TOYOTA CITY, Japan — Cecelia Kobashigawa came to the Toyota City job center with four friends. They're all in the same boat – suddenly fired from a Toyota subsidiary due to the global economic slowdown. Her eyes welled up as she told us about her 19-year-old daughter and 15-year-old son and how long they'd survive without her working. "It's so tough," she said, clutching handouts from the center on job leads.
TOYOTA CITY, Japan - On what was to be a historic day, halting all of Toyota's Japanese assembly lines, the automaker announced late in the day it would keep one line running. The late news sent copy editors and reporters to their laptops erasing headlines like "historic shutdown," but it did little to quell the pain for the tens of the thousands of workers idled across Japan as nearly every line stopped producing autos and auto-related equipment.
The scene is quiet these days in Toyota City.
Nowhere is the silence more deafening than in Toyota City, home and birthplace to Toyota Motor Corporation. Factories are shuttered, workers idled, in an attempt to bring production in line with falling global demand.
The day is particularly ominous for assembly line worker Takayuki Yoshikawa, who has already been told he's out of a job and home in May. Yoshikawa resides in a Toyota owned dormitory. "I don't know what to do," says Yoshikawa. "I could go back to my hometown, but there are no jobs there, either."
Toyota, now the world's largest automaker, plans 10 more days like this, spread out over the next two months. Toyota's incoming president, Akio Toyoda, called the current economy "unprecedented, the likes of which haven't been seen in 100 years."
Toyota also says the scheduled assembly line shutdowns are an attempt to save what jobs the automaker can. "The production suspensions scheduled for Japan in February and March is part of our effort to keep production in line with market demand. We are carrying out these suspensions fully aware of the necessity to even out production volumes and maintain employment levels."
Analysts say while painful, these shutdowns may be unavoidable. "Everywhere, almost everywhere, things are getting worse and worse and worse," says Koji Endo, Credit Suisse auto analyst. "Under that kind of circumstance, you have to control your cost. Maybe try to shrink temporarily."
The cost control is having a damaging effect on Toyota City public coffers. The city of 400,000 estimates it will lose 90 percent of its tax dollars as Toyota falls into the red and pays fewer taxes. It comes at a time when Toyota City is seeing historic levels of unemployment. This region, according to Toyota City, carries the dubious distinction of having the highest rate of unemployment in Japan.
Alberto Dilone, already fired from a Toyota parts subsidiary, showed up at the Toyota City job center to search for a new job.
"Kubi," says Dilone, slicing a finger across his throat. Dilone says half the people in his plant have been fired and the jobs in Toyota City are scarce. Like the hundreds of unemployed filtering through the center everyday, he's leaving with no new job leads.
TOKYO, Japan — At the Toyota City job center, today's supervisor, Mr. Kawajiri, is in a mild panic. The number of people who need a job has doubled in just months, and their numbers seem to grow with each passing day. It's hard to keep up, he says, and it's often overwhelming.
This one-industry town has ridden high with Toyota Motor Corporation for decades, exploding in size and wealth. Workers enjoyed lifetime employment with enough cash to care for their entire families.
Town coffers filled with each profit earnings report from the ambitious automaker. That was all before the global economic downturn.
Today, for the first time in the world's biggest automaker's history, all of its Japanese assembly lines sit idle.
The seven Toyota City factories are silent, a deafening sound in this city of 400,000 residents.
Workers who pride themselves on the Toyota philosophy of "kaizen," which means constant improvement, are improving nothing today. They're sitting at home or passing the time in Toyota City's main shopping district.
But no one wants to spend any money, because they're not sure when or if they'll be showing up in Mr. Kawajiri's job center.
"I don't want to complain, but it's hard," says Kawajiri. "I take it day by day, person by person, and try not to think of all the people who are unemployed right now. If I do, it's more than I can handle."
TOKYO, Japan — Before you get to the front door of Canon's headquarters in Tokyo, you can hear it – a virtual stampede of employees pouring out of the building right at 5:30pm. You might think it's not so unusual. The day is over and workers should go home, right? But this is Japan, where the 12 hour workday is the norm. Sure, you can go home at 5:30pm, but you better pack your guilt with your briefcase. That is, except at Canon, twice a week.
Japan’s health ministry reports the country’s birthrate is well below that needed to maintain the population.
At Canon, the company shuts off the lights and turns off the heat to force employees out by 5:30pm. There are two reasons – to cut overtime, but also an unusual one: to encourage employees to have more babies. Watch Kyung Lah's report on Canon's initiative
The thinking goes, while there's less work to do in a historic recession like this one, corporations might as well get to fixing another major social problem in Japan: the low birthrate. Keidanren, Japan's largest business group with 1300 major international corporations as members, issued a plea to its members to let workers go home early to spend time with their families and help Japan with its pressing social problem.
Japan's Ministry of Health, Labor and Welfare reports the country's birthrate is 1.34, well below the 2.0 needed to maintain the population. Part of the problem is the expected 12 hour workday. Toss in the high cost of living and the social rigidity towards women and parenting, and you have a major problem on your hands. Compounding the problem, Japan is aging at the highest rate of any country in the world. The world's second largest economy, say many analysts, faces its greatest threat from its own social problems, not an outside force. Without some sort of active change in the current social and work structures, warn sociologists, Japan's population will buckle under its population proportions.
The 5:30 p.m. lights out program is one simple step towards helping solve that problem, with the added benefit of slashing overtime twice a week across the board. Employee Miwa Iwasaki isn't complaining, saying, "It's great that we can go home early and not feel ashamed." If you can feel good at work a couple of times a week, that's a rare silver lining in the current global economic storm.
TOKYO, Japan - Everybody I know has that odd uncle or aunt who seems to magically ruin the next wedding or family holiday meal; the relative who drinks too much or maybe says inappropriate things, wrecking what should be a pleasant night for the family. At Tokyo's famed Tsukiji Fish Market, it's not a family member but misbehaving tourists.
A tourist snaps a picture at Tokyo's famed Tsukiji Fish Market.
Japanese TV caught drunken tourists from London licking a US $10,000 tuna at the before-dawn auction.
A few minutes later, the camera crew videotaped French tourists joyriding on a fisherman's trolley.
Such behavior led the Tokyo Metropolitan Government to ban tourists from the market for one month, trying to give its multi-billion dollar tuna industry a brief respite.
The market estimates US$18 million worth of fish pass through Tsukiji everyday and are auctioned before dawn. That's US $4.8 billion a year.
That fish passing before point-and-shoot tourist cameras become sushi at some of the world's premier restaurants seems to elude some tourists, who might think they were at Disneyland, the working market says.
"The tourists sometimes bother us," says tuna wholeseller Junichi Honma, who bought US$50,000 worth of tuna at this morning's auction.
"The time is limited for the auction, only about an hour, and they think this is just a sightseeing show. This is our livelihood."
The market re-opened for tourists today and a few dozen tourists returned. Most were well-behaved, though a couple did nearly step on a US$8000 tuna.
They all seemed delighted to get a rare glimpse of commerce from the sushi nation of the world.
But for it to continue, the market is asking its international guests to use common sense while visiting.
For example, drinking at one of Tokyo's all-night clubs and immediately arriving for the tuna auction at 5:30 a.m. probably will make you a poor guest.
The market says it will try to keep the auction open for its visitors but adds that it all depends on future behavior.
So, for the sake of the majority of good visitors, please don't be that inappropriate relative. You've heard your mother complain about it.
It doesn't make her or this world-famous market very happy.
Watch my report of the footage that sparked the tourist ban.
TOKYO, Japan – The 61-year-old construction worker had walked by these sorts of people before: Bums he always quietly called them. Homeless, these men and women slept in the parks and looked as if they didn't have much to look forward to.
A construction worker joined a long line of people waiting for a hot meal in Tokyo's Hibiya Park.
As he now stood in line for a hot meal in Hibiya Park, the man told us he couldn't believe he was one of them.
"I wasn't ready when this happened," he said, breaking down in tears. "It happened all of a sudden. That's why I ended up here."
The construction worker, who asked us not to use his name, was told on Christmas Eve that his company was bankrupt. He was already living paycheck to paycheck in Tokyo, one of the world's highest rent cities. One of the benefits of the job, he said, was corporate housing. Now he was out of a job and a home.
The man is a temporary worker, a class of first-hired-first-fired employees. According to Japan's government, temporary workers make up one-third of the country's labor force. They have fewer employment protections than permanent workers, and they are bearing the lion's share of the recession's pain. Japan's government says between October 2008 and March 2009, some 85,000 temporary workers will be out of a job. Not all of those workers will end up homeless, but in one of the world's most expensive cities, the line between comfort and poverty is thin.
"I think globally it's going to get quite a bit worse before it gets better," says John Vail of Nikko Asset Management. "You hear numbers like a 9 or 10 percent unemployment rate in the [United] States being mentioned. Japan has a low unemployment rate, but it's going to rise quite significantly. People will be losing their jobs; companies will restructure."
Restructuring has already begun at Japan's major companies like Sony, Canon, Toyota, and Honda. Those export-driven companies depend on the hunger of the global consumer. But as the credit crunch narrows the ability to borrow and consumer confidence plummets around the world, those companies are posting record losses and looking to staunch the red. Job cuts are part of the equation. Toyota announced this week it would try and save as many full-time jobs as possible but that 3000 temporary workers would be cut by the end of 2009.
The tent city in Hibiya Park stayed open for a few days. The government offered job counseling and suggestions of new places to stay. The former construction worker says he's optimistic that he'll land another job in a month or so. Until then, he says, he'll try to do something he used to take for granted when he had a job - stay warm through Tokyo's winter.
TOKYO, Japan - "Mon dieu!" The French woman put down the package of six tomatoes, stared at her husband and shook her head. A few minutes later, another couple wheeled down the produce aisle, said some phrase in a language I didn't quite understand, and walked away from the cilantro. I was in my own sort of dilemma: what eloquent phrase to accurately express my sticker shock at the price of an avocado.
The faces are from around the world at my neighborhood grocery store - Korean, Chinese, European, Canadian and American. These expatriates are paid in their nation's home currency and shop here, at this grocery store. It's a rare jewel in Tokyo, where expatriates can have a slice of home when you're tired of eating sushi. And in this small store, you get a local taste of the global pain being felt by Japan's most powerful multi-national corporations: trying to compete in a world where the Japanese yen is stronger than virtually every other currency in the world.
You hear two primary reasons why Japan's exporters are getting hammered in the global economic slowdown: weakening demand by the world consumer and the strong yen. The yen is so strong that analysts say when it ticks up just one level, Toyota loses US$350 million. A year ago, the yen was trading at 120. After October, when the yen surged and every currency plummeted, to see the yen now hover at 85 is no longer a big surprise. But for the company trying to staunch the red ink amid a recession, the strong yen is landing a double-whammy body blow to corporate bottom lines. The currency problem is making it even tougher for them to look toward recovery and tougher to compete in the current global economy.
Back at my little grocery store, you also see far fewer Chinese faces. Last summer, Japan bet that the newly rich Chinese tourists would make up a majority of the tourists into Japan, even setting up a new tourist bureau. But the currency has changed that prognosis, as tourism plunged. The price of food, the price of a hotel stay, the price of virtually everything is higher if you're paid in a different currency, even if the yen price appears unchanged.
"It could all be worse," said an expat I recently met who hails from Peoria, Illinois, USA. "You could be going home like me." He works for a company based in Illinois, and has been told to pack his bags and head back to the Midwest. This move was something he hoped to avoid because despite its tremendous cost, Japan offers a fascinating overseas experience. But that cost is making it no longer attractive for his employer to keep him overseas. Companies based in Japan, such as Toyota, Honda and Nissan, don't have that option. They just hope the monetary policy will change in Japan and something will help bring the yen somewhat in balance with the other world currencies.
TOKYO, Japan - When you have too much inventory, you need to clear it out. That's fairly basic stuff of managing any business, whether it's your corner meat market or a multi-billion-dollar corporation.
If you have too many cars, you have to stop making them.
Toyota Motor Corporation is experiencing such basics of running a business. American consumers don't feel like buying, resulting in a Toyota U.S. inventory surplus that's double what it was just one year ago. So if you have too many cars, you have to stop making them.
Toyota announced all of its 12 owned and operated factories in Japan will stop running for 11 days, spread out over the months of February and March. This rare move by Japan's number one automaker is on top of three previously announced days of work stoppages in January. For those designated days, Toyota will stop building cars.
Toyota's spokesman Paul Nolasco says the stoppages aim to accomplish two things: Bring output in line with demand and avoid more layoffs. Toyota says it will be forced to fire 3,000 temporary workers by the end of 2009, but hopes to save the jobs of full-time employees.
This was unthinkable just a year ago, when Toyota was noting record profits. What a difference a year makes. Yet industry analysts say Toyota is still better poised than its American and worldwide competitors to ride out this global recession. So if things are this bleak at Toyota, analysts say this bodes poorly for everyone underneath Toyota, including all the raw material suppliers and subsidiaries.
"The best thing about 2008 is that it's over," said Jim Lentz, president of Toyota's U.S. sales unit in a conference call announcing U.S. sales figures. It's a sentiment shared by many in Japan's export-driven economy. Unfortunately, 2009 is already getting off to a rough start.
TOKYO, Japan – As Toyota goes, so does Japan's economy. That's just one of the witty sayings you hear tossed around financial circles in Tokyo. That saying held quite a bit more grit than wit as Toyota announced that for the first time in its modern history, the automaker will post an operating loss for the fiscal year. Not just a small loss, but a major one totaling about $1.7 billion; a stunning turnaround for a company that one year ago posted record profits. In the words of Credit Suisse auto analyst Koji Endo, this is "the worst ever."
He didn't just mean for Toyota, but for the market overall. Toyota is Japan's winner, the one that always sets the standards and breaks the record books, the one company that others measure themselves against. So if Toyota is struggling, smaller and weaker companies around the world are faring even worse.
And as the largest automaker in Japan, Toyota's balance sheets tell the story of Japan's export-driven economy. Japan's government announced a trade deficit for the second month in a row. Global exports dropped by 26 percent and US exports plunged 33 percent. The domestic economy can't recover without global demand increasing, agree analysts.
So yes, the news is history-making and head-turning from Toyota. But it also paints a gloomy picture of how deep Japan's recession will be and how tough it will be to recover.
KISHIKAWA, Japan - You have to look pretty carefully for the straight-out good news when it comes to the global economy.
Tama the cat, in her conductor's hat.
We had to travel six hours outside of Tokyo to end of a country train line to find it. I should say find her, because to call Tama the cat an "it" might throw the town of Kishikawa into an outright upheaval.
Kishikawa is quite protective of Tama, for the little cat has singlehandedly boosted its local economy last year by more than $10 million. That is U.S. dollars, in case you're wondering. Watch my report on Tama the cat
Tama's strange tale begins a little more than a year ago, when the Wakayama Railway heard about the friendly cat hanging out at its train stop.
The railway gave Tama the title of "Super Station Master" and built her a cushy home at the train stop. She got her own custom-made conductor's hat. The rail line started putting the cat in the hat on its posters. And a star was born.
Japan, whose official ambassador is Hello Kitty, went wild. Japanese television aired specials on the special cat. A day-in-the-life book and documentary quickly followed. The tourists started coming, traveling hours upon hours by train, carrying fistfuls of cash and buying up the town's new Tama merchandise with vigor.
Kishikawa is defying the odds: Seeing a boom in its local economy amid a national and global slowdown.
The town's Buddhist monk calls it an "accident of life" and suggests other small towns look inward to discover what's special about them.
But why did this happen in the first place? Are the Japanese that cat crazy? Perhaps, but the truth may be a little more complicated.
A businessman who took the day off work to travel hours to get a photo with Tama told me it's a chance to take a break from all the problems facing Japan. For just a few hours, he said, it's a chance to disconnect and enjoy a little town that's seeing unusual and unexpected success.
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