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Japanese Companies Respond to the Threat of Swine Flu

April 27, 2009

Japanese companies with operations in Mexico are in a quandary about how to respond to the outbreak of Swine Flu. Through intelligence gathering and working together with government authorities, companies are deciding whether to send their workers home or to the U.S., or just to increase security measures at their Mexican offices and plants. The Japanese newspapers this morning each told a different account of how businesses are dealing with the threat of the Swine Flu.

NikkeiElectronics Companies Prohibit Travel.” The Nikkei points out that both Sony and NEC have called for restrictions on business trips to Mexico. While Sony has just called for restrictions on Mexico City, NEC has called for restrictions on travel throughout the country. Not only has NEC prohibited trips into the region, but they’re also looking at sending people who reside in Mexico home.

To outline the situation that these companies face, the Nikkei describes “Sony has a sales office in Mexico City. Also in the Northwest region it has three factories that make liquid televisions and audio / media equipment, at which about 7,000 Japanese reside in Mexico.”

Yomiuri “Financial Companies React by Emergency Evacuation.” The Yomiuri accounts how Mitsui Sumitomo Insurance had to emergency evacuate one person back to Japan. Another person who was working in Mexico had to either leave or be evacuated to the U.S. Although people are being evacuated to the U.S., the Yomiuri adds that 60 relatives of people working in Mexico who live in the U.S. have been given the option to receive paid travel to fly home.

AsahiStock Prices Increase while Business Trips Decrease.” The headline from the Asahi Newspaper states “business trips are prohibited”, while at the same time, “rising stock prices are also being put on hold.” Although these two factors sound like they contradict each other, when analyzing the behavior of stock prices it shows how Japanese consumers react to news of a possible flu outbreak. The companies that sell masks have had their stocks increase by 30%, causing the Japanese authorities to put a stop on the stock prices. While at the same time, due to companies such as Panasonic prohibiting business trips to the region, travel companies’ stocks have seen major dips from 5-10%.

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