BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

IntroductionThe State of the TimesSection 1 One Ordeal After Another1 The Bankruptcy of Lehman BrothersIn the 2000s, the U.S. rapidly recovered from thebursting of the dotcom bubble, and China and otheremerging countries became the workhorses that led theworld economy as it continued to grow. In Japan, exportsincreased as the U.S. economy and Asian economiesstarted to recover and Japan headed toward a moderatebut prolonged economic expansion. Despite a temporaryadjustment phase, the Japanese economy was supportedby exports and business investments, bringing the longestpostwar economic expansion in history.However, the subprime loan problem in the U.S. in2008 led to the bankruptcy of Lehman Brothers, one ofthe major U.S. securities companies. This precipitateda global financial crisis known in Japan as the“LehmanShock”that quickly and directly hit the world economy.The rapid decline of foreign demand and the appreciationof the yen seriously affected Japan’s economy, so muchso that the situation prompted economy watchers todescribe it as“a great depression seen only once in acentury.”Toyota Motor Corporation (TMC) was not ableto dodge the impact: its financial results for the fiscalyear ending March 2009 showed a deficit referred to asthe Toyota shock.2 Disaster and Six AgoniesOn March 11, 2011, Japan suffered an earthquake ofmagnitude 9.0 on the Richter scale with an epicenter offthe coast near Sanriku. The earthquake, together withits accompanying tsunami tidal waves, devastated ahuge part of the Pacific Coast of the northern Kanto andTohoku regions. Tokyo Electric Power Co.’s FukushimaNo. 1 Nuclear Power Plant lost power, which caused ameltdown of the core in a nuclear accident involvingradioactive leaks. The earthquake left more than 18,000people dead or missing and 400,000 buildings eithernearly or totally destroyed. In autumn the same year,Thailand, whose economic ties with Japan were strongand where many Japanese firms had a foothold, sufferedmassive floods that severely damaged its economy withsuspensions of factory operations and shutdowns of thetransportation infrastructure.Concurrent with these natural disasters were astrong yen; excessive employment regulations inJapan with prohibitions on employing temporaryworkers in manufacturing industries. For example, highcorporate taxes, increasingly stringent environmentalregulations,delays in executing free-trade agreements,and unstable power supply. These six problems cameto be known in Japan as the six agonies inflicted onJapanese enterprises. Worldwide, other economieslikewise faced ordeal times. The 2009 Greek fiscal crisis,for instance, triggered the European debt crisis.Market shock at Lehman Brothers bankruptcy Photo: AP/AfloGreat East Japan Earthquake Photo: The Mainichi Shimbun/Aflo118