For Toyota, Honda, and Hyundai, a sinking of GM, Ford, or Chrysler would create more problems than opportunities

By Ian Rowley and Moon Ihlwan

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Considering the closely states of more of the Republican Senators opposed to a $25 billion bailout of Detroit, a cynic might concede that they are doing Asian automakers’ work for them. After all, Republicans who have criticized the planned aid bundle for (GM), Ford (F) and Chrysler include those from states where Japanese and Korean automakers have factories. For instance, Republican Senators Richard Shelby and Jeff Sessions represent Alabama, home to Honda (HMC), Toyota ™, and Hyundai plants. John Cornyn represents Texas, which has a 200,000-capacity Toyota Tundra plant in San Antonio. And Bob Corker, who is "self-same skeptical" of the package, is a GOP Senator from Tennessee, which has two Nissan (NSANY) plants—in Smyrna and Dechard—and the company’sitting U.S. headquarters in Nashville.

Yet the senators opposing a bailout bill also may be under the necessity existence in disagreement with those same Japanese and Korean automakers. For Asia’s leading automakers, the prospect of single or all of the Big Three failing is arguably of greater concern than rivals receiving government aid. Indeed, since executives worry the collapse of GM, Ford, or Chrysler would have a negative impact steady car sales, hurt the financial health of suppliers, and trigger a possible backlash against intention brands, the problems of Detroit are problems for exotic rivals, too.

While a bankruptcy filing would likely boost Asian sales and shares eventually, in the contracted term it could make matters worse for Toyota, Hyundai, and the others. One problem, notes Andrew Phillips, an analyst at KBC Securities in Tokyo, is that one or more U.S. carmakers entering into Chapter 11 would do little to cut excess dimensions and probably worsen consumer belief. "It’s in the Japanese and Korean carmakers’ interest for the U.S. economy to stabilize and, if bailing outright the Big Three means that, they are not going to have existence opposed to it," he says.

With not one bailout plan yet agreed upon, Japanese and Korean automakers are mostly avoiding commenting adhering that which the U.S. authorities should be doing. For one thing, it might look as if they’re crowing whereas rivals are in indigence of emergency surgery. Those who have parole have offered fit support for U.S. government aid for their struggling rivals. Among them, Nissan Chief Executive Officer Carlos Ghosn and Honda CEO Takeo Fukui have indicated that they back bailouts in groundwork. Fukui, for instance, said on Nov. 6 that he isn’t opposed to the U.S. government helping automakers as long as fair competition is maintained. The Honda boss, who would also like to see the Japanese sway intervene to enfeeble the soaring yen, added that it’sitting only natural in quest of a government to support the same of its country’s key industries.