Crisis Stalls Japan's Toyota City As Automakers Wait The manufacturing shutdowns following the March 11 earthquake and tsunami were felt acutely in Toyota City, where the Japanese auto giant is based. Many small manufacturers there survive by selling parts to Toyota, and the shutdowns are already hurting the local economy.
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Crisis Stalls Japan's Toyota City As Automakers Wait

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Crisis Stalls Japan's Toyota City As Automakers Wait

Crisis Stalls Japan's Toyota City As Automakers Wait

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MELISSA BLOCK, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

MICHELE NORRIS, host:

And I'm Michele Norris.

Japanese automaker Toyota has had to suspend production since the March 11th earthquake and tsunami. The impact is being felt acutely in Toyota City, Japan, where the company is based. NPR's Jim Zarroli reports that many small manufacturers there survive by selling parts to Toyota, and the shutdowns are already hurting the local economy.

JIM ZARROLI: At Okuda Industries, a machine pours molten aluminum from something that looks like a large ladle and then stamps it into a mold. The company makes metal parts for transmissions, brake systems and engines, parts that eventually make their way to Toyota factories, including one in West Virginia.

The company's president is 56-year-old Kiyohito Okuda, whose family started the company more than half-century ago.

Mr. KIYOHITO OKUDA (President, Okuda Industries): (Through translator) We have grown as Toyota has grown and as they auto industry has boomed.

ZARROLI: Okuda Industries is one of hundreds of small companies in the area whose fate is tied directly to the health of the giant automaker. Okuda says in one sense, companies like his have been relatively fortunate. Since March 11th, this city, more than 200 miles south of Tokyo, has been spared the energy shortages and transportation bottlenecks that have plagued other parts of Japan.

Mr. OKUDA: (Through translator) This area is really far away from the disaster zone. It's strange to say it, but it almost feels like that happened in another country.

ZARROLI: Still, right after the disaster, he says, Toyota stopped placing orders because of production problems, and Okuda's company, which employs 120 people, had to shut down for nearly a week.

Production has slowly returned, but orders still aren't what they were.

Mr. OKUDA: (Through translator) In the past, when Toyota stopped production, it was only for a week or so, and it was much more gradual. This interruption in production happened suddenly and has lasted almost a month. So this is a big concern for us.

ZARROLI: Other companies in Toyota City have fared even worse. The local Chamber of Commerce surveyed parts manufacturers. Many say they have had to curtail production because of the Toyota slowdown or because they've had trouble getting raw materials and supplies.

And the Chamber's Yasutaka Kato says that's being felt all over the area.

Mr. YASUTAKA KATO (Chamber of Commerce): (Through translator) Toyota is a key industry around here. So when it slows production, it affects everything. People stop going out and spending money. Businesspeople stop coming to town. So the hotels suffer.

(Soundbite of music)

ZARROLI: At Tsubasaya, a restaurant near the Toyota train station, business began to fall right after March 11, says owner Hironari Takanobu.

Mr. HIRONARI TAKANOBU (Owner, Tsubasaya): (Through translator) We had a lot of large reservations, and they were canceled after the disaster. People didn't want to spend money. Now fewer customers are coming in, and it hasn't gotten any better.

ZARROLI: What makes the crisis especially challenging is how open-ended it is. Kiyohito Okuda expects to be at full production by the end of the month, but many other parts plants, especially those near the disaster zone, will take longer, and that's likely to have a ripple effect throughout the auto industry.

Mr. OKUDA: (Through translator) In order to make a car, all the parts have to be available. We can be at full production here, but if the plants in other areas are shut down, and parts are missing, you can't make a car.

ZARROLI: Okuda worries about how Toyota will respond if the crisis drags on. The danger for Toyota City is that the company will decide to protect itself from natural disasters by scattering parts production to more places. For a city so heavily dependent on the automaker, that would be a blow it might not recover from.

Jim Zarroli, NPR News, Tokyo.

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