Although the impact will be decidedly negative for some, like companies that rely on Japanese goods or parts to do business, corporations that compete with Japanese goods may profit — inadvertently — from Japan's misfortune. Among those are South Korean automakers, though their reliance on Japanese companies' input may make things a bit more of a wash:
Toyota, the world's largest automaker and Japan's biggest company, has halted all production in Japan, including its hybrid Prius vehicle, through Wednesday, representing 45% of its worldwide supply. Automakers Nissan, Mitsubishi, Mazda, Subaru and Suzuki have also temporarily shut down their plants to help conserve electricity.There's always something unpleasant about looking at bottom lines while we're still looking for survivors in the rubble (!), but these kinds of business stories affect us whether we like it or not.
Honda Motor Co., Japan's fourth-largest company, has shuttered several of its plants, including one in Suzuka, where it produces many of its hybrid vehicles, a painful product to lose as worldwide gasoline prices soar and demand for fuel-efficient vehicles rises. Also, two Toyota plants in the disaster-struck Sendai region produce some of the automaker's more fuel-efficient offerings, including the Yaris subcompact.
Nissan Motor Co. said it lost almost 2,300 vehicles awaiting shipment at an eastern port that were destroyed by the tsunami.
Shares in the Japanese auto sector traded down heavily Monday, with Toyota falling 8% and Nissan down nearly 10% in trading on the Tokyo Stock Exchange.
Although those production setbacks might seem like an opportunity for ambitious foreign competitors such as South Korea's Hyundai, Germany's Volkswagen and a resurgent Ford Motor Co., Rebecca Lindland of IHS Global Insight notes that most Japanese automakers today produce vehicles in the countries where they sell them. According to Honda, for example, 80% of the vehicles it sells in the U.S. are built here.
Moreover, Lindland said, disruptions at Japan's automotive suppliers could hurt brands from all over the world. That's because carmakers depend on complex global supply chains, and even Chevrolets built in Michigan use Japanese components.
"Nobody works in isolation these days," Lindland said. "All it takes is one missing part. If you're missing something as simple as the cup holder, you aren't selling that car."
I guess, though, that a better economic news story to focus on would be South Korea's decision to divert some of its supply of energy-producing liquefied natural gas (LNG) to Japan to help meet its electricity needs in the wake of the disaster:
South Korea will redirect some of its liquefied natural gas imports to Japan to help its disaster-hit neighbour manage a severe energy shortage, a Seoul official said Monday.Y'know, I'd say that it's okay for Seoul to disrupt South Korea's energy needs at least a little, all things considered.
"We will redirect parts of LNG (liquefied natural gas) imports from third countries through late March to April to Japan," an official at Knowledge Economy Ministry told AFP.
Japanese electricity operators on Saturday asked for Seoul's help with its gas supply, predicting it will take more than a month for Tokyo to offset shortages caused by damage to key nuclear power plants, the official said.
Negotiations with exporting countries are underway but it is unclear how much gas will be diverted to Japan, the world's top LNG buyer.
"We will provide as much as we can without disrupting our own domestic needs," she said, adding Tokyo will later return the gas under the LNG swap deal with Seoul.
South Korea, the world's second-largest buyer of LNG, has secured nearly 98 per cent of its estimated needs this year through mid-and long-term contracts, the ministry said.
Anyway, I'm proud to see that South Koreans are doing so much to help out Japan. Despite historical grievances and some political disputes that bubble to the surface from time to time (cough! — right-wing historical amnesia — cough! — Tokto and Yasukuni — cough!) the two countries are actually closer than most people realize, socially, economically, politically, etc. And much friendlier, too.
And were the tables turned and it were South Korea suffering from such a horrific disaster, I have no doubt in my mind that the Japanese government and the Japanese people would be stepping up in a very big way to make sure their South Korean neighbors made it through.