Japan’s trade and economy minister said yesterday that his nation remained watchful of fallout from Chrysler’s bankruptcy because of possible damage to Japanese parts makers.
“We must take appropriate measures if they are being hurt,” Economy, Trade and Industry Minister Toshihiro Nikai said at a news conference on nationally televised news.
Nikai promised the government would “respond appropriately,” while declining to elaborate.
PHOTO: REUTERS
Government aid to troubled suppliers, mostly small and mid-sized companies in Japan, remains a possibility at a time when overall assistance to troubled businesses has been earmarked in response to the recession set off by the US financial crisis.
Japanese parts suppliers do business with major manufacturers such as Toyota Motor Corp and Honda Motor Co. They also count on business with US companies and have also set up offices and plants in the US.
Losing business with Chrysler and the possible broader impact of the bankruptcy on the entire US auto industry could become a problem for Japanese suppliers already struggling amid hard times.
“There are quite a number of people and companies in Japan that are closely linked with Chrysler’s business,” Nikai said.
Chrysler, the third-largest US automaker, filed for Chapter 11 bankruptcy protection in New York on Thursday after months of surviving on government loans. It is hoping to reorganize its business and build cleaner cars through an alliance with Italian automaker Fiat.
The US’ third-largest car manufacturer’s bankruptcy filing came after a group of creditors defied government pressure to wipe out Chrysler’s debt. The company plans to emerge in as little as 30 days as a leaner, more nimble company, with Fiat potentially becoming the majority owner in the future. In return, the federal government agreed to give Chrysler up to US$8 billion in additional aid and to back its warranties.
“It’s a partnership that will give Chrysler a chance not only to survive, but to thrive in a global auto industry,” US President Barack Obama said from the White House.
Chrysler said it would close all its plants starting on Monday and they will stay closed until the company comes out of bankruptcy. At least three Detroit-area factories sent workers home on Thursday after suppliers stopped shipping parts over fears they would not be paid.
Chief executive Robert Nardelli announced he would step down when the bankruptcy was complete and take a post as an adviser with Cerberus Capital Management LP, which would give up its 80 percent ownership of Chrysler under the automaker’s plan. Vice chairman Tom LaSorda, who once ran the company when it was owned by the German automaker Daimler, said he would retire.
Fiat will initially get 20 percent of the company, but its share could rise to 35 percent if certain benchmarks are met. Fiat said on Thursday it could get an additional 16 percent by 2016 if Chrysler’s US government loans are fully repaid. Fiat will also get access to the North American market through Chrysler dealerships.
Fiat chief executive Sergio Marchionne said he planned to spend time meeting Chrysler employees and touring its plants over the next few weeks.
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