Mark, you forgot the famous Tunnel (and it was privately funded to the current dismay of the bond holders, I presume). But seriously, Japan has two major problems to address, stimulating final demand (to soak excess capacity and provide an outlet for the rim's excess products), and rationalize its banking system (whatever that euphemism means).
They have too many banks that have too little profits and that are under a heavy burden of non performing loans, thus resulting in a liquidity squeeze for many small and medium sized enterprises. Nisan is not exactly one of those "samll enterprises". Currently (unlike in the Chrysler and Lokheed situations, I believe), there is an extreme excess capacity in car making world wide (I read somewhere, but memory may fail me, that car capacity world wide is close to 80 million cars, where the demand can be in the 30 to 40 millions annually), supporting a weak producer under these circumstances will only increase that productive capacity and pose dangers to other manufacturers as profits are squeezed down due to excess capacity. This year, was the first in a long time that the sticker prices of cars actually declined.
Zeev |
