Detroit’s auto pain hits Japan

[rickaren]

Detroit’s auto pain hits Japan

Posted Thursday, Apr 9, 2009, 12:04 pm in Company News

Five of Japan’s eight automakers are expected to post significant losses in the next few weeks, according to a story in The Detroit News.

Demand for their cars and trucks in the United States, their biggest market, has plunged nearly 35 percent in the past year, The News said. Scores of suppliers are on the brink of bankruptcy, and thousands of workers have lost their jobs, and many are losing their homes, the paper reported.

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, the News said. The fear is palpable from Toyko to Hiroshima, prompting many to drop their objections to a U.S. government bailout of GM and Chrysler for the sake of some stability in the auto industry, the story said.

According to The News, the Japanese are worried that the failure of either company, or even a major U.S. parts manufacturer, could disrupt the global supply chain and idle their factories in the United States. There also is growing concern that such developments could trigger a protectionist backlash or spark a new trade war, the story said. (The Detroit News)