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Midwest Firms Brace for Japan's Economic Ripples

When you think of economic ties between the Midwest and Japan, automotive companies such as Toyota or Honda might come to mind. But the billions of business dollars that flow between Midwestern states and the Asian nation include industries such as pharmaceuticals, non-auto manufacturing, banking, and countless small to midsize firms.

More than a week after Japan's devastating natural disaster, many of those Midwestern companies say they're still trying to figure out how their bottom line will be affected.

Among them is ITA, one of several firms near Chicago that deal every day with Japan. The company provides IT, business and other solutions to American divisions of Japanese firms like Panasonic and Mitsubishi.

Since the earthquake, ITA President Shin Kishioka says his workers have been handling some unusual requests, "especially disaster-related items such as gas tanks" and portable toilets.

Japanese are also asking for help with large items such as excavating equipment.

ITA has only 18 employees, but more than 160,000 people across the Great Lakes states are directly working for Japanese businesses. Only about half of them work directly in manufacturing. The rest are companies like Kishioka's, doing work such as information technology, finance or legal services.

There are also many large American corporations employing workers in Japan, including Peoria, Ill.-based Caterpillar Inc., which earns about a quarter of its revenue from its Asia-Pacific division.

The company has 5,000 employees at two big manufacturing facilities in southern Japan, plus an office in Tokyo that serves as Caterpillar country headquarters.

Caterpillar spokesman Jim Dugan says initial reports indicate that the company's Japanese workers and facilities are OK. The company is now focused on aiding the relief effort.

"Caterpillar corporately, as well as our dealers, will provide a range of assistance in the form of equipment, sometimes expert operators," Dugan says. "That equipment and those operators [are] often used in the rescue and recovery efforts and after a disaster."

Michael Moskow, a senior fellow at the Chicago Council for Global Affairs and chairman of the Japan America Society of Chicago, says that in natural disasters like this, "they tend to not change the longer-term trend of economic development, whether it would be in Japan or in the Midwestern part of the United States."

Moskow says it's hard to predict how long the Japanese business sector will take to recover. As it does, he sees business opportunities in construction and other rebuilding efforts.

ITA's Kishioka was in Japan during the Kobe earthquake in 1995. He says he's hoping Japan's government will be able to help hard-hit areas much like it did then.

"With the government support, maybe like we had experienced in Kobe," Kishioka says, "there could be quick recovery as constructions move on faster and things turn out better."

A quick recovery would be good news for hundreds of companies across the Midwest doing billions of dollars in business each year with Japan.

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