Shortage of Japanese Parts Affecting Variety of Companies
March 22nd, 2011Via: Reuters:
Sony Corp cut output at five more plants and Toyota Motor delayed restarting assembly lines, as the global supply of parts and products began to feel the full impact of Japan’s catastrophic earthquake.
Global electronics and autos companies have been hardest hit by the turmoil, but in an illustration of how the ripples are spreading, Rio Tinto, the world’s No.2 iron ore miner behind Brazil’s Vale, warned the disruptions posed a threat to its expansion plans.
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Companies from Apple Inc to General Motors Co and Nokia are feeling the impact.
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Japan’s grip on the global electronics supply chain is causing particular concern. It produces around a fifth of the world’s computer chips and exported 7.2 trillion yen ($91.3 billion) worth of electronic parts last year, research from Mirae Asset Securities shows.
“There are a huge number of little bits of the high-tech food chain which are done nowhere but in Japan,” said Sam Perry, senior investment manager of Pictet Japanese Equity Selection Fund. “Nobody else has the quality or the consistency, and in some cases the technology, to do it.”
“but economically, Japan is a has-been, an indebted, ageing society that has been stuck in recession for 20 years. and their population is shrinking. nothing to see there. quick, jump on that plane to China or you’ll miss the all fun!”
(sarcasm)
I took an advanced U.S. foreign policy analysis class in college and the first “case” it dealt with was the huge role that Japan played (and still plays) in supplying electronics for U.S. weapon systems. That was sort of the beginning of my interest in Japan, and how important it is in international political economy, manufacturing, infrastructure, blah blah.
The professor started by introducing Japan as this resource poor rock, with an aging population, etc. (like your sarcasm post above) and then he put up a slide of a U.S. F-15 and asked, “Who knows what this is?”
hahaha.
It’s interesting: The Reuter’s live blog that deals with the earthquake/tsunami/nuclear disaster had as many as 20,000+ viewers at once in the days right after the 11th. Now, it ranges between about 800 and 1000 viewers.
Maybe there are some new episodes of Dancing with the Stars on the TV???
I’m still of the belief that very few people have their heads around this thing yet. I sure don’t.
i suppose the very short answer is that this attitude/ignorance reflects (is a symptom of) the ultra-financialisation of not only most economies but also modern culture, eductation and (propaganda) media in general.
what i mean is, the majority of people are trained to only look at the marginal, short-term profit as the criteria for nearly all of their decisions once you get above the base of Maslow’s heirachy of needs. so almost total ignorance of “how things work” is a feature, not a bug. this ignorance has political ramifications, of course, but the global manufacturing system being in a deep hole on a broad scale shows how this ignorance and lack of understanding of the risks inherent in complex systems leads to these total “doh?” moments. i mean ffs, the Tohoku region plus northern Kanto are so packed with electronics and machinery high tech, produced nowhere else, and yet after 10 days a few business news agencies and publications are just starting to smell the coffee.
but don’t worry, back the sarcasm,i mean dancing with the stars, Japan is just a faded economic power with unfortunate seismic tendencies.
re: “introducing Japan as this resource poor rock”
nearly all Japanese, when discussing their country’s economic history and position in the world economy, say something like this, and they actually believe it.
if you look at world economic history since the Industrial revolution, the transformation of Japan from a feudal society in 1855 with no modern technology and only their centuries-old steel, copper, silk and ceramics manufacturing, etc., to a huge manufacturing powerhouse in the 1930s, was an amazing feat. but the resource base to achieve that transformation is not hard to see.
good climate, good soil, good rainfall, good rivers, lots of food resources on land and sea, imported and adapted rice culture, advanced imported written culture for over 1200 years, high population density, high average literacy, high level of large-scale organization (han), unified governance and monetary system (bakufu), etc. blah, blah. “resource-poor Japan” is a myth. yes, they need to import industrial raw materials and energy sources, but the human and physical geography gave them massive advantages over most other places.
@tochigi — I just wanted to mention that I have really appreciated the knowledge and perspective you’ve shared in your comments, in general, and especially throughout the recent catastrophe. Good wishes to you and yours, and many thanks.
@kevin — all of the above, all the time