Lack Of Stable Power Brings Japan's Industry To Its Knees

Bertel Schmitt
by Bertel Schmitt

The Japanese tsunami impacts everything, from cars to toilet paper. Most Japanese car makers were closed since after the catastrophe and will remain closed at least until mid April. Many paper mills are in the affected area, and all paper, from glossy stock to the softer kind, is in short supply. Publishers of Japanese illustrated pulp fiction have canceled the printed version and direct their readers to the Internet instead. Tokyo corporations battle a wave of toilet rolls vanishing from their restrooms, from where they find a way to the toire at home. While these may be temporary outages, the lack of stable electrical power emerges more and more as the biggest impediment to the recovery of the Japanese industry. It will affect you and your car, in one way or the other.

Bloomberg figures that “the earthquake and tsunami destroyed 21 million kilowatts of electrical generating capacity, or about the amount that would be generated by 10 Hoover Dams.”

Last weekend’s Heard on the Street column in the Wall Street Journal puts it more succinctly:

“The region around Tokyo, which accounts for 40% of the nation’s economy, most of Japan Inc.’s head offices and a third of the population, can barely meet peak demand now. In the event of a hot summer, there may only be enough electricity to supply three-quarters of demand. Shortfalls could last months, or years.“

A handy graph, based on data supplied by troubled TEPCO, shows only four out of 17 nuclear reactors producing power. Two of the four are scheduled to be brought down for maintenance in August.

It could be a long time until the shut reactors come back up. “Four years after a 2007 quake, three of seven reactors in the Kashiwazaki Kariwa nuclear plant operated by Tokyo Electric Power Co. still aren’t generating power,” says the Journal.

In this odd twist of fate, electric power, hailed as the savior of the automotive industry, is bringing the industry to its knees. Stable power is essential for the making of many products, from castings to copper foil for printed circuit boards. There are a lot of those in a car, populated by many chips. Chips need stable power even more. Writes Hans Greimel in Plastic News:

“And because the worst-hit suppliers are in the electronics and chip-making sectors, getting them back up to speed is a big hurdle. Vehicle assembly lines are relatively easy to stop and restart, but chip-making equipment is far more sensitive and can get really messed up by an unscheduled shutdown.

After those lines stop it can take up to three days to recalibrate them. And the restart process must begin again from scratch if it is interrupted by a power outage or aftershock — both of which continue to plague Japan. Simply scheduling a sustained restart around the blackouts is hard.”

Also, now we know why the plans of voluntary shutdowns — say Toyota on Monday, Nissan on Tuesday, Wednesday is Honda day – were a non-starter, and why Japan’s majors vehemently denied such plans: This kind of industry coordination would be against the law.

Negotiated shutdowns “could be deemed as forming a cartel to adjust production volume, banned under the Anti-Monopoly Law,” writes The Nikkei [sub].

Even setting the thermostat of the office A/C to more moderate degrees could collide with labor laws or building maintenance regulations.

According to The Nikkei, the Japanese government will ask its industry watchdog, the Japan Fair Trade Commission, to lie down for a while. The government will also temporarily revise ordinances setting enforcement rules. With this in place, the industry can finally sit down and come to a sensible power-sharing arrangement.

Another step is to allow companies to set up their own power generation. Currently, “installing power generation equipment in open spaces on a company’s premises could breach land usage and air pollution laws,” says The Nikkei.

The Japanese government is expected to ease enforcement rules and to allow the installation of generators.

Speaking of generators: There aree none to be had in Japan.

Distributors were sold out three days after the quake. Now, genset makers are scrambling for – parts.

According to the Bloomberg report, “Honda has secured enough parts to partially resume production of large generators at a factory in Kumamoto, southwest Japan, though the company doesn’t know how long it may take to start making portable units.”

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments
Join the conversation
4 of 21 comments
  • Philosophil Philosophil on Apr 04, 2011

    I want to join the chorus and rightfully acknowledge the tremendous work that Bertel has been doing on this front. I learn more about the real, hard problems the people of Japan are facing on this site than I do anywhere else. Great work and please keep it up! This is precisely the kind of catastrophe that drives home just how much we take for granted in our highly developed, technological lifestyles. As a rule, most people only take notice of these kinds of issues when the highly complex conditions that enable our everyday, technological lifestyle actually breaks down. It's only when we lose electricity for a couple of days, for example (as experienced during the widespread blackout in North America from a couple of years ago), that we realize just how many things in our lives depend on the ready and widespread availability of electrical power. Just imagine what would happen in Canada or the U.S. if we were to lose electrical power at the scale with which it has affected Japan (both spatially and temporally). The character and demands of the immediate environment would change dramatically and people would be forced to adapt themselves to radically new and different lifestyle demands. This is not a trivial loss of power or infrastructure here, it is the loss, or at least the serious impairment of the conditions necessary for enabling and maintaining a general lifestyle, a general way of life. My mind still boggles when I think about it. I said at the beginning that this could very well be a nation-changing event, and it was precisely this kind of broad, long-term disruption of the complex, systematic conditions of everyday life that I had in mind. Unfortunately, even with Bertel's vivid and highly informative reports, the real impact of this at the ground level is probably still too abstract for most of us to fully appreciate (and I include myself in that as well).

    • Zackman Zackman on Apr 04, 2011
      "This is precisely the kind of catastrophe that drives home just how much we take for granted in our highly developed, technological lifestyles." I've been taken aback in recent years about how much electricity is simply wasted and used for no other reason than lighted street signs, the new billboards that are really giant TVs and excess lighting in, on and around buildings merely to make them look good at night. It seems people are led to believe that if something doesn't plug into a wall, it is somehow outdated and useless. This goes hand-in-hand with the complexity even of appliances and TV's and computers that require so much memory and speed and electricity to fulfill what used to take far less computing power to achieve. It feeds off itself and ever spirals upward. What goes up must always come down. Gravity always wins. Electric power is a wonderful thing that makes life easier and more convenient, but when so much is absolutely dependent on it and cannot operate without it, that makes me pause and plan accordingly if the lights went out.
  • Brandloyalty Brandloyalty on Apr 04, 2011

    You would think producing cars would be low on Japan's priority list right now. Though many were destroyed, I doubt there's a national shortage. Nor is there a global shortage. Cuba shows how long a country can go without new cars. Perhaps Japan could use the income from car exports, but Japan is sufficiently wealthy country that they should be able to do without that income for a while. Energy has been squandered in developed countries like a party that everyone thought should only get busier and louder. I'm sure Japan would have enough power if they concentrated on the top priorities. It needs to be approached as a situation as demanding as a war, and with people as willing to adapt their lifestyles accordingly.

  • AZFelix Hilux technical, preferably with a swivel mount.
  • ToolGuy This is the kind of thing you get when you give people faster internet.
  • ToolGuy North America is already the greatest country on the planet, and I have learned to be careful about what I wish for in terms of making changes. I mean, if Greenland wants to buy JDM vehicles, isn't that for the Danes to decide?
  • ToolGuy Once again my home did not catch on fire and my fire extinguisher(s) stayed in the closet, unused. I guess I threw my money away on fire extinguishers.(And by fire extinguishers I mean nuclear missiles.)
  • Carson D The UAW has succeeded in organizing a US VW plant before. There's a reason they don't teach history in the schools any longer. People wouldn't make the same mistakes.
Next