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Wednesday, Feb. 28, 2001

Effect of Nissan factory closure to linger

Demise of Murayama plant has residents concerned over area's fate


Staff writer

Kazuko Shimoda, 62, wasn't surprised when she heard in October 1999 that the Nissan Motor Co. plant across the street from her tobacco store in Musashi-Murayama, western Tokyo, was to close by the end of March.

The fate of the 128.4-hectare plot now host to Nissan Motor Co.'s factory in Musashi-Murayama, western Tokyo, remains undecided.

"For several years until then, I'd been hearing rumors that Nissan wasn't doing well and that the plant was gradually reducing the number of workers," said Shimoda, who has lived in the area for 38 years. "The people around here have recognized the state of the company for some time now."

And the feelings of Murayama residents are probably shared by other communities facing the closure of Nissan factories in other parts of the country.

Apart from the Murayama factory, two other Nissan-affiliated plants in Kyoto and Aichi prefectures will close March 31 under a drastic restructuring package initiated by company president Carlos Ghosn.

The Nissan Revival Plan, announced Oct. 18, 1999, will probably achieve its key goal of bringing the troubled automaker back into profitability in fiscal 2000, but the achievement will come at a cost.

The 2,300 people employed at the Murayama factory as of April 2000 will either relocate or leave, with 1,800 going to other Nissan factories and 200 leaving the firm. The other 300 will remain for three years but will either relocate or retire when a plating line inside the factory is closed in 2004.

While Murayama workers had little control over their fate, the company has at least tried to secure positions within the company for most workers and has provided assistance in finding new jobs for those who have chosen to leave.

Subcontractors who have long worked with the Murayama plant, however, have no access to the automaker's safety net.

Supporting industries typically spring up around auto factories to produce and supply various parts. These subcontractors in turn delegate work to other subcontractors. But the closure of the plant has been long expected and many of these supporting industries have already begun to decline.

"We used to carry lots of auto parts for Nissan cars . . . but most of that work began to fade out in October," according to the manager of a local transport company. "The only Nissan business that remains is the transport of floor mats for forklifts, and even that will go when the Murayama factory closes."

His company is now shifting its focus to Hino Motors Ltd., a truck maker based in Hino, western Tokyo. That, however, has not covered the loss of Nissan's business.

"Sometimes, along with auto parts, we even transport things that have nothing to do with cars now," he said. "Business has been hard and we must do what we can."

Local chambers of commerce and industry in six cities surrounding the Murayama plant examined the possible effect of the closure on their 1,658 member manufacturers by conducting a survey soon after the Revival Plan was announced.

Of the 508 firms that responded, 49 firms, or 9.6 percent, will be affected by the plant closure as they have business connections with Nissan.

Norio Nakamura, secretary general of Tachikawa Chamber of Commerce and Industry, said the expected impact as indicated by the survey is not as drastic as anticipated. He remains cautious, however, saying the low response rate makes the survey unreliable.

"The important thing is that some companies will be affected by the shutdown," he said, noting that even a small change can deal a serious blow to small- and midsize businesses, especially given the stagnating economy.

But Keiichi Sasaki, chief researcher at Tama Chuo Shinkin Bank, believes the closure will have a minimal effect. A survey by the bank shows that many major subcontractors will relocate their workforces to branches near Nissan's remaining plants, while smaller ones will gradually increase business with other automakers, such as Honda Motor Co. and Fuji Heavy Industries Ltd.

"The volume of business with Nissan's Murayama plant had been gradually decreasing for several years before the shutdown announcement," he said. "I think local industries are well prepared for the (closure)."

The small number of visitors at a public job replacement office covering Tachikawa and nearby cities, Hello Work Tachikawa, seems to support this.

A special counter was set up in April to help those working at the Nissan plant and its related businesses. But only about 50 people had visited the counter as of the end of December.

"Although we cannot be optimistic, we get the impression that Nissan's subcontractors in the area will not go out of business," said Shigeo Kubota of Hello Work Tachikawa.

Having said that, however, Kubota voiced concern over the possible impact on nonauto businesses.

Shigeaki Takahashi, secretary general of the Musashi-Murayama Chamber of Commerce and Industry, agrees, saying he has heard many complaints from local retailers and restaurateurs about declining business.

"Until about three to four years ago, hardly a day went by without my taking a customer to the Murayama plant from JR Tachikawa Station," a local taxi driver said. "But now I think I only take one person a month."

However, the driver also has some sentimental feelings toward the structure that has been a part of the community for so many years.

"It's a pity that Nissan is closing down Murayama," he said. "I've heard that their business wasn't going well, so I guess they couldn't help it. . . . But then I really want Nissan to come back to the market, you know. They used to be praised for their technology and engineering capabilities."

The fate of the 128.4-hectare lot is also of great concern to local residents and businesspeople.

"The success of our business will be determined by the fate of the site after the shutdown," said the owner of a nearby noodle restaurant, noting that her 32-year-old restaurant has already lost many customers.

"It's sad to see them leave because the plant has been like a landmark for this community," she added.

Ghosn said the firm will sell the Murayama property and is currently negotiating with many interested parties, but no decision has yet been made on the eventual buyer.

"Considering the size and the importance of the property, we will be very careful in handling it," he said in an interview.

Together with the Tokyo Metropolitan Government, the cities of Tachikawa and Musashi-Murayama have been urging the automaker to consider local opinions when selecting a buyer.

"It's not only about how to use the Murayama property. It has to do with how to restructure the entire area," said Masami Tosaka, an official of the Musashi-Murayama Municipal Government.

"Of course, it's up to Nissan to decide what to do with their property, but we hope they will understand their big influence on the community and listen to what the cities and local people have to say."



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The Japan Times

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