Japanese Industries Hurt by Massive Earthquake

SITTING EMPTY: A man looks for food among empty shelves in a shop in Fukushima, Japan, on March 13. A shortage of supplies is forcing many Japanese businesses to temporarily shut down. Philippe Lopez/AFP/Getty Images

After last Friday’s massive magnitude 9.0 earthquake that struck northern Japan, a slew of Japanese industries and businesses are expected to be negatively impacted as the dust settles.

From automakers to electronics manufacturers, many corporations have opted to shut certain factories in the affected area, in the short term, which will affect 2011’s annual production figures.

The situation could be complicated further by a potential nuclear meltdown at Tokyo Electric Co.’s nuclear reactor at Fukushima, according to reports, which experienced an explosion on Saturday local time.

A number of Japanese automakers suspended production on Monday, due to difficulty in supply procurement, and the need to ensure employee safety. The situation has been aggravated by rolling blackouts reported in several regions in northern and eastern Japan.

Japan’s second biggest automaker, Honda Motor Co., said in a statement that it would shut down production at four of its five Japanese assembly plants on Monday. Its motorcycle plant will remain open. It has not yet decided what to do for later this week.

In an announcement on its corporate website, Toyota Motor Corp., the world’s biggest automaker, said that it would suspend all production on Monday, including factories of its subsidiaries such as Central Motors, Hino Motors, and Kanto Auto Works Ltd. According to the company, the measure is to check whether its workers are safely accounted for.

Nissan, the third-biggest automotive company, said it would also suspend production at its three domestic factories. The above manufacturers are joined by Suzuki and Mitsubishi Motors in plant closings. Mazda Motor Corp., whose plants are based mainly in western Japan, would operate as normal, the company said.

Nippon Steel Corp. has suspended operation at a major steel mill in Iwate, which was affected by the tsunami caused by Friday’s earthquake.

Electronics manufacturers Sony Corp. and Panasonic Corp. both have closed a portion of their production facilities for Monday. In a statement, Toyo Tire & Rubber Company said that it is currently assessing its production at its Sendai plant due to a power failure.

Shares in most Japanese companies fell last Friday. The U.S.-listed shares of Toyota Motor Corp. fell 2.1 percent to $85.65 on Friday, as traders bought but put options to hedge against their long positions. The American deposit receipt shares of Sony Corp. also dropped 2.4 percent Friday.

As a whole, the iShares MSCI Japan Index ETF fell 1.6 percent last Friday on speculation that damage from the earthquake would affect Japanese economic growth.