Japanese automakers feel our pain
TOKYO — Japan’s automakers aren’t celebrating the troubles of their U.S. rivals, believing that what’s bad for the industry in America is bad for carmakers in Japan, too.
In recent years, the Japanese have expanded in the U.S., making the world’s biggest auto market a cornerstone of their growth strategy. By growing more American, however, they have become such a part of the U.S. industrial landscape that the collapse of any of Detroit’s Big Three would be a blow to the Japanese manufacturers.
"The damage to our business is certain to be tremendous," Toyota Motor Corp. spokesman Hideaki Homma said Monday. "The conditions for the U.S. auto market are extremely tough right now, and any additional negative is sure to make things worse."
Things are so tough in the U.S. that on Monday Toyota said it is shelving its plans to build the popular Prius hybrid in Mississippi. Despite investing $300 million in the plant so far and having completed 90 percent of it, the automaker is delaying production there indefinitely.
Japanese carmakers in the U.S. share many of the same parts suppliers with General Motors Corp., Ford Motor Co. and Chrysler LLC. If a Detroit automaker were to collapse, suppliers likely would follow in a damaging chain reaction.
More broadly, the U.S. crisis could lead to huge job losses and further weaken consumer spending, especially for big-ticket items such as automobiles. Together, the Big Three automakers employ 239,000 workers in the United States. Counting other businesses that depend on the automakers, economists estimate that 2.5 million jobs would be lost if all three went out of business.
"Whether it is the impact on consumer confidence or the impact on the suppliers that we all share, having one or more of the major automakers in severe distress has consequences for the entire industry," said Simon Sproule, corporate vice president of global communications at Nissan Motor Co., Japan’s third-biggest carmaker.
Among the major U.S. suppliers are Delphi Corp., Bosch Auto Parts and TRW Automotive.
Dan Irvin, spokesman for Mitsubishi Motors North America, said the Japanese automaker is "on the sidelines" on the specifics of the bailout proposals, but some assistance for the U.S. industry likely is needed payday loans for people with bad credit.
Mitsubishi has one factory in the U.S., in Normal, Ill., that employs nearly 1,600 people. Irvin said the plant does not share any parts suppliers with the Big Three.
Get more business news, blogs and opinion"We would say that these are extraordinary economic times and the auto industry is critical to the American economy," Irvin said. "So in an extraordinary situation, some kind of extraordinary help for these major players in the auto industry is probably appropriate."
Fred Standish, a spokesman for Nissan’s U.S. arm, also offered support in principle for federal aid.
"What we hope comes out of all of this is a strong and vibrant U.S. auto industry, and so we would support efforts that we think would result in that," he said. "As for what those things are individually, we have to wait and see what Congress or the president … come up with."
Jeffrey Smith, spokesman for U.S. operations for Honda, Japan’s No. 2 automaker, said the company "encourages initiatives that are essential to maintain the short and long-term stability and viability of the auto industry."
The Bush administration is considering ways to give emergency aid to GM and Chrysler. Ford has asked Congress for a line of credit.
A possible advantage from a collapse of the U.S. auto industry could come only many years later — perhaps in a decade — when Japanese manufacturers would compete against weaker rivals in the U.S., especially if they further exploit their lead in green technology with hybrids or electric vehicles, said Koji Endo, an analyst with Credit Suisse in Tokyo.
"But that’s for the long, long term," he said. "For now, the situation is bound to get worse for the Japanese."