Indonesia's Little Engine That Could...Now Can't

At the time, William Soeryadjaya could have been called crazy. It was 1974, just after anti-Japanese feeling in Indonesia exploded into violent protests. Rioters were targeting Japanese imports and torching Toyotas imported by Soeryadjaya's P. T. Astra International. They even trashed the company's Jakarta showroom. But the tough commodities trader bulled ahead on a manufacturing joint venture with Toyota Motor Corp. anyway. He was determined to build Astra into an industrial power.

Until recently, the tie-up was looking like a winner for Indonesia and Japan. Of the 3 million vehicles now cruising Indonesia's roads, a quarter are Toyotas. Astra was seen as the brightest star in booming Southeast Asia, boasting of banks, plantations, and group sales of $3 billion. The group's management and the potential of Indonesia, with its domestic market of 183 million people and vast pools of cheap labor and natural resources, dazzled foreign analysts. They saw Astra as the region's best bet to evolve into a new Asian industrial juggernaut.