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 told The Associated Press on Monday. “The conditions for the U.S. auto market are extremely tough right now, and any additional negative is sure to make things worse.”
One reason is that 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 would likely 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 like 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 is likely needed.
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.
“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.”
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.”
Even more directly devastating for the export-dependent Japanese would be the weakening dollar, which is likely to accompany a U.S. downturn, Endo said.
The dollar’s recent drop — to 90 yen levels, when the Japanese had been counting on the dollar trading at about 100 yen — is already battering their profits by reducing overseas earnings. The dollar could plummet further in coming months.
After the Senate last week rejected an auto industry bailout, the Bush administration is considering ways to give emergency aid to GM and Chrysler. Ford says it can survive 2009, but it has also asked Congress for a line of credit.
While Japanese automakers are in a far better financial state than their American counterparts, they are all getting battered in the shrinking U.S. market.
In November, when U.S. auto sales plunged 37 percent to their worst level in more than 26 years, Toyota’s sank 34 percent, Nissan’s were down 42 percent and Honda Motor Co.’s fell 32 percent.
Vehicle sales in Japan and Europe are also waning, and demand is even weakening developing economies in China, India and Latin America.
“This is a global crisis affecting the entire auto industry: No one is immune,” Sproule said. “And it is in everyone’s interest to see a healthy auto industry that is able to manage through this crisis.”
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