Japan makes it small in US
| Los Angeles
MUNEAKI UEDA isn't bashful about his aspirations for his employment agency, Persona Inc. ``My plan is to have 100 branches in 1990. In 10 years, my goal is to be competitive with the best - Manpower, Kelly.'' Small as it is now, Persona moves with the boldness of an upstart Yankee company. But it is Japanese - a division of the Tokyo-based Temporary Center Corporation. Persona came to the United States in 1985 to meet the employment needs of Japanese businesses in the Los Angeles area. In just three years, it has set up seven offices on the West Coast and another in New York, and has expanded its services to include consulting, training, and executive recruitment.
Persona is just one of a wave of small companies that has recently swept across the Pacific from Japan. At least 50 small and midsize Japanese firms opened new offices in the Los Angeles area last year, estimates Aki Tsurukame, a consultant to the Japanese business community in southern California.
Just as small American companies have begun to venture overseas, ``in the last two to three years, even small Japanese companies have started to come to the US and other countries because the business scene is making a change,'' explains Mr. Tsurukame. ``It's becoming a borderless society.''
Among the transplants are Silver-Reed (USA) Inc., which makes electric typewriters; Kyowa America Corporation, which makes plastic parts for automobiles and consumer electronics; and Amano American Manufacturing Inc., which makes parking meters and time clocks.
Many of these companies come to escape the pressures of the soaring yen, which makes the price of products made in Japan less competitive. The yen has risen as much as 40 percent in the last three years.
``A lot of the damage of the endaka, or `yen shock,' doesn't happen to the big companies, it happens to the small ones,'' says Joel Kotkin, author of the recent book ``The Third Century: America's Resurgence in the Asian Era'' (Crown).
``We think of Japan as being these big, big companies that dominate everything,'' Mr. Kotkin says. ``But when you look at a Japanese product, it actually has more small-business components to it than an American product. A Toyota could be as much as 70 percent made up of things from subcontractors, which is much more than you would find, let's say, in a GM car.''
When the yen rose against the dollar, Kotkin notes, ``all of a sudden these big companies were saying to their subcontractors, `Hey, you've got to reduce your costs 30 percent.' And these guys didn't exactly have big margins to start with.''
By setting up operations here, small Japanese manufacturers not only escape the exchange-rate squeeze, they also bypass US import restrictions.
Other small companies - young venture businesses - are lured here by the responsiveness of American consumers, who are less brand-conscious than the Japanese. ``Small Japanese companies find sometimes they can get accepted here faster than they can in Japan,'' Kotkin says. ``Americans will buy a good product from anybody, and they don't really care that much about, well, is this really a Hitachi or a Panasonic.''
Then there are companies like Persona - service companies, ``which have been growing like crazy in Japan,'' Kotkin says. ``For those people, getting into the US is key, because the US service economy is so much more developed than the Japanese.'' Recruit USA Inc., a publishing and telecommunications company; Transport USA Inc., which transports small packages between Japan and the US; and CST Communication Company, which invests in American films, are among the recent transplants that have found ready markets here.
Persona's arrival in America is a step in the internationalization its parent company, Temporary Center, began four years ago. And it has brought Japan's finely tuned service ethic with it.
The employment agency's luxurious ground-floor headquarters in the Wells Fargo building here is a far cry from the dingy digs most job hunters are familiar with. It even has an art gallery. ``In this office we are quite different [from other companies],'' says Mr. Ueda, Persona's president. ``We are spending a lot of money on atmosphere. As in Japan, we have offices in the best locations - very beautiful, prestigious, comfortable offices. We have a clear policy to use two-thirds of the office for job candidates. Employees use the other third.''
Job applicants must pass a 45-minute battery of tests in typing, math, filing, and spelling. Ueda claims these tests are stricter and more extensive than those for most American employment agencies.
Once hired, the candidates are treated like family members. The staff takes great care in performing what Ueda refers to as ``the little courtesies'' - early-morning wake-up calls to candidates and follow-up calls to client companies, thank-you notes, birthday cards and gifts, newsletters. And once a month Persona rents a room in a hotel and throws a buffet dinner party for its candidates.
Ueda concedes that his agency may have a smaller profit margin than American competitors. ``We are always working on long-term business. That is characteristic of Japanese companies. Our policy is not too much profit. Most of the money we earn should be returned to the society. If we get 25 percent of gross profit, we spend 5 percent on service to applicants, 5 percent for expansion.''
Should the United States worry about the competition small Japanese businesses bring? Not necessarily, Kotkin says. Not only are these companies transferring assets - computers, money, and personnel - into this country, they are also bringing knowledge that will ultimately strengthen American businesses.
``There are a lot of very good things that you can learn from working with the Japanese,'' Kotkin points out. ``We've always thought of technology transfer in the very narrow sense of actual machinery process. But a lot of it is how you manage people, work habits, attitude.''
What disturbs him is that ``a lot of Americans consider it threatening to be learning from Asia, whereas learning from Europe is OK. I think we have to understand that Asia is probably where we're going to get most of our lessons in the future.''