Mori Seiki breaks ground on first North American manufacturing plant
Location, exchange rate factors in machine tool company’s decision to build in CA.
Mori Seiki broke ground on a 200,000-square-foot factory to be situated on 14.5 acres in Davis, CA in June. The plant will be Mori Seiki’s first manufacturing facility in North America, and will employee between 100 and 150 people.
At capacity, the new facility will produce as many as 100 units per month, focusing on the popular new X-Class line of precision machines. “Our initial targets are our horizontal machining centers – the X-Class NHX4000 and NHX5000 Series,” says Mark Mohr, President of DMG / Mori Seiki USA. “Our next product under consideration is the DMU 50 and potentially other X class machines.”
The plan of locating a new manufacturing facility in the United States is based on the possibility of the continuing decrease in the exchange rate between the U.S. and Japan. “If the value of the U.S. dollar declines, it will become fiscally advantageous to manufacture machine tools in North America, eliminating the cost of importing from Japan,” said Dr. Masahiko Mori. The addition of a new North American factory is expected to offset any disparity in the exchange rate between the two currencies and would ensure Mori Seiki customers the continued quality, precision and value they have come to expect in their machine purchase.
Mori Seiki currently operates a total of four factories in the Nara, Mie and Chiba prefectures of Japan. The company’s manufacturing presence in North America builds upon an existing overseas unit in Le Locle, Switzerland (DIXI Machines). Mori Seiki acquired DIXI in 2007 to manufacture and market products under the DIXI brand, but also to expand its capacity in order to manufacture and sell Mori Seiki branded products.
Manufacturing in the U.S. enhances the company’s existing infrastructure in North America. Engineering operations are already established in the U.S. at the Digital Technology Laboratories in Davis, CA. Software and machinery has been designed at DTL since 2000, when the group was launched. Today, the group boasts more than 80 employees; the creation of a North American manufacturing plant creates further opportunity for R&D collaboration in the U.S..
The Davis site offers several other advantages as well. “The west coast location makes it very easy to work with our Japanese colleagues,” says Mohr. “For instance, we will be importing ball screws and spindles from our own manufacturing facilities in Japan—not for purposes of cost saving, but because they’re simply the highest quality.” The nearby UC-Davis and Berkeley campuses ensure that the available workforce is also top-quality; the area is regarded as a proving ground for the latest advances in technology, engineering, and computer sciences.
The addition of the new North American factory will raise Mori Seiki’s total monthly output capacity by approximately 100 units to slightly more than 900, preparing Mori Seiki for the anticipated global expansion of machine tool sales in the coming decade. Construction is slated for completion in fall of 2012.