VZCZCXRO8149
RR RUEHFK RUEHGH RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1238/01 1530843
ZNR UUUUU ZZH
R 020843Z JUN 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 3398
INFO RUEHRL/AMEMBASSY BERLIN 1646
RUEHBY/AMEMBASSY CANBERRA 3196
RUEHUL/AMEMBASSY SEOUL 5620
RUEHLO/AMEMBASSY LONDON 2437
RUEHFR/AMEMBASSY PARIS 6531
RUEHGP/AMEMBASSY SINGAPORE 7402
RUEHOT/AMEMBASSY OTTAWA 9824
RUEHNAG/AMCONSUL NAGOYA 1936
RUEHNH/AMCONSUL NAHA 6672
RUEHOK/AMCONSUL OSAKA KOBE 8138
RUEHFK/AMCONSUL FUKUOKA 4337
RUEHKSO/AMCONSUL SAPPORO 4866
RUEHHK/AMCONSUL HONG KONG 6784
RUEHGH/AMCONSUL SHANGHAI 0595
RUEHBS/USEU BRUSSELS
RUEHIN/AIT TAIPEI 7353
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC

UNCLAS SECTION 01 OF 02 TOKYO 001238 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/J, EEB/TRA 
PASS TO USTR FOR AUSTR CUTLER AND M. BEEMAN 
PASS COMMERCE FOR K. ROTH AND D. BARZDUKAS 
 
E.O. 12958: N/A 
TAGS: EIND ETRD PREL WTRO JA
SUBJECT: JAPAN TAKING WAIT-AND-SEE APPROACH TO GM BANKRUPTCY 
 
SENSITIVE BUT UNCLASSIFIED.  CONTAINS PROPRIETARY 
INFORMATION. 
 
¶1.  (SBU) SUMMARY:  Japanese officials and auto industry 
representatives expressed concern at the announcement of 
General Motors'  bankruptcy, but not alarm.  Ministry of 
Economy, Trade and Industry (METI) Minister Toshiro Nikai 
pledged unspecified financial support for Japanese small and 
medium-sized manufacturers affected by GM's situation, but 
METI and Ministry of Foreign Affairs (MOFA) officials 
downplayed the Minister's reported statement and said the GOJ 
does not see a need for specific action at the moment.  While 
the GOJ has been monitoring the situation in the auto sector 
for months, working level officials report they do not see a 
serious impact on Japanese automakers.  The head of GM's 
Japanese unit said the firm will continue operations in 
Japan, while competing automakers and auto parts 
manufacturers expressed hope for a quick rebound of the U.S. 
auto industry.  END SUMMARY. 
 
--------------------------------------------- 
NEGLIGIBLE IMMEDIATE IMPACT; SOME CONCERN FOR 
PARTS MANUFACTURERS 
--------------------------------------------- 
 
¶2.  (SBU) Neither GM nor rival auto manufacturers forecast a 
direct, immediate impact on operations in Japan as a result 
of GM's formal Chapter 11 filing and restructuring 
announcement.  General Motors Asia Pacific (Japan) President 
Rick Brown told a press conference the firm will continue 
operations as before under the new GM parent company and that 
the Japan unit anticipates no layoffs.  Brown added the 
restructured GM will retain a joint-venture in Canada with 
Japanese automaker Suzuki Motor Corporation.  According to 
media reports, Suzuki's President and CEO, Osamu Suzuki, 
stated he expects the bankruptcy filing's impact to be 
limited.  (Note:  According to GM headquarters' June 1 press 
release announcing the Chapter 11 filing, none of GM's 
operations outside the U.S. are included in the U.S. court 
filings or court-supervised process.  End note.) 
 
¶3.  (SBU) Toyota Motor Corporation President Katsuaki 
Watanabe reportedly said his firm will continue to operate 
the New United Motor Manufacturing Incorporated (NUMMI) 
joint-venture in California with GM and that Toyota would 
consider assisting GM if requested.  Toyota's America's 
Project Division General Manager Hiroyuki Fukui also told 
Consulate Nagoya his firm has talked with GM about the future 
of NUMMI, which employs about 5,000 people, and agreed to 
continue the joint-venture.  The President of Isuzu Motors 
Ltd., which produces light trucks for GM North America on a 
contract basis as well as diesel engines and cabin 
components, made a similar offer of support in a statement to 
the media. 
 
¶4.  (SBU) Some media attention in Japan has focused on the 
fate of auto parts manufacturers who serve GM.  An analysis 
by a U.S. research firm reportedly found approximately 60 
percent of the 158 firms that supply GM also supply Japanese 
automakers.  Makoto Aikawa, Sales and Marketing Deputy 
General Manager at Denso Corporation, Japan's largest auto 
parts manufacturer, told Consulate Nagoya his firm hopes GM 
will be reborn as a leaner, albeit smaller, company.  Denso, 
which has about USD29 million in accounts receivable with GM 
and is listed among GM's top fifty creditors, will proceed 
with the Critical Vendor Program that will be implemented 
following the Chapter 11 filing.  Aikawa also said he is 
concerned about potential protectionism that could develop in 
the U.S. that would encourage consumers to buy only products 
 
TOKYO 00001238  002 OF 002 
 
 
manufactured in America by genuinely "American" firms.  He 
noted Denso wishes to continue business with GM and has 
manufacturing plants in the U.S. 
 
¶5. (SBU) Separately, Honda External Affairs Division Deputy 
General Manager Naoto Muraoka told emboff Honda does not 
anticipate a significant impact on its operations;  the vast 
majority of Honda's suppliers are separate from GM.  Muraoka 
also expects the industry will recover from its current 
problems, albeit slowly. 
 
---------------------------- 
GOJ MONITORING THE SITUATION 
---------------------------- 
 
¶6. (SBU) According to media reports, METI Minister Nikai 
stated June 1 the GOJ is prepared to use public funds to 
support Japanese small and medium enterprises affected by 
GM's bankruptcy.  A METI automobile division official later 
told emboff Nikai's statement was an off-the-cuff comment to 
reporters.  She claimed that if the need becomes apparent, 
the GOJ will provide support to Japanese firms struggling 
with cash flow problems due to the GM bankruptcy.  METI has 
been monitoring the situation and exchanging information with 
Japanese auto-related companies since last fall, the official 
said, but to date METI has not received negative reports from 
Japanese industry.  The official does not anticipate a 
serious impact on Japanese automakers. 
 
¶7.  (SBU) Separately, a MOFA Second North America Division 
official told emboff Nikai's statement was likely an 
unofficial rendering of official press guidance that the GOJ 
will "continue to look into the situation and deepen our 
examination in order to avoid disorder or confusion in 
Japanese auto and related industries."  The official added 
Nikai's comment apparently surprised officials within METI as 
well. 
 
¶8.  (U) Consulate Nagoya contributed to this cable. 
ZUMWALT