Day 9: LG Electronics

Our last day started with a fascinating place, LG Electronics. The LG stands for Life's Good and their company motto is Great Company – Great People. And that alone should tell you something about this business. It was unlike anything I have ever seen. The interior and exterior of the facilities were beautifully designed and the landscaping and architecture amazing. The factories are totally high tech. Retina scanners are used to provide access to employees. Employees are provided with 3 meals a day and there is a soccer field for recreation during the day or after work.

LG Electronics has been in operation since 1958 and their goal is to be one of the top 3 electronics manufacturers in the world by 2008. I think they will make it. They have sales of $43 billion and over 130,000 employees world wide. In addition to the facilities in Korea they have manufacturing plants in India, China, Mexico and Brazil. They manufacture air conditioners, plasma screen televisions, home theater systems, DVD players, laptop computers, and phones. Their largest market is Korea with 25% of their sales followed closely by North America with 23%.

Some of the electronics they are manufacturing are currently not available in the U.S. We saw a video game phone that uses motion sensors to play the video games. All you have to do is tilt the phone in a direction based upon the game to move the animation or character instead of pressing keys or buttons. There are also phones that have scents such as lavender and chocolate. And one that has an alcohol breath test included. You breathe into a little hole and it tells you your score and indicates if it is safe to drive.

It truly is a Great Company with Great People!

Our final stop of the day was a reception at KUSEC, which is similar to what we would find with a chamber of commerce. The organization represents businesses and works on economic development. Our reception was at the top of the Intercontinental Hotel so the view was spectacular. From the roof it was easy to see how Seoul has grown just in the past 10 to 15 years to become a very cosmopolitan city with expansive boundaries.

The reception was a good opportunity to meet more Korean business people and learn more about the types of enterprises in Seoul. As we left and concluded our mission there was a great sense of excitement about the opportunities in Korea. We all shared a view that the country is poised for tremendous growth and all indications are they will accomplish their goals.

Day 8: South Korea and the Rotary Club

We began the morning with a briefing by the American Embassy. We learned that there are 3 things that the country is focusing on: external issues, domestic politics, and representation of Korean/US Forces.

The external issues continue to be the relationship between North and South Korea. The Six Party Talks continue with the U.S., North Korea, Japan, Russia, China and South Korea. These have been focused on trade and political strategies.

Regarding domestic politics, the most recent election left the ruling party with almost a 4000 seat loss which is foreboding of things to come for the presidential election later next year. The opposition party is being run by a woman and there is also a former prime minister who is thinking of starting a 3rd party.

South Korea continues to have a significant number of U.S. troops in the country. There are currently 25,000 but they hope to continue to reduce this number.

South Korea has the 10th largest economy in the world and is the 7th largest trading partner of the U.S. They have been called "the shrimp between two whales" with the whales being China and Japan. They continue to have free trade talks with the U.S. Another one is scheduled to take place in Washington, D.C. in July. They believe that reaching a free trade agreement would be good for both the U.S. and South Korea.

The top three products imported from the U.S. are corn, pork, and hard woods.

The country is very media intensive and has rapid news cycles. They have six newspapers that are equivalent to the Wall Street Journal and three television news sources that are similar to CNN. As a result there is great pressure to "get the news" and sometimes accuracy takes a back seat to being first. Most large companies had what they call a media advisor who is responsible for sorting out the facts from what is being reported.

South Koreans are very entrenched in the U.S. educational system. They have more students in the U.S. than any other country in the world. Student visas are very important to them, and they encourage U.S. educations because to get to the highest levels in Korean businesses a person must speak English.

South Korea is looking to expand research and development and manufacturing in the U.S. They currently have a significant presence in North Carolina and Texas, but were attracted to Indiana because of the close proximity to Chicago.

Our lunch meeting was at the Rotary Club. It has a rich history of over 100 years in Seoul. Their youngest member is 46 years old. I was fortunate to meet a Four-Star General and a former speaker of the National Assembly. The membership is comprised of incredible men of an older generation many who were schooled in the U.S. and some in Indiana. One of the members recited the Gettysburg Address before we had our lunch. It was fascinating to learn that such an organization exists and thrives in Seoul.

Day 7: Visiting the DMZ

Our day today was spent touring the demilitarized zone (DMZ). This of course boarders North and South Korea. As we drove along the highway there are miles of wrapped barbed wire, snipers, and soldiers guarding the zone with machine guns. There are land mines throughout the DMZ that are still active and dangerous. As a result you cannot walk freely in the DMZ.

Almost 500 people live in the DMZ, mostly farmers. It is a constant danger due to the land mines. In fact, a farmer had been killed very recently by a land mine exploding. You can see the craters they create when they explode.

The DMZ was created after the war to keep the countries separate. Since the separation the South Koreans have discovered 4 tunnels that were used by the North Koreans to march troops into Seoul. We toured one of the tunnels and learned that generally they are 52 kilometers long and that the North Koreans would put coal on top of the ground to make the tunnel and digging look like a coal mine. One of the tunnels was capable of passing 30,000 troops per hour into South Korea.

There are ongoing discussions about reuniting the countries, but it seems that they have far to go. As you look across the boarder the landscape is absent of trees. We were told that is because the North Korean government does not provide any aid to the citizens for fuel so in the winter they cut down the trees to provide heat. Additionally, we were told that offers to provide food aid have been turned down by the government.

There is a great deal of propaganda surrounding the demilitarized zone and the views expressed by North and South Korea. It makes it hard to tell if progress is being made, but they seem committed to continuing to work toward a better relationship.

Day 6: Arriving in Seoul

We left very early in the morning for Seoul, South Korea. South Korea is a country about the size of Indiana but with 49 million people, 11 million of which live in Seoul. The scenery is very lush and green. There are many new buildings and interesting architecture, especially the bridges that dot the city crossing the many rivers. They are all different and unique in style and color.

Since most of our day was spent traveling, our only event for the day was an evening dinner at Korea House. We had a very traditional Korean meal consisting of 12 courses including vegetables, beef, noodles and much more.

After dinner we were entertained by a traditional Korean dance performance. The musicians used traditional instruments and the dancers wore historic costumes and performed some of the native Korean dances.

Day 5: Tsuskji Fish Market

Our day started early with a trip to the Tsuskji Fish Market. Two thousand tons of fish, vegetables and flowers move through this market each day. Everything is sold by auction to over 800 businesses that come to the auction. Everything is very fresh and so even with all the fish in the market there is no odor.

We saw a 1,400 pound tuna that sold for the equivalent of $7,000 U.S. dollars. Most tuna are around 400 pounds. To test the quality of the fish, an area by their tails is sliced and the buyers come by and pull up the flap and evaluate the fish, even tasting it in most cases. The fish are sold through auction but also through negotiations. Approximately 14,000 people work in the market everyday so it is certainly a very active, fast-paced and vibrant place.

Several individuals in our delegation met with Mitsisui Mining and Smelting and Keihin IPT Manufacturing, Inc.

We attended a dinner reception in the evening at the ambassador's residence. The home was beautiful with a wonderful walkway leading up to the residence and well-maintained landscaping. The Governor announced two new initiatives for a total of 200 jobs in Indiana and a $100 million capital investment in the state. The companies are NTN Driveshaft and Keihin IPT Manufacturing, Inc., an automotive components manufacturer. This is wonderful news for Hoosiers and indicative of the strong relationships we are building here.

Tomorrow we are traveling to Seoul, South Korea.

Day 4: Exploring Tokyo

Today is really a "day off" for us and has been set aside for individual meetings that have been arranged by some of our delegates. E. Roy Budd of Energize-ECI and Dan Canan the Mayor of Muncie were about to schedule a number of meetings with Japanese executives that we have met on our mission. Their objective is to further explore possibilities between Japan and Indiana.

One important thing that did take place today was that Governor Mitch Daniels unveiled the "Premium Indiana Forest Products" logo to the Asian market in a news conference at the Gallery Mori no Kotoba, a furniture market in Tokyo. The logo identifies products made from Indiana hardwoods and is a global marketing campaign to promote the use of Hoosier forestry products.

Indiana hardwoods are of very high quality so very attractive to the Japanese. Hardwoods is a key part of the state's economic development strategy.

As I have had some time to spend in Tokyo it continues to show me the marked contrast between this city and some of our large cities in the United States. The city is so clean and orderly. The cars are clean, the streets are clean, and the people are impeccably dressed. Everyone is very fit. I have not noticed anyone overweight or out of shape. There is a tremendous amount of organization from the taxi cab lines to the umbrella stands in the hotels and major buildings. Even the parking attendant in a public garage I walked by was wearing white gloves and a tie. Something you would not likely see in a city in the United States.
When ordering in restaurants here all the waiters carry handheld computers. The order is not written on paper but entered into the computer and then transmitted to the kitchen. And as with everything else the service is amazing.

It has been nice to have a day to learn more about the lives of Japanese citizens to round out the image I am developing of Japanese business.

Day 3: Fuji and Toa Industries

Ota City was our destination today. Our method of transportation was a bus.

It is the rainy season so there are umbrellas everywhere. In fact, there are clear umbrellas available for the taking at most hotels, restaurants, and businesses. These clear umbrellas can be used and then dropped off at the next destination of the user. Anyone can use them and many of them have likely made their way around the city several times!

Our first stop was the Fuji Heavy Industries Plant. Ninety percent of their sales are automobiles with the rest being engines, transmissions, and parts. The plant was established in 1960 and manufacturers 500,000 cars and 700,000 engines and transmissions per year. They are very concerned about environmental issues and in fact have a zero emissions plant.

Every day the plant plays host to 700 school children. The groups of children are given different colored caps to wear so that they can easily be spotted and grouped. They view the children as future consumers and workers so they are treated very politely and well by all employees of the plant during their tours. Our group had to wear caps as well so that they could keep track of us.

In the tour room of the visitor center there was a race car with photos from the Indianapolis Motor Speedway. It was interesting to learn that the car was the Forester Hulman Trophy winner in the 24 Hour Challenge.

In addition to seeing how the manufacturing processes worked we also had the pleasure of seeing a robot that plays the trumpet. Air compression technology is used to "play" the trumpet and the robot appears to be pressing the keys. The robot plays Disney songs all day long and never tires or needs to take a break.

From here we participated in a Friends of Indiana Reception in Ota City where around 100 Japanese business leaders were in attendance. Our experience continues to be that everyone is very welcoming to us, interested in learning more about how to work with businesses and industries in Indiana, and encouraging about the opportunities for our state.

Our last stop of the day was Toa Industries. This is a private business that was established in 1944 and manufacturers automotive parts and housing materials. I've noticed that many Japanese businesses have quite a mix of products unlike American businesses that tend to focus in one particular industry or even industry segment.

Toa Industries has a facility in Mooresville that employees 234 people. Every month 2 employees from Mooresville are sent to Japan to be trained. And we met the two people who were there from Mooresville.

As we concluded our day and prepared to leave Ota City, as was the usual custom at all of our other stops, all the executives of the company and people we met, bowed to us and then lined up and waved us all good-bye. It is a very ceremonial and gracious culture based upon formal protocol and order.

Day 2: Toyota and Aisin

Our day started early with a train trip to Nagoya which is deemed the "Toyota Capital of the World." I was surprised to learn that Toyota got its start as a looming and weaving business. The founder of Toyota's family name is Toyoda. There are two stories about why the name was changed to Toyota. One is that the family wanted the company to be more community focused and not only linked to the family. The other is that it was a marketing decision because Toyota with the "t" is easier to pronounce and write.

From their initial establishment in 1926 Toyota has grown to a worldwide corporation with $18 billion in net sales. And now of course their main focus is in the production of automotive parts and vehicles including material handling equipment which accounts for 40% of their business. They produced their first car in 1956.

From Nagoya we headed to Takahama and another Toyota manufacturing facility. The remarkable thing about the train trip was the interspersed rice fields with tall buildings and manufacturing facilities.

At the manufacturing facility at Takahama we learned how the process differs from our processes in the U.S. The Japanese celebrate finding a problem. Their focus is then to work together to fix it. They meet and talk every day about any problems that the workers are finding. They use what is called a Kizan Structure which means that they focus on the bottom-up not the top-down. All workers provide feedback about what can be done better. They then build strategies around the ideas that make sense. Their focus is on team goal setting and accountability to meet the goals.

One thing they pointed out to us is that when Japanese return a product that has a defect they don't want to be told "go pick out another one." They want to understand how the defect happened and what the company has done to fix it.

From here we headed to Aisin an affiliate of Toyota. We met with several key executives and board members. The chairman of the board is someone from the Toyoda family. Aisin manufacturers transmissions, brakes, cooling and lubrication systems, door frames and latches, and car navigation systems. They have 8 locations in Indiana and employ 3,510 people statewide.

Our last stop of the day was the Toyota plant in Tsutumi. This is an amazing place that produces 2 cars every minute. We saw them build a Toyota Camry. The facility uses a great deal of automation and robotics technology for the assembly. Unlike some of the manufacturing processes in the U.S. they don't build just one type of car. They can build different models one right after the other. There is great attention to accuracy. If there is uncertainty workers can turn on a light and others will come to evaluate the situation to determine if the quality is acceptable.

At the end of a long day I kept thinking about all the times I had heard them play the song "It's a Small World After All." It was a favorite tune for all of our tours, but perfect in a way to describe what we learned about the relationships that exist between the Japanese and the residents of Indiana.

Day 1: Sony and Mitsubishi

I began to realize that I was well on my way to Japan when on the plane I had menu choices like scallops in miso vinegar, taro with minced chicken sauce, Japanese pickles, and green tea. Our delegation prepared to visit Sony and Mitsubishi as the first stops on our trip.

Over 200 Japanese businesses have operations in Indiana and provide 41,000 jobs. There are also 4500 Japanese citizens who live and work in Indiana. These facts alone made us all realize the importance of our trip and the strong relationships that Indiana has with the Japanese business and political communities.

Our first meeting was with Sony to thank them for the business they bring to Indiana. Attending our meeting were Naotumi Hara, senior vice president corporate executive of corporate communications and external relations and corporate social responsibility and Shiro Koike, executive deputy president of Sony. We learned of their development and use of Blue Ray technology. For this technology Sony has spent $100 million for DVD and CD production. The plant in Terre Haute is one of only two in the United States that has the capability for this type of production.

Sony stressed that they always make a commitment to the community and look at ways they can be involved. The plant in Terre Haute has always been profitable.

Our next stop was with Mitsubishi Corporation. In addition to the recent expansion plans of Indiana Packers, a subsidiary of Mitsubishi, the company announced that they will add an additional 125 jobs at the Delphi, Indiana facility. This expansion is a joint venture between Mitsubishi and Itoham Corporation. Together they will invest more than $43 million to expand the plant capacity. This is an important step toward meeting the State's goal of doubling hog production in Indiana.

We ended the day by dining in a German restaurant! Being a cosmopolitan city, this is not really unusual, but somewhat surprising. Because of limited space there is a whole "city beneath the city" in Tokyo. Under the trains are a whole series of bars and restaurants. This is where we found ourselves and enjoyed a wonderful German meal. The city is truly vibrant, very compact, and amazingly organized to accommodate a large number of people in such a small space.