Businesses wrestle with evacuation decisions

Image: Passengers queue at Narita airport
Decisions on whether to leave the country were complicated by the crush at airports, such as this scene at Narita airport, east of Tokyo on Thursday.Isssei Kato / Reuters

As workers scrambled to stabilize Japan’s crippled Fukushima Dai-ichi nuclear power plant Friday, companies struggled to cope with power and fuel shortages, tough choices about whether to evacuate operations to safer locations and anxiety among their workers.

“The majority of the people that we speak to in Japan are just scared,” said Ames Gross, president of Pacific Bridge, an executive search and human resources consulting company focused in Asia.

Those fears were heightened by conflicting reports about the dangers posed by radiation leaks from quake-damaged reactors in the eastern prefecture of Miyagi. The U.S. began evacuating family members and dependents of government officials within a 50-mile radius of the plant, a larger zone that Japanese officials have created.

“Beyond this 50-mile radius, risks do not call for evacuation,” President Barack Obama said Thursday. "But we do have a responsibility to take prudent and precautionary measures to educate those Americans who may be endangered by exposure to radiation if the situation d eteriorates."

Other countries — including Australia, Britain and Germany — have also evacuated government workers and some international companies have moved their employees further away from the plant out of the country.

More than 3,000 Chinese were evacuated from Japan's northeast to Niigata, on Japan's western coast, according to Xinhua News Agency.

Beyond the 50-mile radius, the decision to evacuate was clouded by the difficulty getting accurate information about the risks posed by the plant, said Nick Allan, Asia Pacific director at Control Risks, a global risk consultant.

“There is a lot of sensational information out there and sensational projections,” Allan said. “But really knowing what the risks are, I think, is the challenge a lot of companies face.”

International companies considering a full-scale evacuation were also wrestling with the thorny issue of whether to offer the same option for their Japanese employees, said Allan.

“Do you evacuate everyone? Because that means you should include your Japanese employees possibly if there is that risk,” he said. “And a lot of Japanese have extended families. So there are real consequences of taking those decisions that companies have to work through.”

German technology companies SAP and Infineon were among those moving staff to safety in the south of the country, along with automakers BMW and Volkswagen.

Cisco Systems, headquartered in San Jose, Calif., temporary closed its offices in Shinjuku, Tokyo and Sendai. Its employees are able to work remotely, many of them from home. IBM, based in Armonk, N.Y., said its operations were not disrupted and had no reports of serious injury to its employees in Japan.

Chicago-based Boeing, with more than 200 employees in Japan, temporarily deferred business travel to the area but had no plans to evacuate its staff.

Swedish furniture giant Ikea offered to help Japanese employees leave Tokyo and surrounding areas and relocate further south, according to Australia’s Herald Sun newspaper. Ikea employs around 2,000 people in Japan, and a company official said it had offered to help some 1,200 employees and their families move to the Kansai region south of Tokyo.

Some 650,000 foreign workers were employed by more than 100,000 businesses in Japan, as of Oct. 31, according to the nation's Health, Labor and Welfare Ministry. About 40 percent , or 260,000, are factory workers. Chinese workers account for 290,000; 120,000 are Brazilians and 62,000 are Filipinos.

In Tokyo, about 1 40 miles south of the stricken nuclear complex, Japanese officials said radiation levels were slightly elevated — but not high enough to pose a threat to the 39 million people in and around the capital. Those assurance weren’t enough to keep companies from relocating employees further from the plant.

Those who remained in the capital reported that the city had all but shut down.

“People aren’t going to work, there are very few people on the streets and most companies have closed their offices this week,” said Gross. “People are working from home for the most part. But if you are making a widget, you can’t make it from home.”

Manufacturers in the northeast were hit hardest by the 9.0 quake and resulting 30-foot tsunami. The extent of the damage and cost of rebuilding is still being assessed. For those plants spared serious damage, full production is not expected to be restored for weeks or months

“The biggest impact we see is just due to the power outages, which is impacting production of all sorts of things,” said Craig Berger, of FBR Capital Markets. "These rolling power outages are making it difficult to get back to typical production.”

The Fukushima Dai-ichi nuclear plant produced about a fifth of Japan’s nuclear power, a major source of electricity for the island nation. Making up for that shortfall with spare generating capacity has been complicated by a national power grid that is split in two and operates on different standards in the north and south

“The spare capacity of the grid in Japan is not that high," said Cornelia Meyer, an energy consultant and CEO of MRL Corp. "So when you take a plant offline the adjustment of the grid is not an easy thing."

While many businesses reported normal package deliveries, some local shipping was hampered by gasoline and diesel shortages, the result of several bottlenecks in the fuel pipeline. Though crude oil supplies are adequate, six refineries were shut down by the quake, knocking out roughly 30 percent of domestic gasoline and diesel production.

Fuel supplies have been further crimped by damaged highways and pipelines that have blocked distribution to gas stations and businesses. Widespread hoarding has added to scarcity; the government urged consumers to “stop panic buying” to free up desperately needed fuel for relief efforts.

Food shortages were also cropping up based on fears of contamination of produce grown near the Fukushima Dai-ichi plan.

“It’s a big agricultural area, said Meyer “That’s where I see the big impact — because a lot of rice and vegetables that Japan produces internally — they will now need to import adding fuel to food price inflation.”