I just spent a fast week in Tokyo and was surprised at how the recession has affected the Japanese economy, both good and bad.
The first indicator is the drive in from Narita Airport. This used to be a two-hour ordeal. But last week we were at the downtown hotel in less than an hour. There simply wasn't any traffic. And, in my informal survey, traffic and trucks are a real function of industrial activity.
Next, the taxi lines in front of the hotel were far longer than I've seen before. Back in the bubble economy, you'd see at most a half-dozen taxis waiting. Now, dozens of taxis stretch around the block.
On the up side, next to my hotel is a very pricey high-rise mall of expensive, high-luxury domestic and imported stores. As I wandered around, I saw plenty of buyers for these most expensive items. Even in a tough recession, the rich stay rich and the poor stay poor; only the middle class gets clobbered.
But let's not worry too much about the auto industry. Toyota remains as strong and healthy as ever, even with domestic volume down. It is doing a good job of maintaining its market share, and North America is handing it some outstanding profits.
Meanwhile, both Ford Motor Co. and General Motors have hired savvy ex-Honda executives to run their Japanese sales companies. Those executives know exactly what it's going to take to succeed in Japan. Both Japanese executives had a great track record at Honda, so it will be very interesting to see what happens now that GM and Ford have some really talented, local leaders. Each wants to change the product mix and distribution, which makes sense.
Nissan really is struggling. It makes no bones about looking for a partner, but that's easier said than done. And while most Japanese companies can look to America for profits, the United States continues to be a big drag on Nissan's financial resources. There are plenty of rumors swirling about the future of Nissan.
Jim Miller, CEO of Mazda, a longtime Ford executive, is continuing the steady progress begun there by Henry Wallace. Wallace and Miller are first-rate executives; they know what has to be done and are doing it in a quiet, efficient manner.
But while Japan struggles, the rest of Asia is floundering even worse. And it's hitting Japan right between the eyes. While the Japanese are looking at constant decreases in Japanese sales, Asia is in a free fall, with some markets dropping as much as 50 percent in a month.
The Japanese expect that it's going to be a year or two before their economy recovers. Meanwhile, getting to and from the airport will continue to be a breeze.