Machine tool makers boost partnerships

Japanese companies, Jtekt Corp. and Mori Seiki Co. are among the leading machine tool makers stepping up alliances outside Japans auto industry, in a bid to expand their customer bases and diversify earnings sources. The moves were prompted by dismal profit growth prospects amid sluggish orders from carmakers and intensifying competition. In order to enter the market for machining centers, which are used to fabricate parts for home appliances and other equipment, it invested in a Taiwanese manufacturer last year. The Toyota Motor Corp. affiliate has also turned a small Yamagata Prefecture manufacturer known for its machining centers into a subsidiary after acquiring a 100% stake. Jtekt will use this new subsidiary as a main production base. Meanwhile, Mori Seiki has begun outsourcing the production of numerical control lathes, which are used in various industries, to mid-size counterpart Howa Machinery Ltd. Howa will churn out 30 low-cost units monthly at its main plant in Aichi Prefecture. (June 2, 2008)