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What do Trains, Planes, and Automobiles Bring Us for New Life?

• A business luncheon, “Trains, Planes and Automobiles: Current and Future Trends in the Transportation Industry in Japan and the U.S.”, was held on March 23 at the Union League Club of Chicago. The event was part of the NAJAS/KKC Business Speaker Series sponsored by the National Association of Japan-America Societies and the Keizai Koho Center.
• M.C. Edward Grant, former president of the Japan America Society of Chicago welcomed speakers. They were Grant Crampton, Chief of Staff of IT Infrastructure in the Boeing Company; Hiroyuki Idei, Executive Vice President of Nippon Sharyo U.S.A., Inc.; David Yamada, Manager Engineering and Marketing Support of Nippon Sharyo U.S.A., Inc.; and Koki Konishi, Managing Officer and Chief Officer of Technical Administration Group of Toyota Motor Corporation.

• In his greeting remarks, Consul General of Japan Toshiyuki Iwado said that Japanese business executives often mentioned that a key factor in their direct investment decision was the transportation network. He also pointed out the importance of the transportation network as a business lifeline, which was closely linked with cities in Japan and the U.S. through US-Japan business activities.
• Consul General Iwado welcomed the speakers and said, “They will tell us about how the transportation industry can benefit Japanese and U.S. companies, our bilateral trade, and our society.”

• View from the Flight Deck: Trends in Air Transportation

• Grant Crampton of Boeing Company spoke about three topics: Boeing and Japan, Boeing’s current market outlook, and future technology.

• Boeing opened its office in 1953 in Japan and currently has 230 employees in 40 different sites across Japan. Japan has purchased more than 80 % of commercial airplanes from Boeing. Japan’s Ministry of Defense also has had a business partnership with Boeing since 1950s.
• So far, 65 Japanese companies are suppliers to Boeing, and many of them designed and built 35 % of the 787 Dreamliner, including crucial parts of the airplane.

• Airplane Market Outlook for the Next 20 Years

• The total number of commercial airplanes in the world is expected to double over the next 20 years. According to Boeing’s current market outlook (2015-2034), 38,050 new airplanes will be delivered, and their total value is $5.6 trillion. The current number of airplanes is 21,600, which will increase to 43,560 by 2034.
• The emerging markets to lead the growth are in the Asia Pacific region. The outlook predicts that 14,330 new airplanes will be delivered in the region, and their total value is $2.2 trillion. The current number of airplanes is 5,850, which will increase to 16,180.
• In the North America region, 7,890 new airplanes will be delivered by 2034, and their total value is $940 billion. The current number of airplanes, 6,700, will increase to 9,350.
• Among new airplanes, single aisle type of airplanes will grow in the market. About 70 % of new airplanes will be this type.
• Boeing predicts 6 % traffic growth that brings 180 million more passengers and that requires 900 more airplanes.
• Boeing’s market outlook is published through its website http://www.boeing.com.

• Looking ahead to expanding the future market, many considerations should be taken into account such as worldwide commerce, emerging technologies, and business-model innovation. Crampton noted that quality of service, including new nonstop city pairs and greater frequencies, was especially important.

• Air Traffic Technology

• The Federal Aviation Administration’s NextGen program has invested billions of dollars into modernizing air traffic control systems, which brings better and safer air travel. Details of NextGen are available at https://www.faa.gov/nextgen.
• Another important technology that Crampton mentioned was ADS-B (Automatic Dependent Surveillance-Broadcast). It uses a combination of satellites, transmitters, and receivers to provide both flight crews and ground control personnel with very specific information about the location and speed of airplanes in the area.

• The Infrastructure of Life

• Hiroyuki Idei and David Yamada of Nippon Sharyo U.S.A., Inc. spoke about “The Infrastructure of Life.” It was the perspective of building a society that was integrated with public transportation.

• Nippon Sharyo, a railcar maker, was founded in 1896 in Nagoya, Japan. The company is well known for building railcars for Shinkansen bullet train since 1962 and celebrated the completion of the 3,000th Shinkansen railcar in 2010.
• Nippon Sharyo U.S.A. opened its headquarters in New York in 1982 and moved it to Arlington Heights in 2002. The company has delivered more than 1,000 railcars in the U.S. and had a strong partnership with METRA Chicago.
• With the completion of Shop 3 in the Rochelle plant in 2014, Nippon Sharyo U.S.A. has produced 100 % made-in-America railcars and contributed to the American domestic market.

• Since President Obama signed the American Recovery and Reinvestment Act of 2009, the passenger rail industry has seen its growth increase. It’s a great opportunity to build a society with public transportation.
• In Japan, more than 50 % of travelers use rail transportation when they travel the distance of 300 km (187.5 miles) to 700 km (437.5 miles); on the other hand, train usage is very low in the U.S.
• High usage of rail transportation has brought economic development to cities that are connected by trains. For example, Tokyo station is developed to offer many different services to passengers such as shopping and dining in the underground malls, easy walking paths to their offices, and entertainment.
• The feeder networks are well developed. Tokyo network covers 23 million people while Osaka network covers 19 million people. Those networks enable passengers to commute to their work places or travel to anyplace in the city.

• Tokyo and Osaka are connected by Tokaido Shinkansen, one of the most successful lines. It covers 343 miles in two hours and 22 minutes, so a business person can attend a meeting in Osaka and return to Tokyo in the evening.
• The distance between Tokyo and Nagoya is 227 miles, and it takes one hour and 39 minutes. It is about the same distance between New York and Boston, which takes three and a half hours by rail.
• Shinkansen trains depart from Tokyo station every few minutes; 342 daily departures, 10 in each direction per hour. About 330,000 passengers use Shinkansen every day, and an average of annual delay is 54 seconds.

• To make successful integration of life and transportation, considerations are:
• Passengers demand convenience. They want the best solutions such as convenient schedules and comfort.
• Existing infrastructure limits planning. It’s difficult to redesign an existing city. Environmental issues and existing transportation are considered for the development.
• New development will take advantage of a fully integrated system.
• Financial viability will be dictated by ridership.

• Toyota’s Operation and Energy Diversification

• Koki Konishi of Toyota Motor Corp. spoke about Toyota’s operation, activities, and energy diversification.
• Toyota started selling cars in the U.S. in 1957. Today, Toyota’s share is 15 % and has 10 plants across the U.S. The plants have employed 34,000 workers and created 365,000 related jobs. The dealer network is consisted of 1,500 dealers, and Toyota plants and dealers together have purchased more than $36 billion in parts and materials from local suppliers. Toyota is going to have its North America headquarters in Texas, and the headquarters will have more than 4,000 employees by 2017.

• Today, Toyota’s plants in North America produce about 70 % of the Toyota vehicles sold in the U.S. More than 90 % of the parts and materials in U.S.-made Camrys and Avalons are purchased from local suppliers. An average of 75 % of parts and materials are locally purchased for Toyota’s other vehicles.
• Konishi said, “Our localization has contributed to the U.S. exports.” About 160,000 vehicles were exported from the U.S. to 40 countries including Latin America, Europe, and Oceania region.

• “To better serve customers, it’s important to keep listening to their voices to provide innovative solutions,” Konishi emphasized.
• Toyota has supported extensive R&D works at the Toyota Technical Center in Michigan. It is a part of $9 billion investment that Toyota annually allocates its R&D facilities across the world.

• FCV “Mirai”: Toward a Hydrogen Society

• Energy diversification is necessary to overcome issues related to fossil fuel consumption, CO2 emissions, air pollution, and so forth. Toyota has taken the first step toward the hydrogen society although the company believes that oil using powertrains continue to play a key role in the personal vehicles.
• In December 2014, Toyota introduced the fuel cell vehicle “Mirai”, which uses hydrogen as its energy source, and began delivering it from October, 2015. The area is limited to Japan and California where hydrogen stations are becoming available.

• Konishi said that the automobile manufacturers were responsible for fuel tank to wheel emissions. Hydrogen has no impact on CO2 emissions. It is also made from various primary energy resources and can be stored and transported in various ways.

• Eco-friendly vehicles like Mirai can contribute to environmental protection when they are widely used. For this reason, Toyota released its 5,680 of the FCV related patent licenses free to the public.
• Konishi said, “We want to change the world by encouraging the widespread use of FCVs and use of hydrogen as major source of energy.”


From right to left: Grant Crampton, Chief of Staff of IT Infrastructure in the Boeing Company; Hiroyuki Idei, Executive Vice President of Nippon Sharyo U.S.A., Inc.; David Yamada, Manager Engineering and Marketing Support of Nippon Sharyo U.S.A., Inc.; and Koki Konishi, Managing Officer and Chief Officer of Technical Administration Group of Toyota Motor Corporation.