Japan Earthquake and Tsunami
The impact of the March 8 earthquake and tsunami in Japan lingers in multiple venues, from the lives of the 80,000 people unable to return to their homes to a reshaped world auto industry.
In Japan, Fukushima, once a rural area known for scenery, has gained note as the site of a tsunami that killed 20,000 people and of a subsequent nuclear disaster, which forced more than 80,000 from their homes -- with no immediate prospects of return.
Around the world, the corporations that became a symbol of Japan's industrial might were crippled by production shortages. In particular, Toyota (TM - Get Report) recently lowered its global sales outlook to 7.38 million vehicles for the fiscal year ending March 31 and faces the potential loss of its standing as the world's largest automaker, reflecting not only the impact of the Japan disasters but also a rising yen and flooding in Thailand, home to key suppliers.In the U.S., during the first 11 months of 2011, light vehicle sales rose 10.4%, but because of inventory shortages, Toyota sales were down 7.5% while Honda's (HMC - Get Report) sales were down 5.3%. "Consumers stopped believing in availability" of Japanese-made cars and "shifted to domestic and Korean manufacturers" said Edmunds.com economist Lacey Plache. Today, the jury is out on whether the Japanese manufacturers can regain their losses, Plache said. "The main factor to shifting share is new and compelling vehicles," she said. "The new Camry was fine, but not a show-stopper. And Honda is having issues with its new models. Not surprisingly, trans-Pacific travel from Japan declined after the disasters. In the immediate aftermath, Delta (DAL - Get Report), which leads U.S. airlines in service to Asia and Japan, reduced capacity to Japan by 15% to 20%. By the third quarter, however, travel from Japan to the U.S. was largely back to pre-disaster levels, while U.S. travel to Japan was still down 10% to 15% but was picking up, the carrier said. During the third quarter, Japan's economy showed strong signs of recovery, growing at a 6% annualized rate, marking its first expansion in four quarters. Exports jumped 6.2% and consumer sentiment rebounded. "Japan is recovering on a path that we feel pretty comfortable with," said Delta President Ed Bastian, during a December investor conference. He said Delta's 2012 Japan revenue should improve by about $100 million over 2011 levels. --Ted Reed