufacturing.  While the survey reports a 5.9% decrease in American employment at Japanese facilities, those jobs were actually retained under new U.S. ownership.  Although comparatively small in number, Japanese employment declined by 6.5%. 

Employment at actual manufacturers also declined by 5.9% to 49,430 positions, again due largely to the U.S. acquisition of the Japanese ownership share.  The manufacturing positions represent 54% of the total employment.  Overall, American employees accounted for 97% of the total employment at the Japanese facilities. 

Key Sectors

Manufacturing, which comprised 59% of all facilities, led the direct investment initiative, followed by commercial trade, 17%; and transportation and warehouse, 8%.  Motor vehicles and parts together with electronics were the primary manufacturing sectors.  Further, overall manufacturing provided 87% of the total facility employment.  Motor vehicles and parts accounted for 43%; and electronics, 8%.  The four states constitute a key manufacturing center for Japanese direct investment in America. 

State Role

Illinois continues to be the largest direct investment recipient with 70% of the total facilities.  The state’s facility number decreased by 6.1% and employment declined by 8.0%.

Indiana is home to 20% of the total facilities.  It is the leading recipient of production facilities with large employment, particularly in the motor vehicle and parts sector.  In 2001, the state’s facility number decreased by 4.0% and employment declined by 5.3%.  In the last five years, Indiana has led the four state area with a substantial increase in actual manufacturing employment.

Minnesota accounts for 6% of the total facilities and leads the four state region in its share of electronics companies.  The state’s facility number and employment declined by 6.9% and 3.9% respectively.

Wisconsin has 4% of the total facilities.  While the facility number declined by 2.6%, overall employment jumped 24%.

Geographic Distribution

As illustrated by the maps, the facilities are located both in the major metropolitan areas and in rural areas.  In Illinois and Indiana, they are distributed throughout the state.  In Minnesota and Wisconsin, they are centered in Minneapolis and St. Paul as well as in Milwaukee and Madison.

The largest facilities, with more than 1,000 employees, are located near medium-size and small-size communities in the rural areas.  In Indiana and in part of Illinois, the facilities are located along the interstate highway system, which reflects the importance of the transportation network in investment decisions.

Five-Year Trend

From 1996 to 2001, the four state region has remained home to approximately 1,000 Japanese facilities, although the number has declined slightly since 1997.  By sector, the facility number has increased in motor vehicles and parts as well as chemicals while a decrease has occurred in finance, insurance and real estate;  commercial trade; and services.  Overall employment has increased by some 2,700 positions and actual manufacturing employment has risen by 3,900 jobs in the last five years.  By sector, motor vehicles and parts as well as pharmaceuticals have experienced significant employment increases while finance, insurance and real estate; commercial trade; and services have reported employment declines.  

Significantly, actual manufacturers are now the key component of Japanese direct investment in the four states.  The high paying, high skill positions at the manufacturing facilities are particularly important since employment opportunities are more limited outside the major metropolitan areas. 

Economic Cooperation

Both the Midwest and Japan benefit from this close relationship.  The four state area is particularly attractive to Japanese companies due to its large consumer market and its centrally located transportation network, which facilitates the shipment of parts and finished products across America.  In addition, with the region’s heavy industrial base mirroring that of Japan, it offers key resources including a highly skilled labor force, available parts and raw materials.  In return, Japanese facilities provide jobs in both urban and rural areas, source components from U.S. companies, facilitate technology transfer and furnish new revenue sources to help boost both state and local economies.

Statement

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