Japanese Lawmakers Not So Interested In Subsidies...Yet

January 16, 2009
Congress wasn't exactly thrilled about the recent bailout, but clearly legislators understood that something had to be done if the American auto industry was to survive. Folks on both side of the aisle also recognized that this "something" had to be severe, given the cashflow problems that at least two of the Big 3 were (and are) experiencing. Around $700 billion later, many are breathing easier.

In Tokyo, however, Japanese lawmakers aren't planning to follow the same course of action--at least not now. Sure, Toyota, Honda, and other domestic automakers are having serious troubles, but as government bigwig Noriyuki Shikata recently said to reporters in Detroit, "We regard the auto industry as very independent from the government.... A company like Toyota has accumulated some cash and should be able to survive." Oh, snap.

In fact, the Japanese aren't just wary of doling out money to corporations; they're miffed that the U.S. has done so, arguing that the bailout gives American automakers an unfair advantage in the marketplace. (European heads of state have made similar grumblings--even though France, Germany, and Russia all helped their own automakers in one way or another.) The argument goes something like this: Toyota & Co. depend heavily on U.S. sales for their well-being. By giving funds to only American manufacturers, congress has caused direct financial harm to Japanese companies and, indirectly, to Japan itself.

For now, Japan is taking a wait-and-see approach to its own automakers and to the U.S.  bailout. Said Shikata, "We understand that there needs to be a major effort to save the domestic American automakers. We are not in a mood to oppose such efforts." Surely I'm not the only one who hears the word "yet" at the end of that sentence?

[source: DetNews]

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