Sony, Toyota Shut Factories After Power Shortages Follow Earthquake Damage
Japanese manufacturers including Sony Corp. (6758) and Toyota Motor Corp. (7203) closed plants today after the nation’s strongest earthquake damaged factories and crippled nuclear power plants, causing electricity shortages.
Sony, Japan’s biggest exporter of consumer electronics, halted operations at 10 factories and two research centers because of power outages and damages, said Mami Imada, a spokeswoman for the Tokyo-based company. Toyota, the world’s largest automaker, said it closed all 12 factories in Japan through Wednesday, and its auto-body makers’ plants are closed today. Honda Motor Co. said it would stop output at plants in four locations.
Japan worked to contain an emergency at a nuclear plant north of Tokyo as local police said the death toll from the March 11 earthquake and tsunami may top 10,000. Tokyo Electric Power Co., battling possible meltdowns at its nuclear reactors, planned rolling blackouts in Tokyo and eight surrounding prefectures to conserve power.
“We don’t know how long it will take for manufacturers to return to normal operations, with the current situation at the nuclear power plants,” said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities Co. in Tokyo. “If they can resume output, they can sell as the U.S. economy is signaling a recovery.”
Toyota’s profit may be reduced by 6 billion yen ($73 million) for each day it halts production, Goldman Sachs Group Inc. estimated in a report. Honda and Nissan Motor Co. may each see a reduction of 2 billion yen a day, according to the report.
Toyota fell 7.9 percent to 3,310 yen as of 1:35 p.m., headed for the biggest drop since December 2008. Sony plunged 8.9 percent to 2,557 yen, while Japan’s benchmark Nikkei 225 Stock Average declined 6.2 percent.
“It’s panic selling,” said Toshikazu Horiuchi, a market analyst at Cosmo Securities Co. in Tokyo. “No one knows the complete picture yet on how big the damage will be from the earthquake.”
Toyota closed all 12 plants from March 14 to March 16 to make sure its employees and families are safe, said Shiori Hashimoto, a Tokyo-based spokeswoman for the Toyota City, Japan- based company. The company is conducting surveys of plants, it said in an e-mailed statement.
Toyota affiliate Denso Corp. (6902), Japan’s largest car-parts maker, shut almost all of its factories in Japan, said Goro Kanemasu, a company spokesman. The Aichi prefecture-based partsmaker hadn’t decided about operations tomorrow, he said. The shares declined 7.2 percent.
Canon Inc. (7751), the world’s largest maker of cameras, said yesterday it would suspend operations at eight production and development facilities in northern Japan. It fell 6.1 percent in Tokyo trading. Nikon Corp. (7731) halted four plants in Miyagi and Tochigi prefectures and is assessing the impact on earnings, it said today in a statement. Nikon shares dropped 9.1 percent.
Toshiba Corp. (6502) halted five plants due to power outages and closed one plant because of damages from the earthquake, the Tokyo-based manufacturer said. Shares of the company, which makes nuclear power plants, plunged 16 percent.
Renesas Electronics Corp. (6723) halted operations at seven factories in the Tohoku and Kanto regions because of quake damage and outages, Makie Uehara, a spokeswoman for the Kawasaki-based maker of electronics components, said today by phone.
Fujitsu Ltd. (6702), the maker of semiconductors and computer equipment, halted 10 plants in northern Japan as well as the greater Tokyo region, it said today in a statement.
Japan Airlines Corp., the nation’s biggest carrier, said it would resume flights to some northern airports tomorrow, following cancelations after the earthquake.
East Japan Railway Co. (9020), which operates trains in the Tokyo region and northern Japan, was among the rail and subway operators that cut services by as much as 80 percent today around the capital.
Asahi Breweries Ltd. (2502), Japan’s biggest brewer by volume, will reduce production at a plant in Kanagawa prefecture by 50 percent because of blackouts, said Takayuki Tanaka, a spokesman for the Tokyo-based company. It has halted operations at factories in Fukushima and Ibaraki prefectures.
“The market will remain weak,” Matsuno said. “Japan’s economy will be hurt for a while, and then will show a big recovery on rebuilding efforts.”
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