Disasters in Japan Expected to Hurt Businesses in L.A.

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As it has become clear that that it will take months for Japan’s economy to recover from the March 11 tsunami and earthquake, Los Angeles County businesses are bracing for a big impact of their own.

Tourism and trade-related companies especially are expected to face a loss of business.

Delta Airlines has halted flights between LAX and Tokyo International Airport until May or June, and Singapore Airlines has delayed the introduction of service on its new superjumbo Airbus 380s between Singapore and Los Angeles, via Tokyo. That means losses for hotels, restaurants and other shops that cater to tourists and business travelers.

More travelers from Japan visit Los Angeles than from any other overseas country, with the exception of Australia and the United Kingdom. That translates to about 300,000 Japanese tourists each year spending $270 million, according to Mark Liberman, chief executive of LA Inc., which runs the Los Angeles Convention Center.

“I can’t predict with exact precision, but the economic impact is going to be significant,” said Liberman. “Forecasters have compared this tsunami with the Kobe ’95 earthquake but that was a 7.2 and this was an 8.9, and this has radiation fears.”

Rolling brownouts in Japan, resulting from the disabled nuclear plants, also will be problematic. Japanese automakers have warned of parts shortages and, in some cases, have halted work at plants in Japan and the United States. Domestic parts suppliers also have been affected.

That is bound to affect the ports of Long Beach and Los Angeles, which handle a combined $45 billion worth of Japanese auto-related imports annually. Long Beach sees about 150,000 Toyotas and Los Angeles about 150,000 Nissans move through its facilities, respectively.

Overall, Japan is the second largest importer at the ports, second only to China in terms of container volume. Other Japanese goods going through the ports include computer parts and machinery, as well as foods for animals and humans.

There is, however, one silver lining expected from the tsunami. As Japan rebuilds it will turn to the United States for wood and other building materials – exports that likely should go through county ports.

“We’re in a wait-and-see mode,” said Philip Sanfield, spokesman for the Port of Los Angeles. “We may see an uptick in exports going out of the U.S.”

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