March 29, 2024

DealBook: Executive at Goldman Is Retiring

Revolving Door
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David A. Viniar, Goldman's chief financial officer, at a Senate panel in 2010.Charles Dharapak/Associated PressDavid A. Viniar, Goldman’s chief financial officer, at a Senate panel in 2010.

Goldman Sachs introduced on Tuesday what may be the first of the next generation of leaders to run the storied Wall Street firm, saying that its longtime chief financial officer, David A. Viniar, would retire at the end of January and be replaced by Harvey M. Schwartz, a 48-year-old executive.

The departure of Mr. Viniar, 57, holds greater significance for Goldman than would the departure of a chief financial officer from any other Wall Street bank. Both inside and outside of Goldman, many consider Mr. Viniar to be the bank’s most valuable executive, a financial wizard and deft risk manager with a mastery of Goldman’s complex balance sheet.

Though not as well known as Lloyd C. Blankfein, the bank’s chief executive, Mr. Viniar has played a central role in navigating Goldman through a tumultuous period. He has served as C.F.O. since 1999, the year of Goldman’s initial public offering, and helped manage the bank, largely with success, through the global financial crisis.

Mr. Viniar, who began his career at Goldman in 1980, had been telling colleagues for the last year that he was looking for an appropriate time to move on.

Harvey Schwartz, the new chief financial officer at Goldman Sachs.Goldman SachsHarvey Schwartz, the new chief financial officer at Goldman Sachs.

Analysts said the departure of Mr. Viniar, who was viewed by analysts and investors as a source of stability for Goldman, indicated that the bank’s leadership believed it had put one of the most challenging times in its history behind it. And it will likely spur further speculation about who will replace Mr. Blankfein, Goldman’s chief executive since 2006. Mr. Blankfein, who will turn 58 on Thursday, has said he has no plans to retire.

“Any significant positioning of the firm’s capital over the years has been done with David in the driver’s seat,” said Roger Freeman, an analyst with Barclays. “But the acute crisis-management period that Goldman recently went through has drawn to a close, so this is a good time for him to step aside.”

Mr. Schwartz will take over the C.F.O. post during a moment of relative calm for Goldman. Though the economic environment remains uncertain, the markets have steadied. The bank has digested many of the post-financial-crisis regulatory changes, and has put many of its regulatory woes behind it, including paying $550 million to settle accusations by securities regulators that it misled investors in its sale of mortgage securities. The Justice Department recently notified Goldman that it would not face criminal prosecution.

Mr. Viniar’s role has stretched beyond the traditional C.F.O. functions. All administrative units at the bank — operations, technology and finance — report to him. He will become a member of the bank’s board of directors upon his retirement.

He played an important role in drastically reducing the firm’s exposure to the housing market in the period leading up to the global financial crisis. Mr. Viniar also helped oversee the huge bet that Goldman placed against the mortgage-securities market, a wager that he would later refer to in an e-mail to Goldman’s president, Gary Cohn, as “the big short.”

That trade, which earned Goldman huge profits, became the focus of controversy. The bank said the negative bet was a merely a hedge against its exposure to the housing market. But lawmakers accused Goldman of deceiving clients by selling them mortgage-backed securities while simultaneously betting against the mortgage market. In 2010, Mr. Viniar and his colleagues were forced to testify before Congress about the firm’s conduct.

Mr. Schwartz, a New Jersey native, joined Goldman in 1997 after spending the early part of his Wall Street career at Citigroup. He earned his bachelor’s degree from Rutgers and an M.B.A. from Columbia University.

Affable and brawny, Mr. Schwartz has spent most of his Goldman career working with clients. At Goldman’s investment bank, he advised corporate clients on their financing needs, and then moved over to the securities unit, where he has helped oversee much of the firm’s trading operations, as well as its relationships with large mutual funds and hedge funds.

Several analysts questioned whether Mr. Schwartz had the financial chops for the job. In response, Mr. Viniar pointed out that he himself was not trained as an accountant and had instead relied heavily on his team of controllers and financial managers. And, he added, Mr. Schwartz had a great deal of experience with managing the firm’s risk, a crucial part of the job.

“I have sought Harvey’s advice on risk judgments and market knowledge for a long time, and I know he will be an outstanding chief financial officer,” Mr. Viniar said.

Tuesday’s announcement put an end to speculation over Mr. Viniar’s replacement. Goldman traditionally promotes its homegrown talent rather than hiring from outside the bank. Two of Mr. Viniar’s lieutenants — the treasurer, Elizabeth Beshel Robinson, and the chief accounting officer, Sarah Smith — were also seen as candidates for the post.

Mike Mayo, an analyst, noted on Tuesday that while Mr. Viniar was leaving Goldman in strong financial shape, the bank’s stock was still relatively low. During an analyst call, he asked if Mr. Viniar planned to sell any of his prodigious stock holdings — he owns about $225 million worth of Goldman shares, according to the bank’s last proxy statement — at these levels.

“I will continue to be a large stockholder for many years to come,” Mr. Viniar said. “As C.F.O., Harvey will be able to get the stock price higher than I have been able to.”

Article source: http://dealbook.nytimes.com/2012/09/18/goldmans-longtime-c-f-o-to-retire/?partner=rss&emc=rss

DealBook: Silver Lake and Partners Group to Buy Global Blue for $1.25 Billion

LONDON — The private equity firm Silver Lake and the investment management company Partners Group agreed on Thursday to buy Global Blue, a tax-free shopping business, for 1 billion euros.

The deal, valued at about $1.25 billion, is one of the largest private-equity-backed leveraged buyouts in Europe this year. Private equity firms have completed debt-funded European acquisitions worth a combined $15.3 billion in 2012, a 35.5 percent decline from the period a year earlier, according to the data provider Dealogic.

Silver Lake and Partners Group are buying Global Blue from the private equity firm Equistone, which paid 360 billion euros for the company in 2007. Equistone previously was called Barclays Private Equity until it was acquired by its management team in 2011.

The deal will give the new owners of Global Blue access to the increasingly important luxury traveler market, as wealthy individuals from emerging markets and developed countries continue to spend despite the global financial crisis.

Global Blue, based in Nyon, Switzerland, has operations in more than 41 countries and works with about 270,000 retailers, according to the company’s Web site. Its businesses include tax-free shopping as well as financial transactions and foreign exchange services.

“Silver Lake and Partners Group’s impressive Asian footprints will also bolster Global Blue’s expansion initiatives in that important region,” Silver Lake’s managing director, Christian Lucas, said in a statement.

Article source: http://dealbook.nytimes.com/2012/05/24/silver-lake-and-partners-group-to-buy-global-blue-for-1-25-billion/?partner=rss&emc=rss

Italian Bond Sale Gets Tepid Response as Debt Crisis Festers

Amid a growing sense that Europe’s response to the debt crisis lacks coordination and conviction, the United States Treasury Secretary Timothy Geithner will make a rare if not unprecedented appearance at a meeting of European finance ministers, to be held Friday in Wroclaw, Poland. The trip will be his second across the Atlantic in a week, following the Group of 7 session in France last weekend.

“Clearly the U.S. Treasury is disappointed with the direction of the European debt crisis and is looking for action, before further sections of the banking system are drawn in and a global financial crisis is re-visited,” Chris Turner and Tom Levinson, strategists at ING, said in a research note.

President Barack Obama, in a meeting with Spanish-speaking journalists in Washington, reportedly called on euro-zone leaders to show markets that they are taking responsibility for its debt crisis.

“In the end the big countries in Europe, the leaders in Europe must meet and take a decision on how to coordinate monetary integration with more effective co-ordinated fiscal policy,” EFE, a Spanish news agency, quoted Mr. Obama as saying.

The German chancellor Angela Merkel, meanwhile, sought to dampen fears surrounding Greece — where the debt crisis began and which is having trouble meeting the conditions for its second bailout.

“The top priority is to avoid an uncontrolled insolvency, because that wouldn’t just hit Greece and the danger that it hits everyone, or at least a number of other countries, is very big,” Mrs. Merkel said in a radio interview, according to Bloomberg News. “I have made my position very clear: that everything must be done to keep the euro area together politically, because we would very quickly face a domino effect.”

While the immediate problems revolve around Greece, much-bigger countries like Italy, which is equally overstretched, have been losing market confidence as well, creating even greater worries.

On Tuesday, the Italian Treasury sold €3.9 billion, or $5.3 billion, of a new 5-year bond at an average yield of 5.6 percent. That compared to a rate of 4.93 percent the last time securities of a similar maturity were sold on July 14. Demand at the auction was 1.28 times the amount on offer, compared with 1.93 times at the last sale.

Analysts said demand was disappointing and that the European Central Bank had been seen by traders to be buying Italian bonds around the auction as part of their program of asset purchases to stable volatile markets.

The yield on 10-year Italian bonds was around 5.7 percent on Tuesday, again approaching the 6 percent level that is considered to be unsustainable — and that prompted the E.C.B. to intervene and start buying Italian and Spanish debt on Aug. 8. Spanish bonds were trading at around 5.3 percent.

Greece’s 10-year bond yields rose 48 basis points to 24.03 percent, after earlier climbing to a euro-era record of 25 percent as concerns about a near-term Greek default increased

European stocks declined, but were off their early lows, as French banks were again punished by investors amid concerns about their exposure to high-yield European debt and ability to finance themselves in dollars. U.S. futures dropped, while Asian shares were little changed.

At midday, the Euro Stoxx 50 slid 1.4 percent and the CAC-40 shed 2 percent in Paris.

Reports of a meeting last week in Rome between Finance Minister Giulio Tremonti and the chairman of China Investment Corp., Lou Jiwei, were confirmed by Mr. Tremonti’s office on Tuesday, news agencies reported.

Citing unnamed Italian officials, media reports have suggested that the Italian government was preparing additional measures to cut debt and that the country was discussing sales of its debt to cash-rich China.

Those reports were greeted with skepticism by analysts, who have seen Italy announce new measures — and then apparently backslide on them — over the summer. China’s purchase of bonds during the crisis from other euro-area countries like Spain and Portugal also had limited effects.

“Purchases of Italian bonds or other Italian assets by China’s sovereign wealth fund would buy Italy some time, but that is all,” Robert O’Daly, economist at The Economist Intelligence Unit, said. “As seen with the E.C.B.’s purchases of €40 billion to €45 billion worth of Italian government bonds in August the effect was temporary.”

He said that to restore confidence the Italian government would “have to put aside its internal wrangling to implement the program of fiscal austerity presented to Parliament on September 1st and at the same time come up with a coherent medium-term strategy to improve the country’s dismal economic growth performance.”

But he added that “does not seem likely to happen” given the differences within the ruling coalition.

Article source: http://feeds.nytimes.com/click.phdo?i=320f941de9b29b256dfc8e89dc53497a

As Market Tension Builds, World Leaders Ponder Response

As the shock of Friday’s downgrade of United States debt reverberated dangerously with anxiety about European liabilities, central bankers and national leaders were under pressure to try to do something to restore confidence before Asian markets opened, and to prevent an extension of the rout that began last week.

As Group of 20 leaders conferred by phone, the governing council of the European Central Bank was holding an emergency conference call late Sunday. The central bank was likely to discuss whether to buy Spanish and Italian bonds to prevent borrowing costs for those countries from becoming unsustainable. But with signs of slowing growth in the United States and Europe, and government budgets and central bank balance sheets stretched to the limit, the policy options were dwindling.

Some analysts said that the European Central Bank would itself need help from other central banks and nations because of the scale of the problem.

“They just can’t allow the Italian economy to go down the tubes. It would be a Lehman-type situation,” Uri Dadush, a senior associate at the Carnegie Endowment for International Peace, said on Sunday. He was referring to the collapse of the investment bank Lehman Brothers in 2008, which touched off the global financial crisis.

Mr. Dadush put the cost of a bailout of Italy at $1.4 trillion, with Spain requiring another $700 billion. Those amounts would be a challenge for even the most solvent European countries, foremost among them Germany.

Finance ministers of the Group of 7 and Group of 20 nations were conferring on Sunday, Reuters reported, but it was not clear whether there was enough support for a substantial coordinated intervention in the markets — or even whether that would be a good idea.

“I don’t know if there is a policy response that makes sense, except support the banks,” Carl B. Weinberg, chief economist of High Frequency Economics in Valhalla, N.Y., said on Sunday. He said the European Central Bank, which has already expanded its cheap loans to banks, should make even greater sums available so that institutions could survive a decline in the value of their holdings of Spanish and Italian debt.

In a sign of the acute tension after Standard Poor’s lowered the rating for long-term United States debt to AA+ from AAA, stock markets in the Middle East fell in Sunday trading, and the Tel Aviv exchange delayed opening for the first time since the collapse of Lehman Brothers in 2008.

Market circuit breakers kicked in after opening prices were down more than 5 percent. The Israeli benchmark stock index closed down 7 percent.

The European Central Bank on Thursday intervened in European bond markets for the first time since March. But it appeared that the bank was buying only relatively small amounts of Portuguese and Irish bonds. The central bank may have intended a warning shot to signal its resolve, but markets seemed to have interpreted the modest intervention as a sign of weakness.

The move also reopened divisions on the bank’s governing council, with Jens Weidmann, president of the German Bundesbank, and several other members opposing the bond purchases.

“This type of bond market intervention is unlikely to achieve much,” Antonio Garcia Pascual, an analyst at Barclays Capital, said in a note. Even if the central bank starts buying Italian and Spanish bonds, “this begs the question of how far the E.C.B. is ready to go down that route — a proposition that markets may be testing in the weeks ahead.”

Mr. Weinberg said that even the European Central Bank would be hard-pressed to buy enough bonds to hold down yields on Spanish and Italian debt in the long term and to prevent the countries’ borrowing costs from reaching levels that would eventually prove ruinous.

Judy Dempsey contributed reporting from Berlin, and Liz Alderman from Paris.

Article source: http://www.nytimes.com/2011/08/08/business/global/as-market-tension-builds-world-leaders-ponder-response.html?partner=rss&emc=rss

Greek Rescue Plan May Allow for Default on Some Debt

Details of the agreement, reached early Thursday in Berlin after seven hours of talks, were not disclosed. The talks had centered on the role private investors and banks would have to play in stabilizing Greece’s finances and reducing a debt burden that threatens to stifle any prospect of economic recovery.

A statement from the French president, Nicolas Sarkozy, and the German Chancellor, Angela Merkel, said they had “listened” to the views of the president of the European Central Bank, Jean-Claude Trichet, who flew in from Frankfurt unexpectedly to join the meeting.

Though it did not say if they had settled the issue of whether Greece should be allowed to write down some of its debt — something Mr. Trichet has argued publicly and adamantly against — suggestions ahead of the summit meeting in Brussels were that the E.C.B had softened its stance.

“The demand to prevent a selective default has been removed,” the Dutch Finance Minister Jan Kees de Jager told the Dutch parliament in The Hague, Reuters reported.

Were Mr. Trichet to accept a temporary default, the euro-zone leaders may have to consider new ways to ensure that Greek banks could access funding that they currently receive from the E.C.B, possibly by guaranteeing Greek bonds themselves for a short period.

The euro and European stocks rallied on news of a potential deal, while the risk premium investors demand to hold the weaker euro zone bonds rather than benchmark German ones fell.

The French-German agreement was being presented to the other leaders of the 17 member euro zone in Brussels. The summit meeting was called after days market turbulence in which borrowing costs spiked in Italy and Spain, raising fears the euro debt crisis would spread to those, much bigger countries, potentially setting off another global financial crisis.

Representatives of big European banks were said to be in Brussels in parallel meetings, said one official not authorized to speak publicly.

Germany, Finland and the Netherlands have been at odds with the E.C.B. and some governments over their insistence that private bondholders share the pain. Besides concerns over contagion, the central bank has said that a selective default would make it impossible to accept Greek bonds as collateral.

“Selective default” is a term used by credit rating agencies when the terms of a bond, such as the repayment deadline or interest rate, have been altered. It falls short of an outright default rating, which is usually triggered when the borrower stops making payments.

Many saw the summit meeting as a moment of truth, particularly for Mrs. Merkel, whose caution has been blamed by some for the region’s failure to stem the crisis.

The central elements of the package are expected to be a buyback of Greek bonds, probably financed via the euro zone bailout fund known as the European Financial Stability Facility, the official said. That would reduce the stock of Greek debt by around 20 percentage points of gross domestic product.

The official said the final statement from the summit meeting would remain relatively vague on the exact extent that banks will “voluntarily” participate in the bailout, for fear that too much commitment now on might spook credit rating agencies, according to another euro area official involved in the talks, who also was not authorized to speak publicly. Details of the private sector involvement will be communicated at a later date, he said.

European leaders are not expected to increase the size of the E.F.S.F., although such a step is not being ruled out for the future, the second official said.

But the final statement is likely to include details of a plan to assist Greece as well through the transfer of more European Union funds earmarked for development, based around infrastructure spending, the official added.

Another element being considered was a plan that would have private creditors swap Greek bonds that mature in the next few years for longer-term ones, but it was less clear if that would be adopted.

Officials suggested that an earlier proposal for a tax on banks had been dropped. This was once seen as a tool for raising private sector financing without provoking a default but posed technical problems since the tax would have to be levied by each national government and would exclude countries that did not use the euro even if they had Greek liabilities.

Asked about the bank tax idea Jean-Claude Juncker, the prime minister of Luxembourg and head of the Eurogroup of finance ministers, said: “I don’t think that there will be an agreement on that.”

In all the Commission wants the euro area and the International Monetary Fund to contribute 71 billion euros, or $100 billion, to the rescue plan, up to 2014.

One element attracting consensus is the need to reduce the burden on indebted nations, not only by buying back Greek bonds but also through a reduction in the interest rates offered to Greece, Ireland and Portugal, which have also accepted international help. The maturities of these loans would also be extended.

As part of the Greek package, Ireland and Portugal — the other two euro countries that have received international bailouts — will receive new, similarly favorable financing conditions on their official loans, the second official said, meaning that they would have to pay the E.F.S.F.’s borrowing rate plus some costs, which are all expected to come in around 3.5 percent.

Ireland will not be required to raise its relatively low corporate tax rate, currently 12.5 percent, as some countries, such as France, had sought, the official said.

“They will have a lower interest rate and extended maturities without giving up anything,” the official said.

Matthew Saltmarsh in London contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=2e05e9c1b0665d6bc3e8552ec4966053

Inside Asia: Miners Keep Their Bets on China

SINGAPORE — Nouriel Roubini, the professor of economics at New York University who warned about the risks of a financial crisis, is cautious about China, but resource companies are betting billions that rapid urbanization and economic growth will soak up the country’s spending on infrastructure projects and prevent a hard economic downturn.

They are buying up competitors, investing in new capacity and speeding the pace of expansion projects to feed the strong growth in China’s demand for raw materials.

In the past week, Noble Group, Nyrstar, Rio Tinto and Xstrata have announced plans to expand output or capacity — risky bets if Mr. Roubini’s vision for China proves accurate.

“There is a meaningful probability of a hard landing in China after 2013,” Mr. Roubini told a financial conference in Singapore. He is closely followed on Wall Street because he predicted the U.S. housing meltdown that precipitated the global economic crisis.

But his warnings are at odds with the actions of raw material producers.

Australian mining investment grew to $50 billion in 2010 from $20 billion in 2009, “and that suggests the miners don’t think Roubini’s scenario will play out,” said Ben Westmore, a commodities economist at National Australia Bank. “Those plans are likely predicated on some slowing in prices, but there is still obviously a lot of money to be made.”

The strong demand in China has helped bolster a commodities boom in the past seven years, with copper prices rising to records above $10,000 a ton, only briefly interrupted by the global financial crisis, from about $2,500 a ton.

Iron ore prices have leapt to almost $200 a ton from $32 in 2004.

Rio Tinto, one of the world’s largest iron ore miners, is speeding up plans to expand iron ore production 50 percent to 333 million tons a year by the first half of 2015, six months ahead of its earlier target. “The demand outlook continues to be strong, with supply lagging elsewhere in the industry, and we are seeing new supplies proving slower to materialize than predicted,” said Sam Walsh, the head of Rio Tinto’s iron ore division.

Xstrata plans to start exporting more iron ore to Asian buyers from Australia on Wednesday as part of a redesign of its Ernest Henry copper and gold mine in the northeastern part of the country, the company said. The upgrade cost 589 million Australian dollars, or $620 million.

Exports of the magnetite-type material at a rate of 1.2 million tons a year are a major component of Xstrata’s plan to transform the Ernest Henry mine from an open-cut design to an underground one, the company said.

Other companies are also seeking to expand capacity through mergers, including Nyrstar, the world’s biggest zinc producer, which wants to acquire Breakwater Resources of Toronto for 619 million Canadian dollars, or $630 million, as it carries out its strategy to buy more mines and increase self-sufficiency.

Mr. Roubini said investment was already at 50 percent of China’s gross domestic product and that sixty years of data had shown that overinvestment led to hard landings, citing the Soviet Union in the 1960s and ’70s, and East Asia before the 1997 financial crisis.

“I was recently in Shanghai and I took their high-speed train to Hangzhou,” he said, referring to a line that has cut traveling time between the two cities to less than an hour from four hours previously.

“The brand new high-speed train is half-empty and the brand new station is three-quarters empty. Parallel to that train line, there is a also a new highway that looked three-quarters empty. Next to the train station is also the new local airport of Shanghai and you can fly to Hangzhou.”

But other analysts have argued that China’s immense urbanization program meant that although some infrastructure projects might be underutilized at present, the projects would gain users in the years to come.

“You don’t build infrastructure expecting to run at capacity on Day 1,” said an analyst in Shanghai, who was not authorized to speak to the news media. “You build based on future demand.

“The other question you need to ask is what is a hard landing for an economy growing at 10 percent? Is it a slowdown to 5 percent? Even that implies, assuming demand for commodities rises in line with G.D.P., an additional 400,000 ton of copper or more than 30 million ton of iron ore. China is about ‘boomsday.’ The risk of ‘gloomsday,’ let alone doomsday, is slim.”

About half of the people in China live in cities and towns, according to a census in April, up from 36.1 percent in 2000, although the previous census used a different counting method. If that trend continues, over the next 10 years about 200 million Chinese from rural areas will need new housing, workplaces and household goods in urban areas.

“The massive amounts of infrastructure just to keep up with population growth even as it slows will mean any dip will be well supported,” said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.

Nick Trevethan is a Reuters correspondent.

Article source: http://feeds.nytimes.com/click.phdo?i=49fb08cd40ef75d6683edb0222dccb90

Quake Takes Toll on Japan Exports in March

The devastating earthquake and tsunami and the power shortages that followed struck Japan just as the economy, the largest after those of the United States and China, had begun to regain some momentum after the deep slump that followed the global financial crisis in 2008.

With the global recovery now on relatively solid ground, analysts and officials are optimistic that the Japanese economy will start to rebound by the second half of the year, if not sooner, as reconstruction spending kicks in and manufacturing and electricity supplies return to normal.

In the short term, however, the pain and uncertainty remain intense, and the trade statistics for March, released by the Japanese Finance Ministry on Wednesday, provided some of most concrete evidence available so far about the economic toll of the disaster.

Exports, which had seen more than a year of solid growth before the quake struck, fell 2.2 percent from the level of a year earlier, to ¥5.9 trillion, or $71 billion. The decline was more pronounced than some analysts had expected and represented a sharp turnaround from the robust rise of 9 percent recorded in February.

“It will take time for exports to recover to pre-earthquake levels, given that supply-chain disruptions and electricity shortages are hampering efforts to restore production,” Hiromichi Shirakawa, an economist at Credit Suisse in Tokyo, wrote in a research note Wednesday.

Mr. Shirakawa noted that the decline in exports in March had not been as bad as he had initially expected, in part because companies probably had exported goods in March that were in stock and had been produced before the disaster. “A sharp decline in production after the earthquake may have a larger impact on exports in April and May,” he added.

Imports rose 11.9 percent, to ¥5.7 trillion, making for a trade surplus of ¥196.5 billion, a drop of 78.9 percent.

The data Wednesday highlighted that the pain was especially acute in the automobile and electronics sectors.

Shipments of motor vehicles, which account for about 10 percent of total Japanese exports, slumped 22.1 percent from March 2010, as car manufacturers like Toyota and Honda had to cut production and idle plants in the weeks after the quake struck.

Many of these plants have restarted production again in the past week or two, but in many cases, operations remain below levels reached before the earthquake and dependent on whether, and how rapidly, the flow of components and spare parts returns to normal in the coming weeks and months.

Toyota, one of the companies hardest hit by the disruption, has resumed production at its plants in Japan, which build nearly half the vehicles the company sells worldwide. However, the factories are running at only 50 percent capacity, and Toyota operations in other parts of the world have also been scaled down significantly as inventories of parts and components dwindle.

On Wednesday, Toyota said production in China would be reduced to between 30 percent and 50 percent of normal until June 3.

On Tuesday, the company had said it would cut production at its plants in North America by 75 percent in the next six weeks to conserve its supply of parts. The plants involved build about 70 percent of the vehicles Toyota sells in North America. As a result, significantly fewer cars — including the Camry and Corolla sedans and the RAV4 crossover — will be available this spring, a prime selling season for the industry.

“This really just reinforces that consumers and dealers haven’t seen the full effects yet of the crisis in terms of inventory and vehicle availability,” said Rebecca Lindland, an analyst at the research firm IHS Automotive. “The impact will be felt for months to come since production is slowed into June. And there’s a good chance the production won’t suddenly bounce back to 100 percent on June 3.”

Honda, Nissan and Subaru have also trimmed their output in North America as they work to obtain adequate inventories of Japanese-made parts.

Toyota is more affected than other automakers because it builds a larger percentage of its vehicles in Japan. Its popular hybrid car, the Prius, and all but one model for its Lexus luxury brand are exported from Japan.

Economists stress, however, that the problems felt by the car sector do not extend to the Japanese economy as a whole. Activity in many other sectors was less directly affected by the March 11 events and have already returned to normal, said Takuji Okubo, chief Japan economist at Société Générale in Tokyo.

In addition, fears that power constraints may intensify once electricity demand picks up over the summer may be overstated, he said.

“Japanese manufacturers can probably manage the impact by shifting some activity to nighttime and weekends,” he said. “Consumption and manufacturing will probably decline, yes, but the effect is probably in the magnitude of 2 to 3 percent, rather than 5 to 6 percent.”

Nick Bunkley contributed reporting from Detroit.

Article source: http://feeds.nytimes.com/click.phdo?i=313c6a35794272da5b9c14718c2f367b