Factories from California to Michigan have been ordered to prepare for shutdown. As vital car parts that originate in Japan shrink in numbers new ones have yet to arrive from Japan. The Japanese tsunami killed thousands of civilians, triggered partial meltdowns at several nuclear reactors, and ravaged miles of Japan. [Please Help the Japanese People Recover, Donate Here Anytime] Factories have been crippled in the island nation and the ports have been frozen except for food and medical supplies. Car parts do not meet these strict requisites. New parts will not be shipping soon, which has led to a stagnation of the assembly lines.
This has led to many factories having reduced production, however until the now 25,000 workers that work at the 13 plants have not been laid off, although they may be in the near future. Furthermore, Toyota has promised to continue paying them regardless of the status of the plants and intends to employ them in community related activities, such as grass-roots marketing and social service.
Despite their token humanitarian efforts Toyota will be drastically set back by this tsunami. While Toyota has recently dominated the upper tiers of the car market this shut down could easily allow other car companies, such as Ford or Volkswagen, to take control of swathes of American consumers. The types of cars that everyone is driving will be slightly altered because of this tsunami, there will be many fewer Toyota’s and many more of everything else.
This directly relates to macroeconomics; the consumer price index of will be altered from consuming more Asian cars to more American and European cars. This may not seem like a large difference, but it will translate into millions, if not billions, of American dollars ending up in different hands. The contents of the average America’s financial basket will could change up to several hundred dollars. Some of those funds will be used to help rebuild the decaying American car companies. This may add thousands of jobs here in America, more if the European or Korean car companies set up new factories to replace the closed Toyota manufactures.
This illustrates just how interconnected the whole world is. An earthquake in Japan triggers a long and painful domino effect that has recently resulted in 25,000 American workers receiving vacation with pay, while maintaining the possibility that they might lose their jobs. Economically this is terrible in the short-term, but healthy for the American economy in the long-term. It harms the American economy to allow foreign companies to invade our shores and steal the profits, millions of irretrievable dollars are being sent overseas.
This dangerous trend is one of the key reasons why Americans have to work harder today to maintain the same standard of living than they did forty years ago. Back then they were chiefly working for American profits, which trickled back down into the community. Today that money continues to trickle down, in China, Japan, and India. This tsunami may have brought a small portion of America’s jobs back to America.