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Feb. 16, 2010, 10:00 a.m. EST

JR Central Chairman Aims to Bring Shinkansen to U.S.

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By Mariko Sanchanta And Yoshio Takahashi

TOKYO—The chairman of Central Japan Railway /zigman2/quotes/205638698/delayed JP:9022 +2.53% Co. said the company is aiming to work with U.S. companies such as General Electric /zigman2/quotes/208495069/composite GE +0.45% Co., as part of an aggressive bid to see its platypus-billed shinkansen whiz its way through the state of Florida.

At the same time that the company is aggressively ramping up to do business in the U.S., Yoshiyuki Kasai , the 69-year-old head of JR Central, said in an interview Monday that he will never try to sell his world-leading product in China—a strategy at odds with many Japanese companies focusing increasingly on their rapidly growing neighbor.

"It's not possible to export our trains to China. They would steal our technology and they would not respect it," said Mr. Kasai, who has worked in Japan's rail business for 48 years and has become a larger-than-life figure who doesn't mince his words, a rarity in corporate Japan. Known as an outspoken nationalist, he said bluntly: "The risks are too high—if there was an accident they would blame us and it would be the end."

"JR East uses the cheap version of their train in China. I told them not to do it," Mr. Kasai added, referring to East Japan Railway /zigman2/quotes/201416061/delayed JP:9020 +1.52% , an independent company operating the shinkansen in central and northern Japan. JR Central and JR East are two of six former state-owned rail companies that were privatized in 1987.

Mr. Kasai also took a swipe at global competitors, notably French firms looking to export their own high-speed railway systems. "In France, if a train is five minutes late, then it's just on time. In Japan, if it's one minute late then it's late," said Mr. Kasai, who got his master's degree in economics from the University of Wisconsin-Madison in 1969. "In 45 years of operation, we have had 4.5 billion passengers and zero casualties as a result of a train accident."

A spokeswoman for French engineering company Alstom /zigman2/quotes/209823934/delayed FR:ALO -1.03% SA, a major French train maker, declined to comment.

As for the U.S., "we would make the cars in America and operate a factory in Florida," said Mr. Kasai. "We could partner with American firms, such as General Electric, and engage in technology transfers—these would be 50-50 joint ventures."

Mr. Kasai, however, made clear that these discussions had not reached official stages yet. "We have not received any information on [a proposed tie-up]" said a GE spokeswoman in Tokyo.

Mr. Kasai is vying to export the N700I version of the Japanese shinkansen to the U.S. If his bid is successful, it would mark the first time its total system—including the track, rolling stock, signal equipment and railway management systems—would be used outside of Japan.

Mr. Kasai said he wants to do so in the spirit of what could be called shinkansen diplomacy, or fostering better ties between two nations due to technology transfers and joint infrastructure development projects. "Japan and the U.S. should pursue a free trade agreement or an economic partnership agreement—people should be able to move freely between both countries," said Mr. Kasai. "As a private company we want to improve U.S.-Japan relations."

A big U.S. contract could also be good for the firm's bottom line. The shinkansen remains one of Japan's enduring technological icons and is renowned for its punctuality—trains arrive to the minute—and its efficiency. JR Central's high speed connection between Tokyo and Osaka is one of the few profitable train routes anywhere in the world, and accounts for 80% of the company's revenue.

President Barack Obama announced last month the recipients for an $8 billion plan to develop high-speed rail throughout the U.S. Of that amount, $1.25 billion is earmarked to construct a high-speed link between Tampa and Orlando, which Mr. Kasai says is the most promising area in the U.S. to use shinkansen technology.

A high-speed rail link between the two cities would result in a 45-minute train ride, though the entire project would cost $3.5 billion to finance. A decision on the successful bidder is set to be decided later this year.

Mr. Kasai said that close to a dozen firms in Japan would benefit if JR Central won the bid to build its bullet train in Florida, including Nippon Steel /zigman2/quotes/209782682/delayed JP:5401 -2.65% Corp., Sumitomo Metal Industries Ltd., Hitachi Ltd., Nippon Sharyo /zigman2/quotes/208243633/delayed JP:7102 +0.16% Ltd., which makes rolling stock, Toshiba /zigman2/quotes/205628942/delayed JP:6502 +1.38% Corp. and Mitsubishi Electric /zigman2/quotes/207150000/delayed JP:6503 -0.76% Corp.

Dozens of international companies, including Germany's Siemens /zigman2/quotes/214908078/composite SI -8.03% AG, Canada's Bombardier /zigman2/quotes/208994866/delayed CA:BBD.B -3.23% Inc., France's Alstom, and General Electric Co. and Lockheed Martin /zigman2/quotes/200691238/composite LMT -1.85% Corp. of the U.S. are all vying to win the lucrative contracts. Mr. Kasai said that while competition would be tough, Japan's technology, timeliness and safety record spoke for itself.

JR Central is marketing two types of trains in the U.S.: the shinkansen, which travels as fast as 330 kilometers per hour; and the magnetic-levitation, or maglev, train, which can run up to 581 kph, but is more expensive and in only limited use so far. JR Central has already spent more than $1 billion developing the technology behind it.

Mr. Kasai said a maglev link between Baltimore and Washington, D.C., would result in a journey between the two cities of less than 10 minutes. But the cost to construct the line would be exorbitant, totaling several of billions of dollars.

Maglev trains use powerful magnets that allow the train to skim along its guideway without touching it, reducing friction. JR Central's trains float 10 centimeters above the guideway but need supercooled, superconducting magnets to generate lift. The train still uses wheels because it lifts clear of the guideway only after picking up speed.

Write to Mariko Sanchanta at mariko.sanchanta@wsj.com and Yoshio Takahashi at yoshio.takahashi@dowjones.com

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