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Omron copes with 'culture change' in Japan

Posted: 05 Jul 2002 ?? ?Print Version ?Bookmark and Share

Keywords:Omron Electronics? connector? optolectronic? electronic component? MEM?

Economic upheaval and other global developments are driving no less than "a change in culture in Japan," Frank Newburn, president of Omron Electronics, said at a recent press briefing held by the U.S. arm of Japan-based Omron Corp.

Citing what he called the worst downturn he has ever seen, the aftermath of the Sept. 11 attacks and mounting competition from China, Newburn said Japanese companies have come to realize that they must scrap the status quo. "In the past they didn't worry so much about profit margins; they were more concerned about long-term growth. They resisted shutting down plants and laying-off employees. This culture is changing."

Newburn acknowledged major shifts at parent Omron Corp., a $5 billion supplier of electronic components, industrial automation systems and services. "There has already been a 10 percent reduction in head count, some factories are being shut down, and a large percentage of manufacturing is being transferred from Japan to mainland China, where labor costs are much lower," he said.

To be more competitive with China's component manufacturers, Omron has invested close to $45 million in a facility in Shenzhen that came on stream earlier this year, said Anthony C. Tinaglia, vice president of Omron Electronics' Electronic and Mechanical Components Division. The operation is equipped to produce electromechanical relays, switches and connectors, primarily for local appliance and communications equipment manufacturers but also for global export. The site, which is expected to employ close to 2,500 people by early 2003, is an expansion of Omron's operations in China. The company has produced components in Shanghai since the early 1990s.

Tinaglia said the new facility will help Omron cope with the spiraling price competition in the components business, particularly in pc-board relays. "It's been a very difficult period," he said. "We climbed very high in early 2000, when there were lots of components shortages. Then we hit bottom in 2001, when there was excess inventory everywhere."

Going forward, Tinaglia said, the company will aggressively pursue new offerings in such areas as high-frequency relays, electronic sensing components, power relays, fine-pitch and flat-ribbon connectors, and optoelectronic devices.

Tinaglia said he is particularly excited about a range of new microelectromechanical systems that Omron has in the pipeline. He said the company will have more to say about the MEMS products toward the end of the year or early in 2003. Omron currently offers MEMS micropressure sensors, microtilt sensors and filter sensors for cell phones and digital cameras.

Also on the horizon are new standard pressure and vacuum sensors, as well as micromagnetic and ultrasonic sensors for the fuel cell industry.

Omron's Industrial Automation Division, meanwhile, will pursue the end-user segment of that market, division vice president Rob Loomis said.

Loomis said the division is focusing 30 percent of its field sales resources on the end-use segment for its automation products and services. Products include the Omron CJ1 programmable logic controller and the Omron CSI PLC with redundant controller.

? Martin Gold

EE Times

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