South Burlington, Vermont - March 24, 2011
It's being called a triple disaster; an earthquake, a tsunami and a nuclear crisis disrupting the country's power supply. As Japan begins its recovery, experts assess the economic impact.
"The earthquake and the tsunami did not hit their major center of manufacturing," said Allison Kingsley, a professor of strategy and management at the University of Vermont.
But the earthquake did devastate Fukushima's nuclear power plant, a facility with the same design as Vermont Yankee. Kingsley says while the overall commodities impact will be minimal in Vermont, this will influence the state's energy discussions, and predicts that the U.S. will rely more on natural gas as folks shy away from nuclear energy.
"There will be more demand for natural gas," Kingsley said. "So I think we can anticipate the prices for most Vermonters in terms of natural gas will be increasing over the next 2-4 years."
Japan is nearly 10,000 miles from Vermont, which may seem a world away. But experts say the longer the blackouts last in Northern Japan; the greater the impact will be here.
"Without power it's hard to shift production. Without power it's hard to shift labor and capital. Without power it's very hard to improve your infrastructure in the short term," Kingsley explained. "I think there will be a short-term disruption in terms of what Vermonters might be able to access and I think that is going to hit in mid-April."
And that includes electronics. Best Buy wouldn't comment on specific brand shortages, but did say that it remains in close contact with its Japanese partners and will continue to assess the potential impact on its business. In a statement, Sony said eight of its plants have shut down, but no word yet on whether prices will rise.
Another industry feeling the short-term pinch-- automakers. Across the board, every major car manufacturer has been impacted by plant shutdowns in Japan.
"So much of things like semiconductor chips and microprocessing chips come from Japan that it's almost impossible to not be impacted in some way," said Rebecca Lindland, a senior analyst for IHS Automotive.
Auto experts say Toyota has been hit the hardest, but local dealerships are coping.
"For us there might be a slight interruption in inventory but really not a devastating effect," said Ryan Denecker of Heritage Toyota in South Burlington.
That's because most of Toyota's cars on the lot at Heritage have a mix of American and Japanese parts, with a few exceptions. Priuses are 100 percent Japanese. They won't go back into production until the March 28.
"Certainly with supply and demand there is going to be a slight increase in the price," Denecker said.
But that's expected to be mild and inventory will be back to normal by April.
Jennifer Reading - WCAX News
