Anisa Khalifa: In recent years, the US, and particularly the South, has seen an influx of foreign investment. And Asian countries like South Korea, India, and Taiwan often grab the headlines. But the undisputed king is Japan. And the cradle of Japanese investment in America might surprise you.
(SOUNDBITE FROM NEWS BROADCAST)
Unidentified Anchor: The Japanese prime minister is now on American soil, arriving in Washington for a state dinner at the White house鈥�
Unidentified Speaker: He spoke to a joint session of Congress and then flew to Raleigh, North Carolina.
Anisa Khalifa: I'm Anisa Khalifa. This is the Broadside, where we tell stories from our home at the crossroads of the South. This week, how North Carolina reached across the world and joined hands with Japan. And what it means for the American economy almost 50 years later.
(SOUNDBITE FROM HI-CHEW AD)
Anisa Khalifa: About 50 miles west of Raleigh sits the town of Mebane. It鈥檚 probably best known for its outlet mall. But for the last decade, it's also been home to an iconic Japanese brand.
Unidentified Narrator: What's it like when you bite into a HI-CHEW? It's really fruity and really chewy.
Terry Kawabe: It's like a very, um, true to life fruit flavor with a double layer and a mouth watering texture and, uh, it's a very unique taste and texture.
Anisa Khalifa: That's Terry Kawabe, the president and CEO of Morinaga America, a subsidiary of the 125-year-old company that makes the candy HI-CHEW. Morinaga entered the American market in 2008, setting up their headquarters in California 鈥� but in 2015, when it came time to choose a site for their first US factory, they chose Mebane.
Terry Kawabe: The government of North Carolina and Orange County were very supportive to us. So that's why we set up the factory in North Carolina.
Anisa Khalifa: North Carolina's HI-CHEW factory now makes more than 2 billion candies a year, almost half of Morinaga's total production. And it's still not enough to meet the rising demand. Morinaga says 63 pieces of HI-CHEW are eaten in America every second 鈥� although consumer tastes differ across the ocean.
Terry Kawabe: It's very interesting, in Japan, the grape is the number one. But here, the number one is the strawberry.
Anisa Khalifa: The Mebane operation has been so successful for Morinaga that in 2027, they're set to open a second factory there.
(SOUNDBITE FROM NEWS BROADCAST)
Unidentified Anchor: Japanese candy company Morinaga announcing this morning it's investing $136 million to build a second facility at its site in Mebane鈥�
Anisa Khalifa: Okay, so it's pretty amazing that this Japanese company is making a very famous candy practically in my backyard. But the question remains, why North Carolina? I know we aren't the only state that offers incentives to foreign investors. And it's not just Morinaga 鈥� there are so many Japanese companies that have established themselves here over the last few decades. So I reached out to someone who might know the answer 鈥� a man who holds probably the coolest title in the world.
David Robinson: I am the Zai Rori Nihonkoku Meiyo Ry艒ji, the Honorary Consul for Japan in North Carolina.
Anisa Khalifa: David Robinson is an American lawyer based in Raleigh, but he actually lived in Japan as a boy.
David Robinson: My dad was a CPA with Deloitte, and so I grew up in Tokyo. Spent, uh, ages 8 to 15 in Tokyo.
Anisa Khalifa: And eight years ago, he got the opportunity to be a diplomat bridging North Carolina and the country he once called home. Although they aren鈥檛 typically paid, honorary consuls are real diplomats who promote things like tourism, cultural exchanges, and economic investment鈥� and you don't need to be a Japanese citizen to apply.
David Robinson: It's regulated by the Hague convention. The host country must appoint you. So I was summoned to a lunch down in the, uh, Consul General's House of Japan in Atlanta. There were, there were, there appeared to be a white wine glass, a red wine glass, a sake cup, and it was at lunch.
Anisa Khalifa: Did you have to choose?
David Robinson: See, I think the fact that I behaved myself was probably the test, right, that, that I was okay for the job.
Anisa Khalifa: But David wouldn't have been at that table in the first place if it weren't for the vision of one man.
David Robinson: There's a Japanese word that I think is important. It's called Nemawashi and it literally translates into preparing the soil before you plant a tree. North Carolina did that.
Anisa Khalifa: In the late 1970s, the state鈥檚 governor, Jim Hunt, started building economic bridges with Japan. David says this was an incredibly bold move. At the time, the US was mired in a deep economic recession and Japan wasn鈥檛 exactly popular.
David Robinson: You have to recall that at this time, Japan is taking market share away, especially in the automotive industry from American automotive production. You saw at some point in time, congressmen with baseball bats hitting Japanese TVs on Capitol Hill, or, you know, saying horrible things about Japanese automobiles鈥�
Unidentified Reporter: The car you're looking at, a '78 Toyota Corolla, donated by Hoot MacInerny in Oak Park. We got Tim Donovan here taking out his frustrations out on this '78 Toyota, this is all in good fun鈥�
David Robinson: There was trade friction. And there was a deep, deep concern that we as Americans were becoming increasingly indebted to the Japanese. Going against the grain, North Carolina saw a real opportunity there.
Anisa Khalifa: Governor Hunt sent trade missions to Japan, and the state established an official presence in Tokyo. And in 1980, the North Carolina Japan Center opened at NC State University in Raleigh with the goal of strengthening cultural and economic ties between the two regions.
David Robinson: There were very few states at the time that did that. I've heard that there was, you know, a lot of folks that questioned whether that was a good investment of state resources.
(SOUNDBITE FROM ARCHIVAL NEWS FOOTAGE)
Unidentified Anchor: Governor Hunt's message is clear even in his somewhat broken Japanese鈥�
Anisa Khalifa: But all of that changed in 1982 when Governor Hunt鈥檚 big gamble paid off.
Unidentified Anchor: This newly dedicated plant off the Beltline in Raleigh is just the kind of thing the state wants more of鈥�
David Robinson: And then, you know, then there was Japan tobacco, there was Kobe steel, there was Sumitomo electric, and all of a sudden this wave of Japanese companies starts coming in and providing really good quality jobs to North Carolinians. And after that, you know, everybody sort of credited the genius of engaging with Japan.
Anisa Khalifa: The Japanese companies that have come to the state over the last 40-plus years are globally recognizable brands in various industries, from aerospace to biotech and everything in between. But David says they all find the same value in North Carolina: affordable infrastructure, welcoming local governments, and a highly educated workforce.
David Robinson: As part of our incentives to a lot of foreign direct investors, North Carolina typically will involve the community colleges and will agree to train workers for the jobs that are required by that foreign investor. It's these community college training programs that, honestly, I think North Carolina does better than any other state.
Anisa Khalifa: But David says the most important thing remains the long-standing relationships that were established all the way back in the seventies.
David Robinson: I think the best marketing piece the state has is the 10 county area that Wake is in the center of, has a map of, of all the foreign investments. And it's just little flags. It doesn't have the name of the company, but it, you know, if you look at this map, there's a ton of Japanese flags on this map. And I think a Japanese business in Tokyo, looking at that, goes, Okay. I'm not the first mover, there's momentum there and I'm just going to be part of that momentum.
Anisa Khalifa: If we wanted to see an on the ground facility where we could learn about the history of Japanese investment in North Carolina. Where should we go?
David Robinson: Oh, I would start with Ajinomoto. They were the start of the wave, right? In 1982, when they established in Raleigh. When we talk about companies being long term investors and good corporate citizens, Ajinomoto would be the poster child for that.
Anisa Khalifa: Coming up after the break 鈥� we take David鈥檚 advice, put on our hard hats, and visit one of the oldest Japanese-owned manufacturing facilities in the country. And a little later, the Prime Minister of Japan returns the favor.
On a bitterly cold January morning, Broadside editor Jerad Walker got to fulfill a childhood dream. He went on a tour of a factory. Located on the south side of Raleigh at the heart of a 120-acre campus, this sprawling hi-tech facility employs 240 people, including his guide.
Andy Steinhauer: Hi, I'm Andy Steinhauer. I'm the general manager for Ajinomoto's plant here in Raleigh, part of Ajinomoto health and nutrition North America.
Anisa Khalifa: The Ajinomoto Group is a giant food science and biotech company. They make everything from MSG to amino acids. For nearly an hour, Andy led Jerad through a maze of buildings. From massive storage facilities..
Jerad Walker: 鈥奜h wow, so we are in a warehouse that would put IKEA to shame.
Anisa Khalifa: To industrial rooms dotted with fermentation tanks.
Jerad Walker: 鈥娾�夾nd it stinks in here.
Andy Steinhauer: Yup. Just like if you're brewing beer. Smells great, fermentation.
Jerad Walker: What is fermenting?
Andy Steinhauer: So usually we're feeding glucose, and then a bacterial cell is鈥�
Anisa Khalifa: But for the last stop of the tour Andy took Jerad to the board room. Where at the end of a long conference table there was a giant black and white photograph. It鈥檚 there to remind everyone who comes to this building that Ajinomoto was once the epicenter of Japanese investment.
Andy Steinhauer: This is a picture from the groundbreaking and it's got Governor Jim Hunt and President Watanabe shoveling out dirt and there's snow on the ground. And the funny story about this is that when Jim Hunt went on his recruiting trip in 1979 to speak to Ajinomoto management and tell them why North Carolina was a great place to build a manufacturing site, he said, it's a great climate, never snows. And then, lo and behold, groundbreaking, there's snow on the ground. In reality, North Carolina's climate is very similar to Japan's climate鈥�
Jerad Walker: Wait, Andy, this says it had 11 inches of snow.
Andy Steinhauer: 11 inches of snow, correct. About a foot.
Jerad Walker: That's not a little bit of snow either.
Andy Steinhauer: Yeah, that is historically unusual within North Carolina, certainly.
Anisa Khalifa: Okay 鈥� the governor got caught in a little white lie鈥� maybe not the best start to our trans-Pacific partnership. But it is true that in general, our weather is pretty similar.
Brian Gordon: not to be too cute about it, but it was interesting that Tokyo and Raleigh have the same latitude.
Anisa Khalifa: Brian Gordon is a business and technology reporter at the 瓜神app and Observer. He鈥檚 written extensively about this history. But he says the most interesting part of the story has actually been playing out in the past few years.
Brian Gordon: Fujifilm has announced an expansion to their biotech facility in Holly Springs. There's a lithium ion battery plant, Davidson County, HI-CHEW in Mebane and Kyowa Kirin in Sanford. So there's just been, Japan, Japan, Japan.
Anisa Khalifa: Recent federal policies have also made the US more attractive to foreign investors.
Brian Gordon: The CHIPS Act and the Inflation Reduction Act have encouraged foreign manufacturers to onshore into the United States. And Japan in particular likes that we're a growing population. The country of Japan has a declining birth rate, and their leaders will talk about how they see places like the United States and specifically North Carolina and its population growth as an enticing place to land.
Anisa Khalifa: Japanese companies are now by far the largest foreign investors in the state, employing over 30 thousand North Carolinians at more than 200 sites. And this flood shows no sign of slowing down. The most recent investments are eye-popping.
Brian Gordon: South of Greensboro in Randolph County, the Toyota battery plant, which is going to begin producing batteries in a couple of months, promises to eventually be a nearly 14 billion facility and employ around 5000 people. Fujifilm is north of a billion dollars as well. So just a lot of money coming from Japanese companies that are world known and other ones that are pretty niche.
Anisa Khalifa: What about culturally? What kind of cultural impact does this sort of special relationship have on North Carolina?
Brian Gordon: I think a lot of people see Toyota and their first thought isn't, That's a Japanese company. They're like, Oh yeah, that's a car company. And then if you take a second, you're like, oh yeah, their headquarters aren't Detroit, it's Japan. But if they're building a giant facility in Randolph County, about 30 minutes or so south of Greensboro. And so I think for the people who maybe a generation or two ago, their parents worked in furniture or worked in textiles, and as those sectors are receding and there are these new types of industries, I think who owns the company to some extent, you won't feel in the day to day.
Anisa Khalifa: Do you think that that's particularly unique to Japanese companies that we are so familiar with them that they don't feel foreign the way that maybe some other foreign companies might for like American consumers?
Brian Gordon: Yeah, certainly. I mean, one, one thing is that Japan doesn't have the political stigma right now of China. And that whenever North Carolina gives incentives or kind of coordinates with a company that has ties to China, that's always a topic and that always becomes part of the discussion and the debate. But Japan is an uncomplicated ally that has been doing this for a long time.
Anisa Khalifa: Seems like the relationship building, person to person, has been really important throughout this process.
Brian Gordon: Yeah, there's a conference each year between Japan and the Southeastern States, and this past year it was in Charlotte. And it's definitely where Japanese companies are courted. We have this relationship with Japan that we're very proud of, but other states, our rivals also want Japanese businesses and they also often have ample land and lower cost energy. And so while we want to keep this relationship going, so does Georgia, so does South Carolina, so does Virginia.
Anisa Khalifa: Out of all of those southern states that are competing, do you think that North Carolina is ahead of those other states?
Brian Gordon: I'd like to think so. Um, I, I'd like to think that I, I haven't like crunched the numbers on the other states, but the prime minister went to one state and it wasn't South Carolina. It wasn't Georgia. Um, and I think we're very proud of that.
Anisa Khalifa: That's the Prime Minister of Japan Brian is talking about. And there's no bigger payoff for generations of hard work than having then-prime minister Fumio Kishida make a special visit here last spring.
(SOUNDBITE FROM NEWS BROADCAST)
Unidentified Anchor: And now the Japanese prime minister is here in North Carolina. It;s a rare visit to the Tar Heel State by a key international leader鈥�
Unidentified Anchor: Japan is one of the largest US trading partners and a huge source of foreign investment in North Carolina鈥�
Unidentified Anchor: Yeah talk about a busy dance card. Like you said, I mean crisscrossing the entire state, the prime minister and that delegation no doubt wanting to get some rest鈥�
Anisa Khalifa: As the Honorary Consul, David Robinson was thrilled to be able to host him on this once-in-a-lifetime occasion.
David Robinson: It had been 70 years since a foreign head of state had ever visited North Carolina. He spoke to a joint session of Congress and then flew to Raleigh, North Carolina.
Anisa Khalifa: It was wild.
David Robinson: Which I think was just super awesome. I, it speaks to the importance of North Carolina in, the, the US-Japan economic relationship right now. I've never seen 鈥� I've never been part of an undertaking like that. At one point in time, the war room of Japanese diplomats that were flown into Raleigh to help manage this numbered 72 individuals.
Anisa Khalifa: Wow. Were there some unique logistical challenges that you had to deal with because we're not used to that experience?
David Robinson: So yeah, all along the way, all along the way. The first was the airplane itself. This is the largest plane that has, you know, I think has ever landed at RDU. Um, we were all out on the tarmac, sort of figuring out where it would go. How do we store it for two days? And the Japanese dropped this bombshell on us, which is, Hey, Oh, by the way, there's a second, we fly a spare.
Anisa Khalifa: Oh my goodness.
David Robinson: And then I saw the 50 plus journalists that were traveling with the prime minister. And I said, now this is, this is our opportunity, you know? And so we got just an incredible amount of press coverage in Japan about this visit.
(SOUNDBITE FROM JAPANESE NEWS BROADCAST)
Anisa Khalifa: The Japanese delegation went home having experienced real Southern hospitality, including bluegrass music and North Carolina barbeque. But they also tried another classic local delicacy.
David Robinson: So all of the Japanese diplomats, we had folks from the United Nations and we were all in buses and we were sort of looking to see where the prime minister would go. That lunch stop was at Bojangles.
Anisa Khalifa: Of course, yes.
David Robinson: They were like, we've got to try this. And it was a hit.
Anisa Khalifa: I mean, yeah, who can say no to Bojangles? That's just鈥� I love that. A diplomatic mission literally greased with fried chicken. David says that when it comes to this long-standing relationship, the best is yet to come.
David Robinson: Eight years ago, when I started being the honorary consul for Japan in North Carolina, I would start a lot of my speeches with, "This morning, 12, 000 North Carolinians got up to go work for a Japanese company." That number is now about 34,000. The numbers don't lie, right? You know, the number of PhDs we have per capita, the number of engineers we have, the energy costs, our, you know, geographic, uh, selling points. All the math has always added up, but this new level of excitement. I think, I think we are on the map, if you will. And you know, we all just better be prepared for the ride.
Anisa Khalifa: You can check out Brian Gordon's ongoing coverage of Japanese investment in North Carolina at the link in the show notes. Very special thanks this week goes out to Tom White of the Economic Development Partnership at NC State, and Stephen Sumner at the North Carolina Japan Center. Thanks also to Hiromi Leight at Ajinomoto Health and Nutrition North America and Jessica Zweigbaum at Morinaga America.
This episode of The Broadside was produced by me, Anisa Khalifa, and our editor Jerad Walker, with help from Charlie Shelton-Ormond. WIlson Sayre is our executive producer. The Broadside is a production of 瓜神app鈥揘orth Carolina Public Radio and is part of the NPR Network. If you have feedback or a story idea, you can email us at broadside@wunc.org. And if you enjoyed the show, leave us a rating, a review, or share it with a friend! Thanks for listening y'all. We'll be back next week.