BANG PA-IN, Thailand — By now, the story is painfully familiar. Like so many other industries back in the 1960s, U.S. firms enjoyed a near monopoly in the manufacture of precision bearings, the tiny steel balls that are crucial to the moving parts of everything from aircraft to videocassette players.
Along came Japanese competition, and the business virtually dried up in America, which today produces less than 1% of the world's bearings. Even those are made by U.S.-based Japanese plants.
Perhaps less well known is the fact that Japan has now been overtaken by Thailand as the world's major producer of precision bearings. One company alone accounts for 75% of the global output of miniature bearings.
The twist is that while the manufacturing may take place in Thailand, the company is still Japanese: a firm called Minebea Co., which early on appreciated the benefits of diversifying overseas.
Like scores of other Japanese companies, Minebea was faced in the 1970s with a desperate shortage of labor at home. It decided to simply relocate the production line, first to Singapore and then, beginning in 1982, to this Southeast Asian nation.
"Minebea has invested in the most advanced bearing factory in the world in Thailand," said Morihiro Iijima, general manager of Minebea Thai. "We bought the most advanced machines from Japan, Switzerland and the United States. We trained our workers to the same standard as in Japan--two of our factories are now managed by Thais. We have taken the view that everything at our Thailand operation should be the same as in Japan."
Now, Minebea is Thailand's largest foreign-owned industrial company in terms of capital investment ($420 million) and the second-largest foreign employer, with 16,000 workers. So powerful and influential is the firm that it has a private waiting room for company VIPs at Bangkok's Don Muang Airport and the only private helicopter allowed in the country.
What happened to Minebea is part of what Japan's ambassador to Thailand, Hisahiko Okazaki, calls "the great relocation of industry" taking place throughout much of the Asia-Pacific region.
"Nobody in Japan wants to work in a factory anymore," Okazaki said. "It's better to use the space as a supermarket."
Japanese industry, helped by a rapid rise in the value of the yen, in the early 1980s started moving manufacturing plants offshore to other Asian countries, first to the newly industrialized countries of Singapore, Hong Kong and South Korea, and then to Southeast Asia.
Places such as Malaysia also have flourished in the boom, with Japanese investment there doubling last year alone, but Thailand has become the real darling of Japanese business.
Now there are 20,000 Japanese business people and their families in Thailand, according to the Japanese Embassy. The Japanese Chamber of Commerce in Bangkok has 900 members, more than any other city in the world.
According to the Asian Bankers Assn., Japanese investment in Thailand rose from $250 million in 1986 to $3.5 billion in 1989. Similarly, the Thai board of investment reported that applications for new Japanese projects totaled $3 billion in 1990, while U.S. firms applied for only $1.1 billion.
Japan is not the only country to have climbed on Thailand's bandwagon. Taiwan, South Korea and Hong Kong have also invested heavily here to take advantage of the cheap and plentiful labor.
Thailand has all the attributes a manufacturing industry could hope for: stability, tax incentives and, perhaps most important, a population of 56.7 million, which promises to provide plenty of workers for the foreseeable future at wages now averaging $120 a month.
As one Japanese businessman noted, Thais are predominantly Buddhist and thus make fewer demands of their employers then Muslims in neighboring Malaysia and Indonesia. In Thailand, the businessman added, men and women work together without cultural problems. They don't fast during Ramadan, and they don't take breaks for daily prayers and Friday visits to the mosque.
According to Minebea general manager Iijima, it was Thailand's availability of labor rather than cheap wages that first attracted his company. Vutichai Udomkarnjananan, a Japanese-speaking Thai who runs Minebea's personnel department, said that when the company's first factory opened in 1982, there were 1,000 applicants for every job.
At Bang Pa-In, the firm's largest facility, 8,727 workers--70% of them women--toil around the clock on three shifts, wearing gray or blue uniforms and Mao hats with the company logo. Like most Japanese companies, Minebea works a six-day, 48-hour week, with one Saturday off a month.
Iijima said that workers at Minebea receive the same flat salary of 4,000 baht ($160) a month, regardless of their job on the factory floor. Higher salaries are paid to "team leaders" and others who have been promoted.
The company provides transportation to work, free medical care and uniforms, as well as a free midday meal of rice.