The Japanese concept of “dantotsu” infuses key elements of Komatsu America as it directs North and South America operations from its offices overlooking the Kennedy Expressway.
With its U.S. headquarters at the Continental Towers in Rolling Meadows, Komatsu uses the concept, which roughly means “unrivaled,” to design its construction and mining earthmoving equipment.
In Chile that means Komatsu is testing unmanned mining trucks guided by global positioning systems.
“Every mining company in the world is interested in what we are doing there,” said Dave Grzelak, chief executive of Komatsu America.
That combination of Japanese concepts and U.S. operations is at work within Komatsu, the largest earthmoving company in the world after Peoria-based Caterpillar Inc.
Though Tokyo-based, Komatsu nonetheless has operations from Peoria to North Carolina and Canada.
Indeed, Komatsu America assembles about 60 percent of its vehicles in North America, importing about 40 percent of its units.
Some mining vehicles made in Peoria are exported to China. Komatsu has the largest fleet of mining equipment in China, according to the firm.
With about $4.3 billion in annual North and South American sales, Komatsu America is experiencing double-digit growth, Grzelak said.
“Our backlog is huge in mining for ’07,” Grzelak said. “There’s going to be a slight slowdown but still you have to go back 20 or 30 years to see things this good. Energy and mining is good. Non-residential is good. Residential building is slow. But quarry work is good, too.”
Chicago-based Morningstar Inc. analyst John Kearney said Komatsu and rival Caterpillar both are benefiting for a strong worldwide market.
“The mining side of the business is very strong and will be for a long time,” Kearney said. “And when you think of heavy equipment makers you automatically think of Komatsu and Caterpillar.”
A veteran of General Electric, Grzelak moved over to Komatsu in the 1990s. The company has gone through some reorganizations but moved to Rolling Meadows last year from Lake County.
Komatsu had been Grzelak’s biggest customer at General Electric and he sees similarities between the two companies.
“Both have a lot of (research and development) and a theme at Komatsu is high quality and reliability,” Grzelak said. “I’d say Komatsu is even more interested in continuous improvement and growth.”
With 2,300 employees, Komatsu America may be a Japanese firm but its American side is substantial. Only about 20 Japanese nationals work in Rolling Meadows, of a total of 300 local workers, on three- to five-year stints.
One of its biggest deals on the horizon is supplying China with more than 70 mining vehicles. With some earthmovers going for $3.5 million or more, that amounts to a major boost for Komatsu America. Its Peoria plant will be the main supplier.
Also the tar sands in Canada, which is yielding oil, is a large potential market.
Grzelak estimates about 25 percent of Komatsu’s offerings are dantotsu offerings, making up more than half its sales.
Which will drive future sales, Grzelak said.
“Even in down markets we’re investing in (research and development),” Grzelak said. “Komatsu can offer the full product scope — construction, mining, energy, highway and forestry.”
Komatsu America Corp. is a U.S. subsidiary of Komatsu Ltd. which is the world’s second largest manufacturer and supplier of construction, mining and compact construction equipment. Through its distributor network, Komatsu offers a state-of-the-art parts and service program to support the equipment. Komatsu has proudly been providing high-quality reliable products for nearly a century. Visit the website at www.komatsuamerica.com for more information.