5 Disaster Delays Hitting the Global Economy

WASHINGTON (TheStreet) -- One world disaster or political crisis may not enter the consumers conscience, but a handful happening all at once can make buyers take notice in their wallets and shopping carts.

The earthquake, tsunami and ensuing nuclear crisis in Japan have cost thousands of lives and -- according to estimates from analysts at Barclays ( BCS) and Credit Suisse ( CS), among other firms -- could cost upward of $180 million. Meanwhile, the political crisis and resulting U.S. and European intervention in Libya has crippled oil production in that country and helped U.S. oil prices soar nearly 80 cents since this time last year.

The January bombing of Moscow's busy Domodedovo International Airport that killed 37 people and the uncertain political situations in Yemen, Bahrain and Syria are all going to have an effect as well on American consumers whether they choose to read the headlines or not. The Consumer Confidence Index already dropped 8.6 points this month, but here are five more reasons events beyond the consumer's control will cause that confidence to fall even further:

A lot more layovers
Moscow's Domodedovo Airport Bombing, perpetrated by a member of a fringe group from Russia's Caucasus region, had an immediate impact on international travel, but not in the typical post-crisis fashion.

Since Domodedovo isn't a hub and doesn't pass Aeroflot planes through to other countries in the same volume that, say, Chicago's O'Hare handles United ( UAL) flights, fares to Moscow plummeted after the bombing. That's in sharp contrast to what occurred after the tsunami in Japan and during the unrest in the Middle East, where airlines who used airports there as hubs simply continued routing passengers through to their final destinations. In some cases, especially in Tokyo, fares took off after Delta ( DAL) cut nonstop routes to Tokyo's Haneda Airport, Germany's Lufthansa and Italy's Alitalia rerouted flights around Tokyo and China's Cathay Airlines cut back on its flights to Japan altogether.

"Soon after the bombing in the Moscow airport, prices to Moscow went down a lot -- in some cases to $350 round-trip," says George Hobica, founder and editor of AirfareWatchdog.com. "Fares to Tokyo actually went up after the crisis because Tokyo's a hub and most people aren't staying in Tokyo, they're flying through it."

Rerouted trips
Bahrain isn't exactly the most popular vacation spot right now, and not just among Westerners. According to the Arab News, the Abu Dhabi Tourism Authority has noticed a 90% uptick in Saudi travel to the United Arab Emirates, while that country's tourists increasingly shy away from instability in Bahrain. If you're flying into Bahrain and staying these days, you likely don't have a choice in the matter.

"Emirates and Qatar Airways are just hub airlines and just ferrying people to the Philippines and Manchester, U.K.," Hobica says. "It doesn't affect prices at all because most people flying there aren't tourists, they're servants or businesspeople and it's a must-fly situation."

While Bahrain's troubles provide a needed boost to real-estate ravaged Dubai and other spots in the UAE, Hobica suggests they may also be a boon for destinations that use Bahrain as a connecting point. Emirates alone has 102 other destinations to choose from, and passengers taking a pass on Bahrain may stay just long enough to make their connecting flight.

"Emirates isn't building all of those A380s because they expect all those people to come to Dubai," Hobica says. "They're expecting transit traffic."

Auto production gridlock
When the year began, it was estimated that 75 million cars would be produced worldwide and that the auto industry would continue its recovery. Once Japan's crisis hit, however, that estimate fell below 70 million as the world's auto companies quickly realized that nearly every new car on the planet has at least one part that's made in Japan.

GM ( GM) already has been forced to close plants temporarily in Shreveport, La., Buffalo, N.Y., and Lordstown, Ohio, due to a lack of parts from Japan. The destruction at a Japanese paint supplier, meanwhile, has hindered color choices for Ford ( F) and Chrysler customers whose Tuxedo Black Explorers and Inferno Red Dodge Durangos have paint jobs that can be done only with products from Japan.

"Most manufacturers are on a lean, just-in-time delivery where there's not a warehouse full of parts," says Michelle Krebs, senior analyst for Edmunds.com. "If they're missing a part and only have one source, that can shut down an assembly line."

The problems are infinitely worse for small Japanese carmakers such as Mazda and Subaru, who manufacture the overwhelming majority of their models in Japan and sell only a fraction of the cars that bigger Japanese companies such as Toyota ( TM) and Honda ( HMC) unload in the U.S. annually. In Subaru's case, its popular Forester is made only in Japan and could be severely affected by production delays. While Toyota certainly isn't happy about losing Lexus production, Mazda's entire U.S. sales would be lucky to meet Lexus' monthly numbers.

"Mazda appears to be the one that is most affected by their reliance on cars made in the region and sold in the U.S.," says Jesse Toprak, analyst for TrueCar. "They have only two models made outside of Japan and now are not accepting any orders from Japan until further notice, as is the case with Honda."

Estimates for U.S. auto sales remain stagnant, with TrueCar holding its estimate at 12.9 million based on the belief production should be back on line in little more than three months and that the year's auto market will right itself during the next nine months. Even though Toyota is renewing production on some models in Japan and some parts makers are back on line, though, such producers as Hitachi Electronics are still down, and nobody seems to know what to expect when the first post-tsunami cargo ships arrive from Japan in April. If shortages and production stoppages continue, prices will go up, but there's a great deal of uncertainty about just how bad the damage to manufacturers has been and what production capability will be for the rest of the year as Japan faces an unstable energy supply and a spate of blackouts.

"This is an unusual set of circumstances and one where we can't go back to the history books and cheat," Toprak says. "We see some internal memos from automakers, and even they don't know how this is going to play out."

Low-mileage bidding war
The situations in Libya and Japan couldn't have blitzed the gas-conscious driver more effectively if an NFL defensive corrdinator coach had drawn up the play.

As mentioned earlier, average U.S. fuel prices are up to $3.60 a gallon as a result of instability in Libya and elsewhere and its effect on fuel exports. That's an 80-cent hike from a year ago that's expected to worsen as the summer months approach.

If you're looking to get around those prices with a low-mileage, hybrid or electric car, production of those isn't improving either. The Toyota Prius, the Nissan ( NSANY) Leaf and the Honda Fit are among the gas sippers that come straight from Japan and are stuck there thanks to facility damage, parts shortages and production holdups. Existing supplies aren't exactly flush either, as stockpiles that stretched more than 60 days during the recession have dwindled to nearly half that in some cases.

"Going into the recession, automakers had very bloated inventory," Edmunds' Krebs says. "Well, they got religion and everybody's operating with lower inventory in the past."

As a result, it'll be even more of a seller's market for fuel-efficient cars should prolonged shortages occur. Even if the sticker price doesn't reflect it, Krebs says the consumer will have a lot less room to haggle if they're suddenly vying for a must-have car that's in short supply.

"In the flush days, there may have been two dozen Priuses on the lot," Krebs says. "If there's only a dozen, the dealer's going to get top dollar for it."

Video games on pause
The launch of Nintendo's 3DS hand-held console earlier this week seemed like a good sign it was still all fun and games for the Japanese video game industry after the earthquake and tsunami. Gamers only had to dig a few levels deeper to see the damage, though.

Nintendo pushed back the release date for its Steel Diver game for the 3DS; Konami's Powerful Golf for the same system was also delayed. Downloadable content for Capcom's Marvel vs. Capcom 3 and Ubisoft's Assassin's Creed Brotherhood has also been put on hold, while servers for online gaming in Japan such as Square-Enix's Final Fantasy servers, Sony's ( SNE) PlayStation Network and Microsoft's ( MSFT) Xbox live continue to experience delays and outages.

While it likely won't reach that level in the U.S., video game experts say it's only a matter of time until breaks in the development chain start to affect releases from Japan.

"There's going to be an extraordinary amount of pressure on product producers to manage time in affected areas," says Jesse Divnich, analyst for video game research firm Eedar. "We're going to see a lot of Japanese game makers not commit to hard street dates for any products released because there just aren't enough answers about the future of the energy situation there."

Right now Japanese game companies are being asked to conserve energy as the nation battles to stabilize its grid amid problems at inundated nuclear power plants. That means fewer active screens, rationed time for testing and quality control and elongated timetables for new releases. That's no small concession in an industry where the development process tends to be inflexible.

Amid the crisis, however, Japan's game manufacturers have been not only flexible, but extremely sensitive to the plight of their fellow countrymen. Game maker Irem threw away hours of development time and millions in funding when it canceled Disaster Report 4 for Sony's PlayStation 3 because the game opened with an earthquake destroying a city. Sony's MotorStorm: Apocalypse and Sega's Yakuza: Of The End for the PS3 were also scrapped because of their use of apocalyptic scenes and imagery.

Meanwhile, game companies including Nintendo, Sony, Microsoft, Zynga and Capcom have made large donations to Japan's relief fund, with Capcom cutting the price of its Street Fighter IV game to 99 cents in Apple's App Store and donating all of the proceeds to the cause.

Though U.S. consumers will likely face delays beyond game releases if present conditions persist and components for consoles such as the 3DS aren't produced in time, more significant delays could surface if Japan's crisis postpones September's Tokyo Game Show -- a launching point for many of the year's biggest game releases just before the holiday season.

"A large majority of sales that occur in the Western markets come from Western developers," Divinich says. "Companies like Ubisoft, EA and Activision do almost all of their game development within the North American and European markets, so we don't expect to see delays from those publishers, but we do expect to hear about more delays from Japanese developers."

-- Written by Jason Notte in Boston.

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Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.

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