Japan rocked by poor USA auto sales Five of Japan's eight automakers are expected to post significant losses in the next few weeks. Demand for their cars and trucks in the United States, their biggest market, has plunged nearly 35 percent in the past year. Scores of suppliers are on the brink of bankruptcy. Thousands of workers have lost their jobs, and many are losing their homes. These are challenges Detroit has been struggling with for years.
But this is not Detroit.
This is Tokyo, where laid-off auto workers are sleeping in parks, financiers are fretting about the impact of a General Motors Corp. bankruptcy on already weak parts makers, and the heads of once-invincible automakers like Toyota Motor Corp. are watching sales decline and losses mount.
The crisis in the U.S. automobile industry has hit Japan like a tsunami. And everyone in the Japanese auto industry -- the engine of the nation's economy -- is worried that it could get much worse if GM or Chrysler LLC fail.
"It is very serious. It is not only a U.S. problem," said Toshihiro Iwatake, executive director of Japan Automobile Manufacturers Association Inc. "Your problems have become our problems."
"Japanese automakers don't want to see GM or Chrysler disappear," said Akira Kojima, senior fellow at the Japan Center for Economic Research. "It would create social and political problems. Toyota and others are concerned about the impact this would have on public sentiment."
"We depend too much on the U.S. market," Kojima said. "To reduce their inventories in your market, Japanese manufacturers quickly began to reduce production. They also began to cut temporary workers."
"The shrinking of the auto market in the U.S. affects the Japanese economy quite a lot -- particularly the parts suppliers," said Iwao Nakatani, director of research at Mitsubishi UFJ Research and Consulting Co. Ltd., one of Japan's biggest financial firms. "If the situation lasts longer than a year or so, some Japanese suppliers will go bankrupt."
"The parts manufacturers are mutually dependent," said Takehide Takahashi, executive managing director of the Japan Auto Parts Industries Association. "If there is a major disruption among the tier one companies in the United States, we will be swimming in a sea of blood." Tier one suppliers sell parts directly to automakers.
"It's already having an impact," he told The Detroit News. "Japanese automakers in the U.S. are depending on U.S. suppliers. We also share dealers with the Big Three.
"We have some concerns about that because, if they closed, our sales power in the United States would decrease."
Matsunaga said the U.S. government's efforts to save GM and Chrysler are a violation of World Trade Organization rules, which prohibit nations from unfairly supporting domestic products. But it is a violation he is prepared to ignore.
"So far, that is not a problem," he said. "We are not against such policies. Our concern is not the bailout, but the confusion in the U.S. market.
"Our hope is that the U.S. automakers will become sound so that the market can stabilize."
"There are too many players in Japan," said Mitsubishi UFJ's Nakatani. "If companies merge or consolidate, productivity would go up. But Japanese companies are more patient and able to endure losses. It's bad for shareholders, but the competitiveness of Japanese industry has been fostered by this industrial structure. They have had to reduce costs and improve quality in order to survive." Full story at Detroit News
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