CALIFORNIA BUSINESS MINUTE
Japan & California
03-15-11
Hi, I am Tim Johnson and welcome to the California Business Minute.
Japan and California are significant trading partners. According to the
International Trade Administration, US Dept. of Commerce, Japan had been
the third largest export partner with the Golden State until last year.
Japan now ranks as the fourth largest export partner at $12.2 billion right
behind China with $12.4 billion in 2010. California is the largest state
in the nation with export activity with Japan. The state of Washington is
second with 50 percent of the activity followed by Texas, Louisiana and
New York. Major exports from California include computer and electronic
components, transportation equipment, food manufacturing and machinery,
except electrical.
While most of the major ports are located in the south of Japan, ports and
shippers across the globe have shown concerns. The Port of Los Angeles
said it temporarily suspended the transfer of hazardous materials and
bunkering fuel operations as a precaution, but that normal cargo operations
were not interrupted.
Meanwhile FedEx suspended all pickups and deliveries in East Japan. “The
health and well-being of our team members is our first concern, and we
are in the process of confirming their status,” the company said. “We are
continuing to accept shipments to Japan; however, there may be a delay in
delivery due to the situation.” UPS has resumed operations in Japan, but
some areas still have limited service. The company has temporarily suspended
service in Northern, Eastern and parts of Central Japan.
California Companies in Japan Impacted
Santa Clara based Intel has multiple facilities in Japan although it does no
production there. It suffered damage at its research center at Tsukuba. The
facility employs about 300, "It did enough damage Intel personnel was evacuated
and are now currently working from home.
San Francisco-based Wells Fargo said all its employees were accounted for and
safe, but its two locations in Tokyo sustained minor damage. The bank plans to
resume operations at these locations or at an alternative location.
Toyota, Honda, Mazda and Nissan have all halted production at some 22 assembly
plants to keep workers safe and because of the general impacts of the tragedy.
While a high preponderance of their vehicles for the US market are made in
the US, the lack of imports could cause a problem with available supplies of
vehicles here.
Economic Impact
Carl Weinberg, chief economist at High Frequency Economics, a research firm
based in New York, said the damage to the third largest economy in the world
that will have consequences greater than imagined. “There is no way to
accurately assess damage Japan’s economy and the global economy due to this
disaster. Shocks on the Japanese economy will have an impact on people and
any business, wherever they are – whether in Japan or New York,” Weinberg said.
Insurance analysts are estimating that the earthquake and resulting tsunami
might end up costing the global industry up to $35 billion.
Support from the Golden State
California Task Force 2, a specially trained group of urban search and rescuers
left for Japan. According to LA County Fire officials, the team received the
request for help from the United States Agency for International Development's
Office of Foreign Disaster Assistance. The group is leaving less than 24 hours
after their return from Christchurch, New Zealand, where they were helping in
search and rescue efforts after a major earthquake struck there. California Task
Force 2 is made up of more than 140 LA County firefighters, paramedics, emergency
room physicians, structural engineers and heavy equipment specialists. More than
70 will head to Japan, including a heavy rescue team and a swift water safety team.
Additionally Google, Twitter and other technology companies are finding ways to
help following last week's earthquake in Japan. Google Inc. has an online "person
finder" for people seeking information about a missing person. Twitter is trying
to help organize the flood of information flowing through its system. It is
suggesting people use certain tags for general earthquake information, requests
for rescue and other related topics.
I am Tim Johnson and this has been the California Business Minute.
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