Watch CBSN Live

Japanese Anxious Over U.S. Auto Woes

Japanese automakers reacted with anxiety to news that ailing U.S. automakers General Motors and Chrysler had failed to submit acceptable plans to receive more government money, increasing the odds they may have to file for bankruptcy protection. The news also weighed on Asian stock markets.

"A healthy U.S. auto industry is in the best interests of everyone," said Alan Buddendeck, corporate vice president of global communications at Nissan Motor Co., Japan's third-biggest carmaker. He declined comment specifically on GM's woes, but expressed hopes for a recovery.

Nissan, Toyota and other Japanese automakers have repeatedly said the collapse of any major U.S. car maker would hurt them in their critical North American business because they share the same parts suppliers such as Delphi Corp., Bosch Auto Parts and TRW Automotive.

In recent years, the Japanese have expanded in the U.S., making one of the world's biggest auto markets a cornerstone of their growth strategy. By growing more American, they have become such a part of the U.S. industrial landscape that the collapse of any of Detroit's Big Three would be a blow to the Japanese manufacturers.

A major failure would also likely to crimp consumer spending in an already hobbling auto market as millions of people could possibly lose their jobs and overall consumers will almost certainly become pessimistic about the future. That would further batter the already plunging U.S. sales for the Japanese automakers.

Last week, Toyota Motor Corp. President Katsuaki Watanabe told reporters he was worried that General Motors Corp. may be forced to declare bankruptcy and expressed hopes for a bailout to keep it going.

"I think it will be best if General Motors is able to continue its operations," he said.

Toyota spokesman Hideaki Homma said sentiments remained the same in the final hours before the White House makes an announcement at 11 a.m. Monday, which prove a harsh one for the ailing automakers.

In China, where General Motors has become one of the market leaders, GM officials said that for now it was business as usual.

"Our investments and our developments in China have no change," said Sophia Luan, director of public affairs and communication for GM's office in Shanghai.

President Barack Obama and his top advisers determined that neither company is viable and that taxpayers will not spend untold billions more to keep the pair of automakers open forever. In a last-ditch effort, the administration gave each company a brief deadline to try one last time to convince Washington it is worth saving, said senior administration officials who spoke on the condition of anonymity to more bluntly discuss the decision.

Asian stock markets tumbled Monday as woes at American auto giants renewed concerns about the outlook for the U.S. economy, a major export market.

In Tokyo trade, Toyota's stock fell 3.7 percent, Honda Motor Co. shed 6.7 percent, and Nissan Motor Co. dived 7.7 percent.

U.S. administration officials said Chrysler cannot function as an independent company under its current plan. They have given Chrysler a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA, and will offer up to $6 billion to the companies if they can negotiate a deal before time runs out.

If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leaving Chrysler destined for a complete sell-off. No other money is available.

For GM, the administration offered 60 days of operating money to restructure. A frantic top-to-bottom effort began Sunday after CEO Rick Wagoner resigned under pressure from the White House. Fritz Henderson, GM's president and chief operating officer, became the new CEO.

Watanabe said last week that Toyota's California joint venture plant with GM, New United Motor Manufacturing Inc., or NUMMI, remains important for Toyota and would continue. But he was pessimistic about prospects for any quick recovery in global auto sales.

"There surely has to be light at the end of the tunnel," Watanabe said. "I want the decline to stop, and I'm watching closely for it every month, but it's not coming."

View CBS News In