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Japanese companies in the United States face myriad challenges as the coronavirus outbreak forces an abrupt shift to remote work, throwing a wrench into operations heavy on manufacturing and deeply reliant on in-person communication.
Nearly 70 percent of Japanese subsidiaries here have seen their sales slip, while 90 percent have at least some staff working from home, according to a survey released by the Japan External Trade Organization, which has one of its six U.S. offices in Atlanta.
Some 85 percent have faced challenges with the transition to off-site work, from slow and insecure Internet connections to difficulties shipping cargo, processing payments, closng sales or monitoring employee productivity. Three-quarters of respondents said these challenges were “manageable,” while only 10 percent saw them as severe.
The JETRO survey covered more than 900 companies, 289 of them in the South, from March 24-26, just as many cities and states were implementing closures of offices, restaurants and bars.
Health leaders have said these “social distancing” measures are needed to slow the already rapid spread of Covid-19, the respiratory disease caused by the virus.
But the patchwork of advisories across various cities, states and even counties has sown confusion for companies unclear on whether their products were considered “essential” or if they should send workers home.
Learning Zoom Overnight
Marietta-based YKK Corp. of America has had a clear mandate to stay open, with the federal government declaring the zipper and fastener manufacturer part of the nation’s “essential critical infrastructure” for fighting the pandemic.
YKK USA Inc. in Macon is churning out zippers for hazmat suits and fasteners for apparel customers that have retooled to make medical masks, hospital gowns and beds. Its plant in Anaheim, Calif., is providing airtight zippers for use in portable isolation wards.
Tape Craft, a YKK subsidiary with a plant in Oxford, Ala., tweaked its machinery to make 85,000 units of elastic used to strap on face shields its client Ford Motor Co. had begun making for frontline medical workers.
When supply issues hindered Tape Craft’s ability to meet the rest of the Ford order, YKK’s makeshift communications plan was put to the test.
“Face-to-face communication was part of our culture,“ Jessica Cork, vice president for community engagement and corporate communications at YKK Corp. of America, said on an April 2 crisis-management webinar organized by the Japan-America Society of Georgia. “We, like a lot of companies, discovered Zoom overnight.”
The company quickly instituted quick daily check-ins and thrice-weekly meetings among executives and department heads over the video-conferencing app.
That consistent collaboration across all areas of the business, in turn, fixed the Ford shortage: It turned out that a hook-and-loop strap made in Macon could be connected with a plastic buckle to fasten on the face shields.
“What’s great is that you could really feel the team work from many people throughout the project,” Ms. Cork said, noting that having both an emergency preparedness plan and a clear communications strategy — internally and externally — has been essential during this time of upheaval.
[pullquote]”We, like a lot of companies, discovered Zoom overnight.”[/pullquote]
“Make sure that you’re keeping your lines of communication open,” she said. “When suddenly everything moves remote, it’s really not enough to continue just to email people.”
TOTO USA has instituted similar daily calls to build morale and get departments on the same page, President of Operations and Ecommerce Bill Strang said on the JASG call.
“It’s not a big, long hour-and-a-half presentation with lots of Power Point slides. It’s just a gut check to see where everybody is,” he said.
On the business side, TOTO’s adaptation to the new Covid-19 reality has been less straightforward than YKK’s. Its ceramic toilet plant in Morrow, Ga., is shut down through April 13, but its distribution centers are busy as ever. Meanwhile, TOTO technicians continue to back up plumbers maintaining TOTO products.
For support staff interfacing directly with home-bound customers over the phone, TOTO has placed a newfound emphasis on empathy. It has paid off, especially with elderly customers, who often want to talk about more than their technical issue as they endure a time of isolation.
“It’s amazing to see the feedback that I get daily from our tech services guys about the conversations they’re having,” Mr. Strang said. The calls are longer, but it’s worth the time for TOTO to be remembered as the friendly voice on the other end of the line, he said.
TOTO is also focusing on the little things in its own operations, like a group of remote workers surprising one employee with a Zoom rendition of “Happy Birthday” once she logged on.
“Through community comes strength, and if we continue to build our community, our businesses and society will have strength,” Mr. Strang said.
A sense of angst
Still, while the Japanese business community is by no means news to the U.S., some survey respondents around the nation seemed to be developing a sense of angst as they face an unprecedented threat.
At least one voiced concerns about the seeming increase in discrimination against Asian-Americans, rising gun sales and difficulty buying food and masks. One noted that visa renewals had been halted, threatening access to key workers. A food manufacturer is foreseeing a shortage of masks his workers need on the production line.
Others sought more information in Japanese, especially on the issue of whether a company could remain open.
“Although I understand there is no formal approval stating which businesses are ‘essential,’ it is difficult to communicate well with the headquarters about this issue, because there is a large gap between the reality here and what media reports in Japan,” the comment read.
Many also questioned whether funds and loans doled out through the $2 trillion CARES Act stimulus package passed in March would be available to Japanese subsidiaries.
Relatively early into the lockdowns, manufacturing output is already suffering, with more than half of plants operating at less than normal levels. Some 28.5 percent have completely suspended production temporarily — including major employers like Kubota, Yamaha and Toyo Tire in Georgia.
Closures at auto plants, meanwhile, could have major ripple effects on downstream suppliers, compounding to the woes that many companies have already faced in Asia. One respondent said that a surge in new Covid-19 cases in Mexico, where many auto makers are present, could further complicate operations in the U.S.
Both YKK and TOTO have a global supply chain that presents both challenges and a bit of a safety valve. Disasters, execs said, are usually focused on one area; this one is slow moving and hitting the world all at once. Having a global supply chain ups damaging exposure, but it also increases the chances that plants somewhere will be back up and running, as is the case with YKK’s China facilities.
Still, not all firms have the luxury of waiting or shifting resources, so JETRO’s Atlanta office is making every effort to help them navigate the new landscape.
“It is an uncertain and difficult time for all of us. However, be assured that we at JETRO will make our very best effort to support Japanese companies in the United States by providing factual information and business guidance in a timely manner,” said JETRO Atlanta Chief Executive Director Takuya Takahashi, in a letter to contacts.
To see JETRO’s special state-by-state coronavirus resource page in Japanese, click here.
To view the full survey results, click here.
To contact JETRO Atlanta, email ama@jetro.go.jp.
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