Dreamliner Investigation Turns to Battery Maker

  • Updated January 21, 2013, 11:37 a.m. ET

By YOSHIO TAKAHASHI And YOREE KOH

Investigators looking for the cause of problems that forced the grounding of Boeing Co.’s BA -0.29% flagship Dreamliners have turned their attention to the maker of the jets’ batteries, a century-old Japanese company with a strong presence in the automotive industry but relatively unknown in the aviation world.

Officials from Japan’s transport ministry and the U.S. Federal Aviation Administration on Monday visited the headquarters of GS Yuasa Corp., 6674.TO +0.95% the Kyoto-based battery maker that supplies the lithium-ion batteries for the 787 Dreamliner, a spokesman for Yuasa said. Incidents where batteries on two Dreamliners appear to have overheated prompted authorities in the U.S. to ground U.S.-based 787s until they are convinced the batteries are safe, causing regulators in Japan and other countries to follow suit. An official from Japan’s transport ministry said the investigators are also scheduled this week to inspect the GS Yuasa factory where the Dreamliner batteries are made.

“We will inspect whether appropriate operations have been conducted—from design to manufacturing,” Shigeru Takano, director of the ministry’s air-transport safety unit, said at a news conference. Japanese officials said the probe would take “a few days.” All Nippon Airways Co. 9202.TO 0.00% and Japan Airlines Co., 9201.TO +0.14% the carriers whose planes experienced the battery problems, and which together operate about half the 50 Dreamliners in service world-wide, said Monday that they were canceling some of the long-haul jets’ flights through Jan. 28, suggesting they expect the grounding to extend at least that long.

Regulators haven’t yet indicated whether they think the cause of the Dreamliner problems lies with the battery itself or with another piece of the complex electrical system of which it is a part. A flaw within the batteries could save U.S.-based Boeing from a time-consuming and expensive redesign of the systems.

The GS Yuasa probe throws an intense spotlight on the Japanese battery maker, which traces its roots to the maker of Japan’s first lead-acid storage battery in 1895. That company, Japan Storage Battery, merged with domestic rival Yuasa Corp. in 2004, forming what is now the world’s third-biggest maker of lead batteries for cars, with about an 8% share globally.

The company started developing lithium-ion batteries, the high-capacity yet sometimes combustible type of storage cell used in the Dreamliner, in the 1990s, and has plowed the bulk of its recent capital investments into the business. Last year, lithium-ion batteries accounted for about 7% of GS Yuasa’s ¥285 billion ($3.16 billion) in annual sales. According to the company, GS Yuasa plans to spend ¥50 billion in the lithium-ion business during the three years ending in March.

GS Yuasa also makes lithium-ion batteries for satellites and deep-sea vessels, and in November landed a contract from the Pratt & Whitney Rocketdyne unit of U.S.[-based United Technologies Corp. UTX +0.64% to serve as a supplier for the International Space Station. It has joint ventures with Honda Motor Co. 7267.TO -0.58% and Mitsubishi Motors Corp. 7211.TO -3.16% of Japan to produce lithium-ion batteries for electric cars, and Yuasa said it had no previous record of fires caused by its lithium-ion batteries.

“It’s been already proven that GS Yuasa’s technology level is high,” then-Honda Chief Executive Takeo Fukui said in 2008, when the company announced the joint venture.

Yet GS Yuasa’s wares appear to be relatively untested in aircraft, which some experts say is in some respects a more demanding market than many others.

GS Yuasa declined to say whether it has supplied batteries for other airplanes; the Dreamliner is the only airplane contract cited on the company’s website. The company said the Boeing jet would be the first passenger plane to use a lithium-ion battery.

“The culture is different” between manufacturers in the aviation industry and other industries, said Hideo Inagaki, a former Japan Airlines aircraft-maintenance specialist who is now principal analyst at consultant Japan Aviation Management Research. “Designers at [most] manufacturers just aim to make good products. But those who are engaged in the aircraft business design and make products that take into account the [long time] they must be used.”

GS Yuasa declined to comment on the current investigation and its lithium-ion-battery business. On Monday evening, shortly after the Japanese and U.S. investigative team had left Yuasa’s corporate compound, workers in blue and green overalls were streaming out of the company’s front gate, located on a residential street outside central Kyoto.

Corrections & Amplifications
The maker of the Dreamliner’s batteries is GS Yuasa. An earlier version of this article misspelled the name of the company in several instances.

Link…

http://online.wsj.com/article/SB10001424127887324624404578255302123044128.html

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