JAPANESE MORNING PRESS HIGHLIGHTS 2/19/09

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E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 2/19/09 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule (Nikkei) 4) Aso Cabinet support rate now at only 13 PERCENT in Kyodo poll (Tokyo Shimbun) Aso diplomacy: 5) Sakhalin-2 project set to start, with natural-gas output bound for Japan (Yomiuri) 6) Meeting with Russian President Medvedev, Prime Minister Aso achieves no progress on the Northern Territories entry issue, though talks to continue (Tokyo Shimbun) 7) Text of exchanges between Aso and Medvedev (Yomiuri) 8) Aso's weak political base hampering his diplomacy (Yomiuri) Politics and the budget: 9) Ruling camp hopeful the fiscal 2009 budget bill will pass the Lower House prior to Prime Minister Aso's U.S. trip for a Feb. 24 summit with President Obama (Nikkei) 10) Finance Minister Yosano at the Lower House Budget Committee worries whether the economy will be able to pull out of its deep slump (Nikkei) 11) Yosano will only hold two cabinet portfolios until the budget is passed (Nikkei) 12) Yosano will skip the ASEAN plus three meeting of finance ministers (Asahi) Politics in disarray: 13) At least 30 prefectural chapters of the LDP will go along with Aso at the helm in the upcoming Lower House election (Asahi) 14) But an increasing number of junior to mid-level LDP lawmakers do not want to go into the next election under Prime Minister Aso (Asahi) 15) Former Prime Minister Koizumi in angry statement says he will absent himself should there be a Lower House override vote on the cash-handout package (Yomiuri) 16) LDP's Koichi Kato, a former friend of Koizumi, urges party members to distance themselves from the former prime minister's rebellious stand (Asahi) 17) Four opposition parties decide to pursue Aso's responsibility for appointing Shoichi Nakagawa, who has just resigned his finance minister's seat in disgrace (Yomiuri) 18) Whether the U.S' Big 3 automakers restructure or collapse will have a major impact on Japanese parts makers (Mainichi) Articles: 1) TOP HEADLINES Asahi: Local LDP executives found reluctantly supporting Aso in survey Mainichi: Clinical training period for new doctors may be shortened to a year from two years Yomiuri: Compulsory curricula for doctor training to be halved TOKYO 00000374 002 OF 012 Nikkei: Housing plan could help up to 9 million households under U.S. measure Sankei: Spring labor-management wage negotiations start; Toyota management plans no pay-scale increase; Lowering wages a real possibility Tokyo Shimbun: Fixed asset taxes on 79 Kampo no Yado inns totaled 85.6 billion yen, seven times the book value Akahata: Prime minister held responsible for appointing Nakagawa, defending him, and Diet in turmoil 2) EDITORIALS Asahi: (1) Japan-Russia summit: Maximize the opportunity (2) Trial of Pol Pot's torture begins: A big step toward national reconciliation Mainichi: (1) Japan-Russia summit: What does "creative approach" mean? (2) Explanation necessary about why Yosano has to concurrently serve as finance minister Yomiuri: (1) Japan-Russia summit: Set the stage for advancing territorial talks (2) Will U.S. President offer additional support to automakers' rebuilding plans? Nikkei: (1) Big Three's rebuilding efforts still in turmoil (2) What is creative approach for Japan and Russia? Sankei: (1) Aso-Medvedev talks: Return of four islands must remain as national principle (2) Truth about Kampo no Yado inn bidding process must be uncovered Tokyo Shimbun: (1) Wage hike demand in recession carries significance (2) Koto Ward murder trial: Consideration must be given to feelings of victim's family Akahata: (1) Education Rebuilding Council report: Change necessary over structural reform 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, February 18 NIKKEI (Page 2) (Full) February 19, 2009 07:21 Left Haneda on ANA airplane. TOKYO 00000374 003 OF 012 Morning (local time) Arrived at Yuzhno-Sakhalinsk airport in Russia. Arrived at Pacific Plaza Hotel in Yuzhno-Sakhalinsk City. Held meeting with Russia President Medvedev at Sakhalin Oblast Government Hall. Afternoon Attended opening ceremony for Russia's liquefied natural gas production plant in Prigorodnoye. Inspected LNG carrier. Evening Departed Yuzhno-Sakhalinsk on ANA airplane. 18:20 Arrived at Haneda. 18:54 Singed in at Imperial Palace to report his return. 19:11 Met with Chief Cabinet Secretary Kawamura at his official resident. 4) Poll: Aso cabinet's support rate at 13 PERCENT TOKYO SHIMBUN (Page 1) (Abridged) February 19, 2009 The rate of public support for Prime Minister Taro Aso and his cabinet dropped 4.7 points from January to 13.4 PERCENT in a telephone-based spot nationwide public opinion survey conducted by Kyodo News on Feb. 17-18. The figure is the second lowest level, following the all-time low of 6.5 PERCENT for the Mori cabinet that stepped down in 2001. The nonsupport rate was 76.6 PERCENT , jumping 5.7 points in only 10 days from the last poll. The support rate has fallen at an accelerated pace, and the Aso cabinet appears to be in its last stage. In the survey, respondents were asked when they would like the House of Representatives to be dissolved for a general election. To this question, the answer "right away" accounted for 32.0 PERCENT , and "around April after the budget for fiscal 2009 clears the Diet" was at 38.8 PERCENT . As seen from these figures, a total of 70.8 PERCENT want the Diet dissolved by April, up from 62.3 PERCENT in the last poll. Asked about the desirable form of government, 53.4 PERCENT chose a coalition government centering on the leading opposition Democratic Party of Japan (Minshuto),with 28.1 PERCENT picking a coalition government centering on the ruling Liberal Democratic Party. In the public preference of political parties for proportional representation in the next election for the House of Representatives, the DPJ scored 40.2 PERCENT , followed by the LDP at 23.9 PERCENT . In the breakdown of public support for political parties as well, the DPJ stood at 33.6 PERCENT , with the LDP at 27.2 PERCENT . TOKYO 00000374 004 OF 012 Respondents were further asked to choose between Prime Minister Aso and DPJ President Ichiro Ozawa as more appropriate for prime minister. In this public choice, Ozawa marked 46.4 PERCENT , with Aso at 20.4 PERCENT . Ozawa outdistanced Aso with the widest gap under the Aso government. In the breakdown of public support for other political parties, the New Komeito was at 3.5 PERCENT , the Japanese Communist Party at 2.8 PERCENT , the Social Democratic Party at 3.0 PERCENT , the Reform Club at 0.1 PERCENT , and "none" at 25.7 PERCENT . The New Party Nippon gained no support from respondents. 5) Russian Sakhalin-2 plant starts operation for Japan-bound LNG YOMIURI (Page 1) (Full) February 19, 2009 Yuzhno-Sakhalinsk, Daisuke Segawa With the start of operations of the Sakhalin-2 oil and natural gas exploration project off Sakhalin in the Russian Far East on February 18, Russia's first ever liquefied natural gas (LNG) production has moved into full swing. Approximately 5 million tons, 50 PERCENT of the annual output of 9.6 million tons, are bound for Japanese power and gas companies, such as TEPCO. The Sakhalin-2 project will serve as a new supply source of LNG, demand for which is expected to grow. Exports to Japan will likely start in March. Prime Minister Aso and Russian President Medvedev attended a ceremony to start the operation held the same day in Prigorodnoye in southern Sakhalin. Aso stated, "It was Japan's long-cherished dream (to procure energy from a neighboring country)." Medvedev also underscored his view that the nation's LNG production will contribute to global-scale energy security. 6) Japan-Russia summit TOKYO SHIMBUN (Page 1) (Slightly abridged) February 19, 2009 (Kei Sato, Yuzhno-Sakhalinsk) Prime Minister urged Russian President Dmitry Medvedev in their meeting on Feb. 18 to resolve the issue in which Japan canceled humanitarian aid as Russia has demanded that Japanese government officials on a humanitarian mission submit disembarkation cards before landing on one of the four northern islands. But he failed to solicit more than an agreement to continue working-level negotiations. Aso brought up this issue, with this remark: "This project is important from the viewpoint of fostering mutual trust. I want to confirm both countries' willingness to continue this project." Medvedev just replied: "I appreciate Japan's humanitarian assistance. I will instruct our officials to try to resolve the issue in a friendly and constructive manner." Japan is aiming to settle the issue by May, when a visa-free exchange visit program will be launched between Japanese citizens and current Russian residents of the Northern Territories. If negotiations are prolonged, however, territorial negotiations will be inevitably affected. TOKYO 00000374 005 OF 012 In their meeting, both leaders agreed to speed up negotiations on the territorial dispute "with a new, creative and flexible approach during our generation." Medvedev proposed "a creative approach." The two leaders agreed to realize a visit to Japan by Prime Minister Vladimir Putin. They also decided to push ahead with coordination for them to hold bilateral meetings at the second financial summit in London on April 2 and at Group of Eight (G-8) Summit in Italy in July. 7) Gist of Japan-Russia summit YOMIURI (Page 4) (Full) February 19, 2009 (Northern Territories issue) Prime Minister Aso: We should aim at reaching a final conclusion with a new, creative and flexible approach, based on our past agreements and documents. President Medvedev: We must continue efforts to reach an agreement acceptable to both sides. Both leaders: We will instruct our working-level officials to speed up practical work so that we can resolve the dispute during our generation. (E/D card issue) Aso: The (humanitarian aid) project is important for the two countries to build their mutual confidence. I would like to confirm that the project will be continued. Medvedev: I appreciate Japan's aid. I am determined to resolve the issue in a friendly and constructive manner. Both leaders: We will order our working-level officials to accelerate practical work. (Global economy) Aso: I am concerned about a rise of protectionism, against the backdrop of the ongoing global economic recession. I am apprehensive about the Russian government's plan to raise tariffs. Medvedev: We will make efforts in accordance with the agreement reached in the financial summit, but there will be exceptions. (Bilateral relations) Both leaders: Both countries will carry out coordination to set bilateral meetings on the sidelines of the financial summit in April and the Group of Eight (G-8) Summit in July, with the aim of reaching an agreement during Prime Minister Putin's visit to Japan in May. (Far East Siberia development) Both leaders: The two countries will discuss new possible joint projects in the natural gas field. TOKYO 00000374 006 OF 012 (Japan-Russia nuclear power cooperation accord) Both leaders: We welcome progress in negotiations and will accelerate them. 8) Aso's weak political base might negatively affect Japan's position on diplomatic front YOMIURI (Page 4) (Full) February 19, 2009 The key to the survivability of Prime Minister Aso may lie in whether he will be able to display his presence on the diplomatic front. Major events are on his schedule, including a summit meeting with U.S. President Obama, but some observers predict that as the Aso administration become politically weaker, its diplomacy, too, is likely to become weaker. Speaking before reporters after he held talks with Russian President Dmitry Medvedev on Feb. 18, Aso expressed his resolve to make efforts to resolve the Northern Territories issue. "It is undesirable to leave the issue completely up to bureaucrats," he said. Following his meeting with visiting U.S. Secretary of State Hillary Clinton on the night of the 17th, a number of important diplomatic events are on Aso's schedule, including a meeting with U.S. President Barack Obama on Feb. 24, a financial summit, a visit to Japan by Russian Prime Minister Vladimir Putin, and a Group of Eight (G-8) summit. An aide to the prime minister said: "I hope he will be able to turn the tables through these events." Clinton's Japan visit was a good opportunity for Aso to give a boost to his administration. His meeting with Obama set for the 24th will make Aso the first foreign leader to be invited by President Obama to the White House. However, this has been sullied already by Finance Minister Nakagawa's resignation for his awkward behavior during a press conference after the Group of Seven finance ministers and central bank governors' meeting. Chief Cabinet Secretary Kawamura had to say in a press briefing yesterday: "It was regrettable from the viewpoint of our national interests." In the upcoming diplomatic events, economic issues will surely take center stage. Some persons take the view that the change of an economic minister at this juncture is not a good message. Further, former Prime Minister Koizumi, who is currently visiting Russia, told reporters in Moscow on the 18th: "In diplomacy, it is very important for a nation to keep its political base stable. The political turmoil in Japan must be quelled as soon as possible." He thus expressed his concern that Prime Minister Aso might be treated lightly at diplomatic venues. As suggested by Koizumi, the Aso administration has already met disappointing views from overseas. A correspondent who accompanied Secretary Clinton on her visit to Japan asked a senior official of the U.S. State Department: "Why has the Obama administration invited Aso? His administration has been TOKYO 00000374 007 OF 012 suffering low public support rates and is unlikely to last much longer." The senior official replied: "The president has invited him not personally but as the Japanese prime minister. It is not related to his popularity." But the Washington Post also reported that Clinton's meeting with Democratic Party of Japan President Ozawa reflected Washington's intention to diversify its risks. 9) Focus to be on whether Lower House committee can take vote on fiscal 2009 budget before Aso visits Washington NIKKEI (Page 2) (Full) February 19, 2009 Whether the House of Representatives Budget Committee will be able to take a vote on the fiscal 2009 budget before Feb. 24, when Prime Minister Taro Aso meets in Washington with President Barack Obama, has emerged as a new issue in maneuvering between the ruling and opposition parties. The Budget Committee decided yesterday on such schedules as holding on Feb. 19-20 a sub-committee session and intensive deliberations on the Aso cabinet policy line, as well as on social security policy. Aso will today apologize for the resignation of Finance Minister Shoichi Nakagawa. The ruling parties tried to pass the budget on the 20th in the Lower House, but they had to change their original plan due to Nakagawa's resignation. The ruling Liberal Democratic Party (LDP) and New Komeito, the LDP's junior coalition partner, confirmed yesterday in a meeting of senior party members that they would make efforts for an early passage of the budget. The two parties also decided that instead of forging a vote before the end of the week, they would put the budget to a vote on the morning of the 23rd and have it passed by the Lower House in the afternoon,. A senior LDP member underscored: "It will be difficult to take a vote on the 20th, but we will get the budget (through the Lower House) on the 23rd." A senior New Komeito member added: "I hope the budget will be adopted (in the Lower House) by the night of the 23rd at the latest." As for the reason the ruling coalition is dwelling on passing the fiscal 2009 budget before Aso departs for Washington, a senior ruling coalition member close to the prime minister pointed out: "Under the current economic situation, it is not appropriate for the prime minister to meet with the President with empty hands." It is certain that if Aso holds a summit meeting before the budget is passed, his administration would suffer another blow. Such could result in exposing Aso's lack of leadership in Japan to the Obama administration. After the passage of the budget, the government and ruling coalition are looking into compiling additional economic stimulus measures. In order to improve the atmosphere conducive to accepting an additional economic stimulus package, Aso wants to pass the budget in the Lower House before he leaves for the United States. However, if the ruling camp rams the budget through the Lower House, chaos will reign in the Diet. The ruling coalition leaders intend to make a final decision on the timing of vote-taking after carefully watching what action the opposition bloc will take and public opinion. TOKYO 00000374 008 OF 012 The opposition camp is expected to try to prevent the bill from clearing the Lower House before Aso visits the United States. There is a hard-line argument in the opposition that if the ruling camp takes a vote on the 23rd, the opposition will prevent it even by such means as submitting resolutions to dismiss relevant chairmen. 10) Finance Minister Yosano concerned that economy will not come up from bottom NIKKEI (Page 2) (Full) February 19, 2009 When asked in a Lower House Budget committee session yesterday about the gross domestic product (GDP) plummeting at annualized pace of 12.7 percent in the October-December period, Kaoru Yosano, finance minister, state minister for financial services and for economic and fiscal policy, expressed strong concern, saying: "If this situation continues further, the Japanese economy not be able to come up from the bottom (soko-nuki)." Four opposition parties, including the Democratic Party of Japan, did not attend the session, demanding that Prime Minister Taro Aso show up in the session to explain his view for his responsibility of appointing Shoichi Nakagawa as finance minister. Yosano stressed in the session: "I will do my best to bring about economic recovery. In order to protect the livelihoods of the people by implementing necessary measures, an early enactment of the budget is important more than anything." He indicated that he would give top priority to an early passage of the fiscal 2009 budget and related bills. He also said that the basic direction toward sound public finance, as well as efforts for boost the economy should be maintained. Aso was replying to questions by Takashi Mitsubayashi, a member of the ruling Liberal Democratic Party (LDP). Chief Cabinet Secretary Takeo Kawamura apologized for the resignation of Finance Minister Shoichi Nakagawa, saying: "It is very regrettable that the minister in charge was replaced while the Diet is deliberating the budget." 11) Chief cabinet secretary: Yosano will concurrently serve in three cabinet posts until budget clears Diet NIKKEI (Page 2) (Full) February 19, 2009 At a press conference yesterday afternoon, Chief Cabinet Secretary Takeo Kawamura indicated that Prime Minister Taro Aso will let Kaoru Yosano serve in three cabinet posts -- finance minister, state minister for financial services, and state minister for economic and fiscal policy -- until the fiscal 2009 budget and related bills are enacted. He stated: "I understand that he will serve in the three posts for the time being." At a press conference yesterday morning, he stated that Yosano would serve in those posts until the budget and related bills cleared the Lower House. 12) ASEAN plus 3: Yosano to stay away; Government to consider relieving him of burden of serving in two posts TOKYO 00000374 009 OF 012 ASAHI (Page 4) (Abridged slightly) February 19, 2009 State Minister for Fiscal, Financial and Economic Policy Yosano has decided to absent himself from a foreign ministerial meeting of the Association of Southeast Asian Nations, Japan, China and South Korea (ASEAN plus 3) to be held in Phuket, Thailand on February 22. The reason is because he will be occupied with Diet deliberations, according to the Finance Ministry. International conferences and Diet deliberations are expected to continue. It appears difficult for Yosano to serve in the three ministerial posts concurrently. For this reason, Chief Cabinet Secretary Kawamura during a press conference on the 18th indicated the idea of relieving Yosano of the burden of serving in three posts and appointing his successor. The most likely plan is that Yosano will serve as finance minister and state minister for financial services with his present post as state minister for economic and fiscal policy succeeded by somebody else. Participating countries will report the situation of their efforts to address the global financial crisis at the upcoming ASEAN plus 3. They will also confer on how to stem the impact of the crisis on the region. Finance Ministry Parliamentary Secretary Suematsu (Upper House member) will attend the meeting on behalf of Yosano. Yosano during a press briefing on the 17th said, "I must attend various international conferences as long as that will not disrupt the management of the Diet." Since the ASEAN plus 3 will take place soon after former Finance Minister Nakagawa committed a blunder during a press conference after a meeting of the Group of Seven finance ministers and central bank governors (G-7),the Japanese finance minister's words and action at an international conference is bound to draw attention of foreign countries. It is necessary for Japan to restore the lost confidence. However, it has already missed the chance. 13) LDP's local chapters reluctantly support Aso ASAHI (Top play) (Abridged) February 19, 2009 The Asahi Shimbun interviewed the ruling Liberal Democratic Party's local chapter executives in the nation's 47 prefectures, including Tokyo and Hokkaido, and asked them if they thought the LDP should fight in the next general election under Prime Minister Aso or otherwise under a new president and prime minister. In response to this question, 30 LDP prefectural federations, or about two thirds, preferred "Prime Minister Aso" in their answers. However, their support for Aso was reluctant. "It's the same whoever may become prime minister," said one local LDP leader in Tochigi Prefecture. The LDP's local organizations, which elected Aso in the party's presidential race with their overwhelming support for him, seem to be at a dead end because they cannot dump him even though they may want to. Shoichi Nakagawa, a 'sworn' friend of Aso, has now quit as finance minister. His resignation is spurring LDP lawmakers to distance themselves from Aso. Given such a situation, the Asahi Shimbun interviewed the LDP's prefectural federation secretaries general in principle. TOKYO 00000374 010 OF 012 As a reason for preferring Aso, there was also a positive view in Tottori Prefecture, saying, "He is turning his eyes to localities as well, and he will prove his worth from now." However, other local leaders voiced reluctant views like "it's the same even if he's replaced now" (Kumamoto Prefecture) and "there's no other appropriate person to represent the party" (Nagano Prefecture). Aso is the third politician to have become prime minister without a general election. For this reason, there was also a view in Hiroshima Prefecture, saying, "If we have a fourth one, the image will go from bad to worse." 14) Junior and mid-level LDP lawmakers: "We can't fight in the next election under Prime Minister Aso" ASAHI (Page 4) (Full) February 19, 2009 Approximately ten junior and mid-level lawmakers from the ruling Liberal Democratic Party (LDP) who are critical of Prime Minister Aso held a meeting yesterday in Tokyo. One by one, the attending lawmakers expressed the view that they could not fight in the next election under Prime Minister Aso. According to one attendee, although all agreed to back the prime minister until the fiscal 2009 budget is passed, many expressed the view that they did want him to be at the head of the party going into the next election, given his extraordinary lack of leadership. One participant told the press corps, "In the current wretched state, even if we give it our utmost effort, we feel it would all be useless." Another lawmaker said, "We probably have no choice but to move to back another person for prime minister." 15) If second vote is to be taken on cash handout plan, Koizumi will absent himself from plenary session YOMIURI (Page 2) (Full) February 19, 2009 Ken Makino, Moscow Former Prime Minister Junichiro Koizumi, who is visiting Russia, held a press conference in Moscow on Feb. 18. In it, touching on the option of the House of Representatives taking a second vote on bills related to the fiscal 2008 second supplementary budget, including a cash handout program, Koizumi said: "If the ruling bloc is to use a two-third majority in a plenary session, I will not attend it." Although Koizumi had shown a cautious stance about readopting the related bills, this is the first time that he has made it clear that he would absent himself from the session. Koizumi also said: "Prime Minister (Aso) and the party leadership do not understand well how the ruling parties won the seats they have today. Discussions should be carried out on whether there are other ways to spend 2 trillion yen of tax money and on differing views between the House of Representatives and the House of Councillors." The comment is designed to discourage (Prime Minister Aso) from easily using the two-thirds majority the ruling bloc won in the 2005 Lower House election when Koizumi was serving as prime minister. Koizumi also indicated that he will not withdraw his plan to resign from politics. TOKYO 00000374 011 OF 012 16) Former friend Koichi Kato urges LDP members to distance themselves from former Prime Minister Koizumi ASAHI (Page 4) (Excerpt) February 19, 2009 Liberal Democratic Party (LDP) lawmaker Koichi Kato, a former party secretary general, in a recorded interview yesterday for Asahi NewsStar, commented on former Secretary General Hidenao Nakagawa having distanced himself from Prime Minister Aso: "He must not opt for a neo-liberal economy by always teaming together with former Prime Minister Koizumi." He criticized Koizumi and as a senior lawmaker who had ended his friendship with him, advised others to distance themselves from Koizumi. 17) Nakagawa resignation: Four opposition parties to pursue prime minister's responsibility for appointing him as cabinet minister; DPJ to demand resignation en masse YOMIURI (Page 2) (Full) February 19, 2009 In the wake of resignation of Shoichi Nakagawa as finance minister and financial services minister, the Diet affairs committee chiefs of four opposition parties -- the Democratic Party of Japan, Japanese Communist Party, Social Democratic Party, and the People's New Party -- met yesterday and agreed to intensely pursue Prime Minister Taro Aso's responsibility for appointing Nakagawa as a cabinet minister. The House of Representatives Budget Committee decided at its directors meeting yesterday to thoroughly discuss the matter on Feb. ¶19. The DPJ plans to demand that the cabinet resign en masse by letting Deputy President Naoto Kan take the floor as the questioner. DPJ President Ichiro Ozawa held a press conference in Toyama City yesterday in which he said: "(Taro Aso) is no longer functioning as prime minister." Chief Cabinet Secretary Takeo Kawamura again apologized before the Lower House Budget Committee yesterday afternoon, saying: "We are deeply sorry for the changeover of the finance minister amid deliberations on bills related to the fiscal 2008 second supplementary budget and the fiscal 2009 budget." 18) Will Big Three undergo restructuring or go under? Collapse of even one company will deal a blow to Japan's parts manufacturers YOMIURI (Page 3) (Excerpts) February 29, 2009 General Motors and Chrysler on February 17 (early hours of the 18th, Japan time) submitted management reconstruction plans to the government. The management of both companies has further deteriorated due to the sluggish brand-new car market. The two companies made a request for fresh loans only two months after bridging loans by the U.S. government started. However, it is not known whether the two companies can be resuscitated, even if additional financial assistance is extended. President Obama will likely be pressed to make a difficult decision. If GM and Chrysler proceed with production cuts and plant closures, TOKYO 00000374 012 OF 012 according to their management reconstruction plans, it will also deal a heavy blow to Japanese parts manufacturers operating in North America. Provided that even one company among the Big Three goes bankrupt, Japanese parts manufacturers' business performances would worsen. It will also have an adverse impact on Japanese automakers with the procurement of parts from manufacturers under the umbrella of the Big Three becoming stagnant, because they have increased the ratio of locally procured parts. There is also concern that it would lead to an increase in joblessness and a chain of bankruptcies of subcontractor parts manufacturers. According to the Japan Auto Parts Industries Association, approximately 300 Japanese auto parts manufacturers are operating in the U.S. Those companies' sales in North America stood at 3.4815 trillion yen in fiscal 2007. Of that amount, the proportion of sales to the Big Three stood at between 12 PERCENT -13 PERCENT on average. Such a ratio of some companies is reportedly even close to 50 PERCENT . GM and Chrysler accounted for about 6 PERCENT or 230 billion yen in the sales of Denso, the largest auto parts manufacturer. The company mainly sold them car air-conditioners and engine-related parts. Denso's sales to the two companies suffered a year-on-year drop of 30 PERCENT in the April-December period in 2008. A further decline is estimated for the January-March quarter in fiscal 2009. Many Japanese car makers, such as Honda Motors, which relies on the North American market for 50 PERCENT of its sales on a consolidated basis, Toyota Motors -- between 30 PERCENT -40 PERCENT , and Nissan Motors, have boosted their business performances as the U.S. market expands. All the more for that reason, they are strongly concerned that the management crisis facing the Big Three could protract their sluggish sales performances. An executive of Toyota Motors noted, "(If even one of the Big Three goes under,) it will deal a blow not only to the auto industry but also to all industries, such as electronics and raw material manufacturers." He stressed that the restructuring of the Big Three is indispensable for the recovery of both domestic and foreign economies. ZUMWALT