AUTOS : Nissan May Give U.S. Firms Design Role

Nissan Motor Co. said Tuesday that it wants to boost purchases of U.S. auto parts by involving more American companies in its design process.

Nissan explained its parts procurement system at a seminar for 50 American suppliers in an effort to overcome differences in American and Japanese business practices.

Under pressure from the Bush Administration, Japanese auto makers pledged last month todouble their purchases of American auto parts in the next two years.

Nissan said it will try to buy $3.7 billion a year in parts from U.S. suppliers by 1994. Of that, $800 million worth is to be used at its Japanese factories and the rest at its U.S. plants.

U.S. auto makers usually design parts, then ask suppliers for bids. Japanese companies provide general specifications to suppliers, then expect them to design the parts as the car is being developed.

Companies that are not long-term suppliers generally are relegated to providing low-profit “off-the-shelf” components rather than custom-designed parts, since development takes as long as four years.

“Our intent is to begin to draw the U.S. companies into the design process,” said Jim Gill, a Nissan spokesman.

Meanwhile, Nissan President Yutaka Kume said he has “full confidence” in U.S. workers. Products made at Nissan’s plant in Smyrna, Tenn., “are as good as those we turn out in Japan,” he said.

Kume said both countries should make more efforts to reduce their trade imbalance, three-quarters of which involves the auto sector.

Japanese politicians have created a storm of protest in the United States with comments charging that American workers are uneducated and that America is losing its work ethic.

Kenichi Idoji, manager of Nissan’s international purchasing department, said Nissan has formed a team to advise U.S. suppliers on how to improve quality and design capabilities.

“Some American suppliers have sufficient design capability, but not all,” he said.

Other Japanese auto makers are considering similar steps.

“Years ago, I had to go around teaching Japanese parts makers how to maintain quality. Now I guess we’ll have to do the same thing in the United States,” Koichiro Tamai, executive vice president of Mitsubishi Motors Corp., said recently.

Tamai had predicted that an increase in parts that Mitsubishi has committed to buying from the United States would result in additional recalls of vehicles.

He said faulty American-made fuel injection equipment cost Mitsubishi $24 million and bad semiconductor chips $1.6 million.

Several of Nissan’s most successful U.S. parts suppliers stressed the need for high quality and a long-term commitment to the Japanese market.

“Political pressure raises the awareness in both Japan and the United States of the fact that there is a trade imbalance,” said Roger Harker, general manager of Timken Co., a bearing maker. “But the long-term solution has to be between businesses. You have to prove that you have the capability of being a long-term supplier.”