Japanese auto company to invest $1BIL in Tennessee factory

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Japanese automotive parts company Denso Corp. — Toyota’s top supplier — will create 1,000 new jobs with a $1 billion investment to expand its current manufacturing operations in Tennessee, according to a report in the Wall Street Journal on Friday.

Denso produces parts for vehicles with electric engines and self-driving technologies.

Denso’s announcement comes amid the auto industry’s push to get ready for next-generation vehicles with electrified powertrains and partially autonomous driving capability. It’s also the latest in a series of planned investments recently announced by foreign auto makers in the U.S.

“The auto industry is undergoing its biggest transformation in the past 100 years,” said Kenichiro Ito, who heads Denso’s North American operations.

Denso is increasing its footprint in North America to attract more business from Japanese auto makers’ factories in the U.S. and their Detroit-based competitors. Previously known for its production of air-conditioning systems and radiators, Denso is repositioning itself for a shift into internet-connected, electricity-powered and self-driving vehicles.

Ito said that the expanded production capacity will be fully online by 2019 and ready to supply systems to 2020 model year cars.

A partial owner of the parts manufacturing firm, Toyota said in August that it has plans to build a new assembly plant in the U.S. in conjunction with Mazda Motor Corp. Tennessee governor Bill Haslam has been negotiating with Toyota on that front, saying, “We’re very hopeful we’ll be the one.”

Denso officials said they’re investing in Tennessee because the company wants to reach out to multiple Japanese and U.S.-based auto makers. “It’s not just for one customer,” Bill Foy, senior vice president of engineering at Denso’s North American unit, said in an interview.

Looking to break away from its dependence on Japanese sales, Denso also intends to reinvent itself as a high-tech auto industry player.

The company plans to double the size of one of four existing facilities in Maryville, just outside of Knoxville, according to Foy. Denso’s nearly 30-year-old manufacturing operation in Maryville is its largest in the U.S., employing about 3,683 workers. The facilities currently make standard electronic components for vehicles such as alternators, starters and instrument clusters.

Foy noted that the majority of the $1 billion will be spent on retooling for new assembly-line equipment.

“About half of that investment will target engine electrification, with another 25% earmarked for advanced critical safety systems and the remainder to connectivity-related components and other electronics,” according to the WSJ report. “That will lead to production of new vehicle parts such as car-mounted radar modules, engine inverters to convert electrical current and devices to monitor drivers’ alertness.”

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